- Fixed income
- Real estate
- Absolute returns
Why absolute returns?
The challenges faced by pension schemes to meet long-term funding requirements have grown as volatility becomes an ever more entrenched feature of the investment landscape. By seeking to reduce unrewarded risk, while continuing to target equity like returns, the absolute return approach is designed to match the needs of trustees both in the short and long term.
Absolute return funds are able to do this by applying a range of low-correlation, diversified investment strategies that aim to generate positive returns whatever the market conditions. These strategies are specifically devised to ensure that if any individual strategy produces a negative return this will be compensated for by positive returns from other strategies.
With a typically broad remit, the breadth of opportunity means that managers can respond quickly to changing conditions and avoid assets that become correlated. It also moves the fund management focus to delivering maximum risk-adjusted rewards; because the return target is fixed a successful manager seeks to deliver it with as little risk as possible, an attractive option given the accounting pressures placed on scheme sponsors.
Standard Life Investments’ Global Absolute Return Strategies (GARS) offers a comprehensive approach to absolute return investing that is rarely matched across the investment industry.