GFIN Investment Management wants to change the way investors think about markets. Our aim is to manage risk rather than primarily chase returns, and help investors navigate through the short-term so that they can focus on the long-term.
Investment Strategy
The investment process for GFIN Three Seasons program is systematic and trading decisions are based entirely on proprietary quantitative models. The asset allocation motives behind this program are the result of client feedback. The current economic climate and demographic demands give a priority to dividend yield and capital preservation. The 3 Seasons accounts hold a core of high yield stocks and apply a futures-based overlay to boost returns plus contain downside risk whilst aiming to enhance a portfolio’s risk-adjusted return.
GFIN’s managers are positive about the inter-play between market risk and return which we observe is often based on investor perceptions rather than particular measurements of market risks. To this end, 3 Seasons median market exposure is circa 80% long with risk adjustment ranging from 50% short through 130% long market exposure. Based on our observations of financial market dynamics, 3 Seasons attempts to reconcile Efficient Markets Theory with behavioral finance frailties of sticking to one’s investment plan.
Approach
It is close to impossible for individuals to be the idealised “buy and hold” long-term investors they know they should be given standard investment options. Investors understand that attractive long-term returns require long-term investment. However when superannuation portfolios experience a significant decline in value, their financial survival instincts make it extraordinarily difficult for them to keep their remaining wealth in the same portfolio strategy. It is also reported newer investors can have lower tolerance for risk and are more likely they are to abandon their investment strategy.
By actively overlaying portfolios GFINs aim is to make it easier for individuals to stay invested and to achieve the potential returns associated with long-term investing. Rather than passively accepting whatever level of risk the markets may offer, we actively adjust market weighting to provide investors with a more consistent amount of risk within the 3 Seasons strategy. The primary goal is to contain changes in market risk and ultimately enable investors to stay focused on the long term.
Philosophy
Market dynamics and efficiency will vary over time and investment strategies must allow for this.
Any single model’s effectiveness will vary over a given time period.
Risk management can be an important source of alpha.
It is not the number of securities in a portfolio that determines diversification; it is the number of risk factors.
Account Offerings
Three Seasons – Australian Share Fund. 6% performance hurdle, more information HERE
Three Seasons – International Share Fund. 6% performance hurdle, more information HERE