AN EMPHASIS ON RISK MANAGEMENT
Within investments, as with many things in life, there are different types of risk. These include the impact of changes in interest rates, the threat of inflation and company – or even government – default. To take all these different types of investment risk into account, the Compass portfolios target a broad measure: volatility. We calculate volatility by applying the standard deviation – a measure of the amount of variation or dispersion of a set of data values from its mean – to investment returns.
Because Compass is a range of diversified multi-asset portfolios, by targeting assets with lower correlations with each other, we believe we can manage volatility. The expectation is that by holding assets that typically perform differently to each other, the portfolios should generate a less volatile performance overall than the individual asset classes. And because it is a range of portfolios, Compass enables clients to increase – or decrease – the level of risk in their investments as their circumstances change.
LEADING THE WAY
Old Mutual Wealth boasts one of the largest and most experienced multi-asset capabilities in the market, and has a long history of innovation in researching investments and building portfolios designed to meet the needs of clients: in the late 1980s, the business pioneered the ‘multi-manager’ approach. Furthermore, the multi-asset team has significant experience in managing risk-targeted investments, having been one of the first to launch such solutions in 2008.
Informed by its long track record in understanding and delivering on client needs, as a business we have hard-wired our investment offering to focus on generating good outcomes for clients and meeting their needs. The Compass Portfolios, designed with the needs of clients in mind from the very outset, aim to achieve exactly that.
