Absolute Return Investing

BROADENING YOUR PORTFOLIO’S HORIZONS

GREATER DIVERSIFICATION:
We believe that the use of alternative investment strategies, brings the benefit of greater diversification to a portfolio and in recent years individual investors has been able to gain access to such alternative investments through the development of investment products with lower minimums for investment, shorter investment periods and – importantly – more appropriate tax structures.

LOWER CORRELATIONS:
Traditional private client asset classes generally trade publicly on highly liquid exchanges whereas many alternative investments do not. Alternative investment strategies, or absolute return strategies, generally have low, or very low correlations, with major stock markets and are therefore able to contribute strongly to our objectives of improving the quality of diversification within your asset allocation and controlling volatility.

However, in order to do this, such funds or strategies which have access to such investments are likely to operate a flexible, unconstrained investment strategy, which may include the use of gearing, derivatives and short selling to enhance returns. Furthermore they may also have less frequent dealing dates or potentially greater illiquidity. It is also important to remember that funds which provide such access may be classed as unregulated within the UK market due to their foreign domicile, however some of the risks detailed may also be present within regulated or FSA recognised collectives.

We ultimately believe though that having investments which can profit when markets decline, means protection in adverse market environments and possibly compensation for losses which may arise from exposure to traditional investments. Blending in alternative asset classes within your portfolio places your portfolio at an advantage particularly with a view to managing the volatility of your investments to your target risk profile.