The Diversified Growth strategy seeks to provide a target return of cash + 4% per annum net of fees over a full economic cycle (typically 5-7 years). This is consistent with longer term return of growth assets such as equities but with lower risk (6-10%).
A globally diversified portfolio, designed to take advantage of different market scenarios. By combining many different asset classes, traditional and alternative, we believe it can effectively reduce risk and achieve a return comparable to that of a global equity portfolio. Portfolios are constructed around the principles of:
- Investing in a broad mix of growth assets
- Active, passive and external investing
- Active management, using dynamic asset allocation
- We believe that all assets can be disaggregated into constituent risk premia
- We access these risk premia with an unconstrained growth-bias
- Risk premia are not stable over time, therefore we dynamically asset allocate utilizing valuation and cyclical analysis
- Diversification is a potential means to an end, not an end in and of itself
- We take a pragmatic approach to risk, combining quantitative risk modeling and qualitative scenario analysis
- The path of returns matters, not just the outcome
The Diversified Growth strategy seeks the most attractive risk-adjusted opportunities by investing in a wide range of asset classes to maximize diversification and reduce cross-asset class correlations. Every position must enhance returns or reduce risk to justify its place in the portfolio. We do not seek to add value by trading short-term gyrations in the markets; instead, we use the framework of our active asset allocation process to assess which asset classes we should be over and underweighting.
Asset allocation decisions are grounded by our three stage process, which is illustrated below.
- Separate Account
- Commingled Vehicle