Intech has revealed two of the four managers it will use for its new Global Tactical Strategies (GTS) fund-of-funds.
Barclays Global Investors and Mellon Capital will each run a mandate for the fund, which claims to completely eliminate security selection as an alpha-generating factor. Intech’s head of investment research, Michael Coop, said Barclays’ GTS ranged across 108 different markets, including several not entertained by the value-biased Mellon product, such as emerging market currencies, commodities and industry-level long-short equities. GTS managers make most of their returns from asset allocation, and market selection within asset classes. Coop said whereas most GTS managers rarely bet within individual equity markets – for example using the S&P 500 as a proxy for industrials and the Nasdaq as a proxy for technology – Barclays had a “granular” approach which saw it identify baskets of stocks representative of particular industries, such as media or insurance, and accordingly go long one basket and short another. Intech hopes to make the GTS fund-of-funds available to clients who have requested it soon, once some seeding delays with the remaining two managers are rectified. Within a standard 70:30 growth fund, Intech found that if a 5 per cent allocation to a GTS proxy (drawn from the 15 managers on its database) replaced part of the international shares exposure, the equities share of alpha plummeted from 91.6 per cent to 61.8 per cent.
As super fund CIOs return to work for 2025, all eyes are on two things: Donald Trump’s presidency, and inflation. But they’re not the only issues that will drive investment decisions and returns, and some of them may present an unfamiliar set of challenges for a cohort of investment professionals that has grown up experiencing a particular set of market and economic conditions.
Simon HoyleJanuary 7, 2025
