In-house rules
The team invests across a total of 18 asset classes, splitting them into growth and defensive buckets. Absolute return funds can fit into both categories, more cautious strategies targeting low volatility and cash plus 2-3%, and riskier multi-asset funds incorporating varied sources of alpha.
Given the in-house capabilities of the multi-asset team, it is no surprise the MyFolio range has a fair chunk of assets allocated to the multibillion pound SLI Gars fund.
In the Managed range this is paired with the Standard Life Absolute Return Global Bond Strategies Fund, while in the Multi-Manager range Insight Global Absolute Return is also used. A recent addition is Fulcrum Diversified Absolute Return, which Hambi says complements Gars well as it is more directional in its trades.
“Any view that Gars takes is based on a three to five-year outlook whereas Fulcrum is prepared to do short-term trades,” he says. “For example, the managers had a view on Japanese equities for a very short term but made their money and took it off in five days.
“We are doing a lot of work in the multi-asset absolute return space and looking to diversify our holdings there, but we have to know exactly what each strategy does and get it right, especially as a company that is known as a leader in that space.”
