How we invest

A comprehensive three-stage process gives the opportunity to develop profitable investment insights, with safeguards to ensure effective decision making.

Idea generation

The multi-asset investing team carries out extensive research and risk analysis using our Focus on Change investment philosophy. The team works closely with our asset class teams to identify 3-year investment opportunities across global asset classes which are then developed into strategies.

Our Focus on Change philosophy seeks to identify the key drivers affecting markets and the dynamics behind them. This is supplemented by analysis of what is priced into an investment. We then understand what is changing and whether this will lead to revised market expectations/price. We recognise that different factors drive markets at different times in the investment cycle so we are not inherently growth or value biased or necessarily momentum driven. We therefore may have an opportunity to outperform throughout the cycle. This consistent approach is applied across all teams and facilitates a common investment language between asset classes.

Selection

Each strategy is reviewed and approved by the Strategic Investment Group, which contains our most strategic long-term thinkers. The approval of new strategies depends on:

• Conviction – expectation of a positive return, with acceptable levels of risk
• Diversification – whether a strategy will enhance the portfolio risk profile
• Liquidity - whether significant positions can be implemented and altered with little impact.

Before implementation, each strategy is also analysed by the risk experts within the multi-asset investing team, focusing on its impact both in isolation and on the portfolio as a whole.

Implementation

The multi-asset investing team implements the approved investment strategies efficiently and effectively using an array of standard market instruments, e.g. direct investment, index futures and swaps. The team makes active asset allocation decisions and ensures the GARS portfolio meets robust risk management constraints.