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Enhancing your portfolio with GTAA


GTAA is an ideal additional source of return.
For example a 6.67% allocation to a GTAA strategy with a performance objective of LIBOR +15% (net of fees), would deliver a potential additional return of 1% above LIBOR across the entire portfolio (+15% net target x 6.7% allocation = +1% upswing)*.

 

The chart opposite captures the risk-return profile of a representative portfolio before and after GTAA is added to its asset allocation. A portfolio without GTAA is represented by the blue circle.


GTAA used to increase portfolio return

The yellow circle demonstrates that adding GTAA can increase the portfolio’s return without increasing the volatility. This is due to GTAA’s potential to deliver high returns that are lowly correlated to conventional portfolios.


GTAA used to reduce portfolio risk

Alternatively, if an investor seeks to reduce risk without compromising return, GTAA’s low correlation to other asset classes in the portfolio means it is possible to reduce overall volatility by adding GTAA.

  

* Aviva Investors Strategy Team.