Our philosophy and process
We launched the Insight broad opportunities strategy over 13 years ago in December 2004 and have a track record that predates the global financial crisis. The team has a transparent investment process that emphasizes two key principles which underpin and differentiate our investment approach.
1. Accessing a broad opportunity set: we have the flexibility to invest across a broad opportunity with the aim of generating returns and diversify risk. Investments in equities and bonds broadly aim to capture returns from rising markets, and investments in real assets and total return strategies are typically less tied to the performance of equity and bond markets. By combining these different asset classes and strategies, we aim to broaden our opportunity set and enhance diversification beyond that of traditional approaches.
Example investment allocation:
2. Dynamic asset allocation: we take a highly dynamic approach to asset allocation recognizing that specific asset classes can behave in different ways at different points in economic and market cycles. We assertively move our exposure towards asset classes with a favorable forward-return profile and away from those with the opposite characteristics. As a result, our exposure to individual asset classes can vary across a wide range and can be zero when we expect negative risk-adjusted returns.
Historical strategy asset allocation:
We bring these principles together within a multi-dimensional risk framework with the aim of delivering a smoother path of returns over time:
- At a portfolio level: to ensure appropriate levels of risk and diversification
- At an asset class level: including awareness of drawdown risk when running market directional exposure
- At an individual position or strategy level: to ensure that risk is not overly concentrated and that the potential downside in the event of extreme moves is within tolerance levels
We use a range of risk modeling systems to measure the overall level of risk and to estimate the contributions from each of the underlying asset classes and strategies. Underpinning the strategy are the controls provided by Insight’s multi-faceted approach to risk management, which incorporate supervision by different parties and sophisticated systems on a daily, weekly and monthly basis.
For more information on the investment philosophy behind the strategy, please consult the strategy profile.
Our multi-asset strategy investment process is guided by the ethos of flexibility, transparency and control. Our experience has been that adhering to these has enabled us to successfully navigate even the most challenging of market environments. The flexibility of our approach, specifically the broad opportunity set from which we choose our investments, allows our strategy to adapt to changing market conditions.
The transparency of our investment process allows us to constantly assess whether our investment tool kit is sufficiently robust or needs adjusting to capture new relevant market information. This transparency feeds through to our portfolio construction and performance attribution framework which is important in that it facilitates a high level of control enabling us to be confident in our ability to provide downside risk management.
We show a stylized summary of our multi-asset investment process below:
As of December 31, 2018. Assets under management (AUM) are represented by the value of cash securities and other economic exposures, and are calculated on a gross notional basis.*
*Insight North America (INA) is part of “Insight” or “Insight Investment”, the corporate brand for certain asset management companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited and Insight Investment International Limited. Advisory services referenced herein are available in the US only through INA. Figures shown in USD. FX rates as per WM Reuters 4pm spot rates.
Includes employees of Insight North America LLC (INA) and its affiliates, which provide asset management services as part of Insight, the corporate brand for certain companies operated by Insight Investment Management Limited (IIML).
Past performance is not a guide to future performance. Investment in this strategy involves substantial risk of loss. The value of investments and the income from them can fall as well as rise and are not guaranteed, investors may not get back the original amount invested.
Insight North America LLC (INA) is a registered investment adviser under the Investment Advisers Act of 1940 and regulated by the US Securities and Exchange Commission. INA is part of “Insight” or “Insight Investment”, the corporate brand for certain asset management companies operated by Insight Investment Management Limited including, among others, Insight Investment Management (Global) Limited and Insight Investment International Limited. Insight’s assets under management are represented by the value of cash securities and other economic exposures, and are calculated on a gross notional basis. Advisory services referenced herein are available in the US only through INA.
The views herein represent the opinions of Insight and are subject to change based on subsequent developments. They are not intended as investment advice or to predict or depict the performance of any investment. The material contained herein is not intended to provide, and should not be relied on for, investment, accounting or legal tax advice. Further, this material does not constitute a recommendation to buy, sell or hold any security. No offer or solicitation for the sale of any security or financial instrument is made hereby.