Systematically moves between zero and 100% equity allocation with the aim of outperforming a traditional growth portfolio on 1-3 year horizon and outperforming global equities across the business cycle.
The Systematic Equity Allocation (SEA) portfolio is a dynamically managed multi-asset portfolio. By systematically shifting the equity allocation from zero to 100% as the outlook for financial markets changes, the strategy creates a return, which is decorrelated from equity markets when these struggle. At the same time, the strategy limits volatility and drawdowns.
As indicated by the strategy name, we use a systematic investment process. We seek to benefit from the consequences of the self-reinforcing effects of the economy and financial markets influencing each other and creating strong positive and negative trends, both when things improve and when things deteriorate. We use both qualitative and quantitative analysis in the decision-making process.
This strategy is managed by shifting between three levels of equity allocations depending on the market outlook. The strategy holds only Investment Grade and High Grade bonds when the outlook is most negative, the “Balanced” allocation contains 67% in equities, while the “Positive” allocation contains 100% in equities.
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