Craig Racine, Chief Investment Officer, reviews how Gyrostat constructs portfolios designed to deliver retiree income with downside protection in an era of market shocks and increased volatility.
The webinar was moderated by Damien Hatfield, Co-Founder and Head of Distribution from Mantis Funds.
INTRODUCTION
Absolute return, low risk fund
At 30 June: 12 M + 12.28%; Monthly standard deviation 1.5%
Amongst top performing absolute return funds in Australia 12 M FE Analytics
Alpha excess returns and income by avoiding large losses through the complete investment cycle
11 years track record, 46 consecutive quarters no losses exceed pre-defined 3% hard risk parameter
ASX blue chip shares with protection at stock specific level
KEY FEATURES
Returns: In rising or falling markets
Increase with volatility including large market falls
Income Paid quarterly largely through dividend pass through
'bumper' in 4th quarter where 12 M returns > 8% ie: extra income for retirees
Protection Address sequencing risk - structure avoids large losses
Dynamic hedging (cf. other approaches, diversification, 60-40 stock/bonds, buy-write funds, dividend capture allocations, long-short etc)
Gyrostat at global best practices benchmarking - see http://www.gyrostat.com.au/news/risk-managed-investing-global-best-practice-supporting-pack/
RETURN ENHANCEMENTS
'Hard' risk tolerance from 2% to 3% per quarter since March 2019
Capital deployed more to resource stocks from September 2021 (higher yields, more volatility)
Permanent left side tail for gains on market falls
ROLE IN PORTFOLIO
Complements existing retiree solutions which are 'long' only
Non correlated with market
"Australian equities (defensive) or "alternatives absolute return" allocation
