Portfolio Governance

To construct and run a range of sophisticated and heavily diversified Core Portfolios we work closely with an independent research and analytical firm following a rigorous and robust investment process that incorporates three key elements:

Asset Allocation

Stochastic investment modelling is used to determine the optimum blend of asset classes for each portfolio risk profile. This analyses how different asset classes are expected to behave over the long term with regard to return, volatility and covariance in order to determine the optimum investment mix for each portfolio. Portfolio allocations are further adjusted to take into account qualitative forward looking factors, ensuring that the Core Portfolios are positioned to maximise opportunities given the prevailing investment climate, economic cycle and after consideration of the key economic drivers of asset class performance.

Investment Selection

The fund selection process incorporates both quantitative and qualitative analysis and is designed to identify investments that exhibit the greatest consistency of risk adjusted returns, highlighting funds that achieve consistent and repeatable outperformance. Once the optimum blend of investment funds to match portfolio asset allocation has been determined, portfolios are further optimised using efficient frontier analysis to ensure optimal risk reward profile for each portfolio. The portfolios utilise a range of investment instruments to ensure asset class diversification as well as diversification of investment styles, geographic regions and industrial sectors. The Core Portfolios feature a blend of best of breed active fund managers and passive investment vehicles, exposure to uncorrelated asset classes and utilise a range selected alternative strategies designed deliver absolute returns over different market conditions.

Regular Structured Reviews

Funds and portfolios are actively reviewed by our in-house Investment Committee on an ongoing quarterly basis to ensure that they continue to meet their objectives and match the risk profiles of our clients. The following range of metrics are studied, measured and debated at these structured review meetings:

1)      Performance versus benchmark, sector and peer group.

2)      Risk Profile descriptions.

3)      Portfolio Objective descriptions.

4)      Volatility Targets and Ranges.

5)      Capacity for Loss / Portfolio Maximum Drawdown and Maximum Loss.

6)      Stochastic Forecasts.

7)      Asset Allocation Parameters.

8)      Market specifics & conditions.

 

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