Executive summary:
- Many clients, particularly retirees are worried about the consequences of another significant market correction.
- The consensus view is that markets are now ‘late cycle’. Most major corrections occur within 8 years, we are now at year 12, the longest on record is 13 years.
- The Financial System Inquiry outlined desirable product features to specifically address sequencing risk – to combine protection, returns and regular income through all stages of the investment cycle (including large market falls.)
- The protection element is reflected in the Funds maximum NAV capital draw-down. In the case of the Gyrostat Absolute Return Income Equity Fund this has been limited to – 2.2% in any circumstances since our inception in December 2010.
- Pro-active investors and their advisors can address sequencing risk by an asset allocation from unprotected growth assets to the Gyrostat Absolute Return Income Equity Fund (a conservative asset – alternative defensive and generate higher returns in more volatile ‘late cycle’ market conditions.)
