Investment strategy
Setting of investment strategy is the most important decision that Trustees make. Our advice is focused on helping Trustees understand the risk and rewards of potential strategies to arrive at the right mix of asset classes for their scheme's circumstances. This includes consideration of the traditional asset classes, such as equities and bonds, and alternatives, such as, property, infrastructure, fund of hedge funds, active currency etc.
We provide trustees and sponsors with a clear road map for discussing investment strategy.
Insure (hedge) “unrewarded risks”
- interest rates / inflation / currency
Diversify the assets
- asset classes / manager risk
Switching policy
- rebalancing, locking-in gains, use of cash flows
To help client navigation, we have a suite of interactive tools that can help Trustees understand the risks and rewards of different combinations of asset classes, and the principles sources of risk from their strategy. These tools allow Trustees understand the “journey risk” - the risk of a significant deficit arising in the next few years, and the “destination risk” - the ultimate probability of meeting the benefit promise.
The investment strategies that our clients adopt are fundamentally “liability driven”. At the outset, we educate clients about the nature of their scheme's future cash flows, and how the associated risks of meeting them can be appropriately managed.
We believe our approach is different - where it is apparent that over the long term an increase in lower-risk bond investments is appropriate, we look to manage such a transition intelligently, for example, using switching mechanisms based on relative market levels.
