Investment strategy

The decision as to the proportions of a portfolio to invest in different asset classes, for example 60% equities, 30% bonds, 10% property. Research indicates that the investment strategy decision typically accounts for the majority of returns rather than the choice of which manager to appoint to manage each asset class. Investment strategy normally refers to longer term (eg three years plus) asset allocation decisions.

This is an investment approach in which a manager seeks to generate returns, over the shorter term, by investing long or short in those asset classes which are expected to outperform or underperform respectively. The approach is implemented typically either wholly or largely via derivative contracts.

A strategy which provides investors with a low governance way to access multiple types of credit-related asset classes. Typical investments include (but are not limited to) high yield bonds, leveraged loans, structured debt and emerging market credit. Portfolio manager performance is typically measured against a “cash+” type target.

An investment approach that focuses on generating the specific (“required”) investment return needed to meet a particular investment objective (eg for a pension scheme, to be fully funded on a given basis in x years’ time). In order to deliver the required investment return, such a strategy often holds a broad spread of assets, appropriately weighted to minimise the overall level of portfolio risk, consistent with the required return.