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Investing Beyond Bonds

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Market Opportunity

Investors today are faced with a challenging investment landscape where markets are increasingly unpredictable, major divergences exist between key economic zones, equity valuations are at all-time highs and interest rates are exceptionally low. Future divergence in rates can create volatility and lead to opportunities across markets.

Going Forward, We Expect Divergence in Monetary Policy


Divergence-In-Monetary-Policy

Source: Bloomberg. November 2016. The data shown is for informational purposes only and is not indicative of future portfolio characteristics/returns. The economic and market forecasts presented herein are for informational purposes as of the date of this presentation. There can be no assurance that the forecasts will be achieved.  Please see additional disclosures at the end of this presentation.

Our Approach - Capitalizing on Divergence

The GS Global Strategic Macro Bond Portfolio (SMB) is a macro-focused, alternative fixed income investment portfolio which reflects our high conviction views on global interest rates, local currency and emerging market debt with the aim of generating long-term absolute returns.

Alternative Investment Techniques

Absolute return investing offers a wider opportunity set with less dependence on traditional markets.

Macro Focus

The Portfolio invests purely in macroeconomic themes and does not seek to generate alpha by investing in credit, equities or commodities.

Risk Management

The team adopts a rigorous risk management approach with a focus on downside risk*.

* The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

A Diversified and Dynamic Approach

We believe that without teams focused on specific markets, it can be difficult to spot market inefficiencies and attractive investing opportunities. Specialising in this way allows us to look for alpha opportunities that may be less correlated with one another, or even uncorrelated altogether.

Diversification does not protect an investor from market risk and does not ensure a profit.

Dynamic Risk Allocation


Our Portfolio allocates risk to distinct alpha strategies covering global interest rates, currencies, liquid mortgages and emerging market local debt.

 

Global-Strat-Macro-Bond-Graph

Source: GSAM December 2016. Portfolio Inception October 2014. The above illustration explains how the Portfolio Managers allocate risk in consideration of market movements.

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