Alternative by Model
This method of asset management uses ten target portfolios, obtained by combining alternative and traditional means of investment, in order to get different risk/return profiles to suit each customer's personal risk propensity and financial objectives.
The portfolios are built up according to certain standard scenarios and the expected results of the strategies in the various market scenarios considered. All the strategies are handled by a team of experts from our subsidiary Saint George Capital Management SA (SGCM).
The main novelty compared to classic asset allocation is the type of approach, which attempts to quantify gains and losses. The modelling of potential gains and losses in various market scenarios enables the advisor to recommend the best possible compromise to suit each investor's personal expectations.
The introduction of some models with high percentages of alternative instruments allows maximum diversification and the search for an absolute return that is not linked to financial market trends.
|
|
Cash |
Fixed Income |
Fixed Income High Yield |
Equity Defensive |
Equity |
Hedge |
Total |
|
M0 |
100% |
|
|
|
|
|
100% |
|
M1 |
50% |
50% |
|
|
|
|
100% |
|
M2 |
20% |
50% |
|
|
|
30% |
100% |
|
M3 |
|
30% |
|
5% |
|
65% |
100% |
|
M4 |
|
|
|
15% |
|
85% |
100% |
|
M5 |
|
45% |
|
25% |
15% |
15% |
100% |
|
M6 |
|
40% |
|
30% |
30% |
|
100% |
|
M7 |
|
|
|
|
|
100% |
100% |
|
M8 |
|
|
10% |
10% |
50% |
30% |
100% |
|
M9 |
|
|
15% |
|
65% |
20% |
100% |
|
|
|
|
|
|
|
|
|
The makeup of the models is not static; it can change with time as investment vehicles are introduced or eliminated, or expectations of the performance of individual strategies change.
There are three groups of models, in increasing order of return/risk:
- Alternative Prudent: allocation varies from modelsM0 to M2
- Alternative Absolute: allocation varies from models M3 to M5
- Alternative High Return: allocation varies from models M6 to M9
