Asset classes

Our Process

We believe the combined expertise of dedicated asset-allocation and single-asset-class specialists delivers the greatest risk-adjusted returns. With this combination, we believe we are able to best construct diversified portfolios capable of delivering strong, sustainable risk-adjusted performance.

Stage 1) Peer-group asset allocation

The multi-asset fund (MAF) fund manager uses the mean allocation to each asset class within the relevant peer group or a fixed asset weight (for each fund) as the benchmark.

Stage 2) MAF risk allocation

Our MAF fund manager's expertise lies in deciding what proportion of the total risk should be allocated to each risk source in order to maximise returns.

Stage 3a) Dynamic strategic asset allocation

The MAF fund manager works closely with the specialist Strategic Asset Allocation (SAA) research team. The aim is to ensure the SAA or long-term asset mix reflects the evolving long-term performance expectations for investable asset classes.

Stage 3b) Tactical asset allocation

We implement Tactical Asset Allocation (TAA) across the fund to benefit from short-term market anomalies. TAA is an investment strategy designed to exploit short-term opportunities in asset classes whatever the market environment. Positions are usually held for less than a year, hence the word ‘tactical’.

Stage 3c) Active/passive single asset class management

For each actively managed asset class the MAF team specifies an outperformance target and an acceptable level of risk versus conventional single asset class benchmarks.

Stage 4) Implementation and review

We implement and review each find on a regular basis to ensure the risks taken in the funds are commensurate with the returns they achieve.