The alpha-generating risk available to multi-asset fund managers is plentiful and includes strategic asset allocation (SAA), tactical asset allocation (TAA) and security selection.
If allocated and utilised correctly, these sources of alpha-generating risk can consistently produce performance above a peer group’s average return. We use highly sophisticated risk tools to monitor and examine the level of absolute and relative risks our funds take to generate returns.
In addition, our funds are monitored by an independent risk management team. The Aviva Investors Portfolio Risk team aims to maintain a solid governance process ensuring that a level of risk appropriate to return targets and market environment is maintained in all investment portfolios.
The Portfolio Risk team adopts a best-of-breed approach and uses a variety of risk models including APT, Barra, Style Research and proprietary models. Our multi-asset fund managers review the risk team’s analysis, which highlights risk issues on a regular basis. The team has continual engagement with the fund managers, both via ad-hoc informal meetings as well as monthly formal governance meetings.