About GARS
The Global Absolute Return Strategies (GARS) approach aims to provide positive investment returns in all market conditions. The strategy has a cash* benchmark and targets a return of cash* +5% per year. Crucially, GARS seeks to meet this target with less than half of the volatility associated with equities markets.
GARS adopts a truly active approach to diversified asset allocation, utilising a wide range of asset class exposures. Alongside dynamic allocations to traditional assets such as equities, fixed income and listed real estate, GARS exploits advanced sources of market, relative-value and directional returns. GARS is able to select strategies freely across geographies and markets, investing where the best return prospects are available within robust risk constraints.
The GARS strategy was initially developed to address the investment return and volatility needs of the Standard Life Staff Pension Scheme in September 2005. The core requirement was to minimise funding risk while also reducing the funding gap that had developed in the wake of increased market volatility – delivering good returns but with less volatility than traditional investment strategies. The success of GARS in achieving this goal has been a key driver in its adoption by an increasing number of schemes across the UK and around the world.
Typical breakdown
As GARS uses derivatives to implement many strategies, breaking the approach down by the percentage invested in each asset class doesn’t give a true reflection of its investment positions. Instead, we measure each strategy’s contribution to overall risk.
The first pie chart below shows the actual physical allocation. The second includes derivative exposure to give a more informed view of the different market strategies and the diversified nature of the portfolio.
The information contained on these pages is for investment professionals only and must not be relied upon by anyone else. This Fund is not guaranteed, a capital protected product or a substitute for cash. The value of your investments can go down as well as up. In order to achieve its investment objectives the Fund will make extensive use of derivatives.
