Reducing risk in stressed markets
The above graphic shows the impact impact of volatility, on the MSCI World (EUR), during key periods since 1987.
Many investors seek more than an absolute return solution for their investment.
For example, Absolute Returns are likely to lag equity markets during growth phases.
We advocate MULTI ASSET diversified portfolios and encourage investors to consider introducing the protective qualities of an absolute return fund into a portfolio. However, dampening volatility in the short-term must be balanced against the longer-term benefits of a larger exposure to both ‘active’ and ‘passive’ investment into growth assets.
Limiting short-term ‘draw-down’ on your portfolio may come at a ‘real’ cost in performance over the longer-term.
The blue legend in the above graphic also depicts historical scenario analysis of the Standard Life Global Absolute Return (GARS) Fund during these periods of high volatility.
Annualised VOLATILITY figures (using monthly data from 01 July 2006 to 31 August 2016)
5.30% GARS
13.20% Global Equities
10.80% Irish Pension Managed Fund
Maximum DRAWDOWN figures (using gross daily data to 31 August 2016)
-13.80% GARS versus
-52.90% Global Equities
-46.00% Irish Pension Managed Fund
GARS Performance ( between June 2006 - 31 August 2016)
6.50% gross annualised return
Want to know more? We are available to discuss your options, and we look forward to hearing from you.
Our job is to help you choose a product and structure that will help you meet your goals.
telephone | 091441188 and/or email | office@nelsonlife.ie
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