Investment Management
Our approach to investment management follows a disciplined top-down process which is designed to maximise potential returns proportionate to the level of risk you are willing and able to accept.
A top-down process of management sees fund selection as a means of replicating carefully considered asset allocation decisions rather than as an isolated act of investment. It is this top-down process – beginning with asset allocation and ending with fund selection (see figure 1) – that we believe allows us to manage risk as effectively as possible.
A top-down process of management sees fund selection as a means of replicating carefully considered asset allocation decisions rather than as an isolated act of investment. It is this top-down process – beginning with asset allocation and ending with fund selection (see figure 1) – that we believe allows us to manage risk as effectively as possible.
Figure 1 - The Top-Down Process
Strategic Asset Allocation
Strategic Asset Allocation is concerned with the efficient trade-off between risk and return. We use a rigorous Mean-Variance Optimisation (MVO) process to construct a series of Strategic Asset Allocation templates. We consider not only domestic and international equities & bonds but also alternative asset classes such as commodities, real estate and hedge fund schemes.
We have identified a range of asset allocation templates, each with differing amounts of equity, bond, property, commodity and hedge fund investment. The greater the exposure to equities, for example, the greater the potential risks and returns. Unfortunately it is not possible to achieve high rates of investment return without having to accept high levels of risk.
Our investment committee is made up of Fairey Associates Advisers and is chaired by our Head of Research Michelle Gardner. The results are the best of our combined thinking.
