Asymmetric Returns
The Glacier Invest Real Income Solutions are underpinned by an absolute return philosophy. In simple terms, an absolute return philosophy focuses on the amount that an investment earns. Also referred to as the total return, the absolute return measures the gain or loss experienced by an asset or portfolio, independent of any market benchmark or other standard.
The absolute return philosophy is implemented through asymmetric returns. At its most simplistic level, it means higher and more positive returns, and lower and fewer negative returns – achieved through active risk management. Besides reducing volatility in returns, asymmetric returns are designed to preserve capital and offer downside protection.
We aim to address two questions:
- How can we manage market downside?
- How do we collect market upside?
The secret is to manage as much of the market downside as possible, so that a higher upside does not become a pressing need and to create a smoother return experience and less participation in market downside. Thereby limiting the likelihood of investors switching to cash out of fear of continued negative/poor returns.
In the Glacier Invest Real Income Solutions, managing volatility in the client’s portfolio matters, as does the sequence of returns as well as the way in which those returns are delivered – monthly and annually.