Why invest across multiple asset classes?


In recent years, professional investors have begun to realise that markets are no longer as predictable as was once thought. To mitigate such uncertainty, the dVAM mulit-asset range consists of a variety of assets. Such variety can make a portfolio more stable, because if one asset starts to fall, another may rise and compensate for any losses. It can be hard to predict how the various assets will perform in any given year, so this approach maximises your chances of consistent returns.

How do the funds manage market unpredictability?


The dVAM multi-asset funds don’t just consider returns when selecting assets to invest in. They also seek to maintain a predetermined level of risk in each portfolio. Such an approach makes it much easier to predict how an investment is likely to perform.
That’s because, in any given year, it can be hard to foresee which asset class will deliver the best returns. In contrast, certain asset classes prove, over and over again, to be riskier than others.

Consequently, the investment team is able to create a much more predictable portfolio by allocating assets according to their expected level of risk rather than their expected level of return. That said, as risk and return are two sides of the same coin, a steady level of risk should generate a corresponding level of return.

 

By investing across five major asset classes, we have the flexibility to build portfolios that match clients’ needs, be they conservative or adventurous. 
 
Fixed income

These are bonds – loans to companies or governments for which you are paid a regular fixed rate of interest. Bonds’ stability has traditionally made them popular with investors seeking low-risk investments. However, they generally offer limited returns. Of dVAM Multi-Asset three portfolios, the Conservative portfolio contains the highest proportion of fixed income, while the Growth portfolio contains the least.

 

Equities

Equities are shares in a company that are traded on the stock market. A company’s share price depends on a variety of factors, making equities a higher-risk investment than fixed income, but with greater potential for returns. The dVAM Growth portfolio is largely made up of equities, while our Conservtaive portfolio contains the lowest
proportion of this asset.

 

Absolute return

Absolute return strategies contain a mixture of assets, such as bonds and equities. These funds are actively managed to navigate the peaks and troughs in the market to generate a consistent, stable return over time. GAM has a reputation for particular expertise in this area, and all the dVAM Multi-Asest portfolios have some exposure to absolute return strategies.

 

Alternatives

Alternative investments include currencies, commodities and property. These assets can help diversify a portfolio as well as offer the potential for short-term gains. However, they may be riskier than equities and bonds. That’s because their prices might fluctuate greatly in response to geopolitical issues (as is particularly the case with currencies and commodities). All the dVAM portfolios contain some alternative investments.

 

Cash

Cash – for example, savings in your bank account – is generally safer than other assets. However, it usually offers much lower returns and its value may be eroded over time by inflation. All the dVAM portfolios contain some cash.

We transform challenges into solutions to help protect your capital and reach your investment objectives.
Our main focus is to create an investment strategy that delivers a result and value appropriate for you.

We transform challenges into solutions to help protect your capital and reach your investment objectives.
Our main focus is to create an investment strategy that delivers a result and value appropriate for you.

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