A Global Tactical (GT) Mandate undertakes the same FX and precious metals positions than the Currency Overlay Program (COP) mandate + up to 11 other risk weighed positions distributed across the equity, fixed income and commodity asset classes. There is no initial strategic asset allocation involved with this mandate. We invest dynamically in a diversified set of positions across most asset classes using stocks, bonds, foreign exchange, precious metals by employing different financial instruments including futures and options.
This mandate seeks superior risk adjusted returns and can be set to "neutral" with extreme rapidity due to the limited number of positions held in liquid securities (mostly large and cost efficient ETFs') or financial instruments.
The GT model portfolio (sample report) targets a global level of risk (in terms of VAR consumption) that is similar to a "growth orientated" portfolio (or a medium high level of risk). The GT model portfolio is our response to challenging market conditions requiring constant vigilance.
In an environment where returns from buy-and-hold investments have become unpredictable, we offer clients a nimble and highly liquid portfolio management solution seeking attractive risk adjusted returns in "all weather conditions".
A GT portfolio is constructed and calibrated using a derivation of the "risk parity" methodology taking into consideration volatility and cross asset correlation rather than fixed asset allocation weights. Risk parity tends to target specific levels of risk (or tracking error) and to distribute slices of a global risk budget across different positions within a portfolio. Risk parity strategies contrast with traditional allocation methods that distribute fixed percentages of a portfolio’s NAV across investment classes such as with the typical 60% stocks 40% bonds “balanced” portfolio approach. A portfolio following risk parity (or a derivation of this asset allocation method) is less likely to be too adversely impacted by one asset class performing very poorly at any given point in time as changes in volatility and correlation will tend to force adjustments to the portfolio's composition, keeping it more balanced in terms of risk distribution over time.
A Global Tactical (GT) Management mandate may suit institutional and sophisticated private investors. It is geared towards investors interested to invest in a broad range of tactical positions spread dynamically across a diversified range of views, calibrated and scaled according to a more even distribution of risk points than with standard fixed or semi-fixed portfolio asset class weights. A GT mandate relies mostly on tactical rather than long term considerations. The minimum portfolio size is CHF0.5mn.