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Three-layered
Downside Risk Protection

Being reactive to portfolio losses invariably generates poor outcomes. Our risk management process incorporates a proactive, layered approach to minimising losses.

1. Sensible Asset Allocation

The investment process is designed to avoid investing in over-valued assets that may be more susceptible to poor performance.

2. Negative Correlated Strategies

Losses are limited by identifying positions that are negatively correlated to the portfolio’s largest risks – eg. using an underweight position in the Korean Won* in the second half of 2015 and early 2016 to hedge against a slowdown in global growth, which is negative for risk assets.

3. Tail Risk Management

Opportunistically invest in tail risk strategies such as options* to protect the portfolio against meaningful downside moves in the market.

This is not an indication that the use of any system or methodology would guarantee that a portfolio may be free from losses.

*Any references to particular instruments are for illustrative purposes only. This is not a recommendation in relation to any named instruments and no warranty or guarantee is provided.