Risk management and controls
GARS is expected to exhibit between one third to one half of the investment risk of a conventional, long-only, active global equity portfolio.
In managing GARS, the use of inflexible conventional asset allocation limits is eliminated. Instead, the individual contribution of each strategy to GARS' total risk is analysed and restrictions are set to ensure that no individual strategy dominates the risk profile. These perform in a similar way to a strategic benchmark in that they prevent concentration of risk.
This approach offers three main benefits:
- investments are only made where the risks are fully understood
- by understanding how individual strategy risks interact, a truly diversified portfolio is able to be constructed
- risk exposures can be communicated clearly and concisely.
The approach to risk management is not restricted to the analysis of individual strategies. Effective monitoring of counterparty credit risk is an important element of managing GARS. Counterparties are carefully examined and exposures are amended where necessary.
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.
