Objectives Based Portfolios are different from the traditional Strategic Asset Allocation (SAA) diversified funds of old in a number of ways;

  • They are more easily understood and applied to individual circumstances because you can easily match specific objectives to specific investments.
  • There is a much greater focus on risk (volatility) of asset classes given the more defined investment objectives of these funds over specific time frame.
  • They typically aim to limit the extent and severity of loss of capital value. As a result, objectives based portfolios exhibit a strong focus on capital protection.
  • They have much broader asset allocation ranges allowing the manager greater flexibility in what asset classes and investments the fund invests, rather than have a set Strategic Asset Allocation from which they rarely deviate.
  • They generally have a greater ability to allocate to alternative asset classes or investment strategies such as equity long/short, infrastructure, commodities (soft and hard), CTA and global macro.
  • They generally do not benchmark against traditional capital markets, such as shares and property, which can be volatile and have little relevance to the outcomes required by investors.