Investment Philosophy

  Core Investment Principles

•  Academically proven asset class allocation strategies are the key to long term wealth maximisation, given a client's risk constraints
• Modern Portfolio Theory provides the most academically defensible default position for determining baseline asset class allocation strategies, but only when markets are "stable"
• Traditional asset class allocation strategies and principles will NOT protect capital when markets are "chaotic"
• Markets change with different economic and business cycles and these can also now be defensibly and systematically exploited in order to manage the downside capital risks that traditional approaches fail to address
• Not all asset classes are equal: some are genuinely strategic and others are cyclical

  Core Principles in Practice at Grosvenor

• A rigorous and disciplined approach to ensuring the efficacy of asset allocation based model portfolio recommendations protect the sanctity of the asset class allocation research via core, cost-effective, MATCHED index funds
• Active vs index is a Red Herring - nothing to be gained from taking a fundamentalist approach to either
• Active investment strategies are an integral complement to index funds - they play totally different roles
• Critically though, active strategies MUST demonstrate consistent value AFTER ALL costs and fees
• Business model of rebating fund mgr fees ENSURES "expensive" managers deliver value
• High transaction cost managers cannot "hide", performance is scrutinised AFTER all fees
• Structure active investment strategies to deliver risk-controlled value to clients net of fees and tax, relative to both risk-free returns and a simple index only strategy