Absolute and total portfolio returns: views from Cbus and VFMC
Moving to a total portfolio approach brings flexibility to search for the best ideas. How does the focus on the risk-return characteristics of investments rather than traditional asset labels impact the investment decisions of the fund? What role do absolute return strategies play in the portfolio and how active are the risk exposures?
Scott Pappas, senior portfolio manager, absolute returns strategies, Cbus Super
Huey Miin Lim, portfolio manager, fixed interest and absolute returns, VFMC
Moderator: Laurence Parker-Brown, institutional content producer, Conexus Financial
- Asset owners are fee aware and explore different types of relationships in order to help reduce the costs of new investments, including co-investments.
- Different investment teams will look towards absolute returns with their own perspective but often this approach is seeking low or no correlation to equites to avoid duplication.
- The extent to which fixed income can provide diversification is diminishing which increases the prominence of absolute returns strategies in that ability to protect against downside risks within the equity positions.