FAM's global multi-asset strategy often serves as the foundation of an investor's portfolio. It's designed to seek out opportunities across different countries, sectors and asset classes, and it's almost impossible that the strategy is unable to find any investment opportunities throughout the whole market cycle.
Our multi-asset strategy aims to harvest gains by allocating across stocks, bonds and alternatives. Our not constrained by benchmark approach equips us with the flexibility to navigate through the ups and downs of markets and focus on better risk reward sectors to generate long-term performance. By investing meaningfully into alternative strategies, we can reduce the portfolio volatility without compromising on the return.
Investors have to grapple with two major components of any potential interim decline in their portfolio:
1. The size of the drawdown.
2. The time it takes to recover.
During the 2008 crisis, an equity portfolio had a maximum decline of 55%. Certainly there are investors that are able to accept such a sizeable decline, but such volatility is not for everyone. For those who were able to stay invested, it would have taken them 55 months to recover to the previous peak. Again, there will be investors who find it difficult to wait out this recovery period without being tempted to throw in the towel and lock in their losses. That is why FGO is designed to drop less and recover much faster than an equity portfolio, without compromising on the long term compounding.