New Diversifiers

In today’s more volatile capital markets, traditional stock and bond investing have become less powerful tools. New solutions can help. Multi-asset strategies aim both to exploit opportunities wherever they may arise and to meaningfully smooth the ride as experienced by any one asset class. Single- and multi-alpha alternatives strategies provide significant nontraditional diversification against both the risk-reducing and return-seeking services. All strategies share an emphasis on downside protection.

Multi-Asset

Dynamic Asset Allocation

 

Globally diversified multi-asset portfolio that seeks to moderate overall volatility and limit extreme outcomes in times of market stress—without sacrificing long-term growth potential. Continuously adjusts the mix of global equities, bonds and related “opportunistic” assets based on our view of prospective market conditions. Combines comprehensive quantitative analysis with the fundamental insights of our senior investment leaders across the firm to weigh near-term return potential against potential market risks.

Emerging Markets Multi-Asset

 

The Emerging Markets Multi-Asset (EMMA) solution is an actively managed portfolio with exposures to emerging asset classes that include equities and fixed-income instruments—including high-yield securities and currencies. EMMA seeks long-term capital growth with moderate volatility. The strategy isn’t limited in the amount of net assets it can invest in equities, fixed income or currencies—at any time, investments in one of these asset classes may be more than 50%. The strategy is also not limited by credit quality, country, industry sector or market cap.

Real Asset Strategy

 

The Real Asset Strategy is designed to provide diversified, liquid exposure to real assets, including real estate, energy, metals and agriculture. The strategy dynamically shifts exposure to find the best trade-offs among risk, return and inflation sensitivity. A flexible approach, a commitment to research and a focus on risk management have helped the strategy navigate uncertain markets and identify risks and opportunities.

Customized Retirement Strategies

 

The Customized Retirement Strategies (CRS) are target-date investment solutions that can be tailored to the unique, evolving demographics and objectives of a defined contribution plan’s default option. In addition to providing a customized glide path, the open-architecture platform of CRS solutions gives plan sponsors the flexibility to mix and change individual strategies and asset classes—including active and passive investments—over time. This improves transparency and cost control while enhancing fiduciary strength.

Dynamic All-Market

 

Dynamic All Market seeks to maximize total return consistent with the Adviser’s determination of reasonable risk through: Risk Balanced Approach: An asset allocation portfolio that balances risk across global growth, inflation-sensitive and defensive assets, to seek higher returns with more consistency throughout economic cycles, than a conventional balanced portfolio. Dynamic Shifts: The Fund dynamically adjusts portfolio risk exposures, based on the manager’s quantitative and fundamental perspectives on market opportunities and risk. All-Asset Opportunity Set: Takes advantage of opportunities in a wide array of asset classes and markets around the world. The portfolio invests across three broad categories of global assets – growth, inflation sensitive and defensive assets.

Education Strategies

 

The Education Strategies are diversified, multi-asset solutions for college savers. They invest in equities, fixed income and diversifying assets. Age-based strategies offer allocations tailored to a child’s age that are adjusted over time to become more conservative as college draws closer. Risk-based strategies offer fixed allocations tailored to several mixes of risk and return potential. Each strategy incorporates a volatility-management component with systematic risk control, which can help reduce volatility and improve the chance of building long-term wealth.

Alternatives

Long/Short Equity

The Long/Short Equity strategy seeks to achieve long-term growth of capital. Its investment universe is primarily composed of large- and mid-cap US stocks, although the Portfolio opportunistically invests in non-US issuers and smaller-cap companies. Investments are unconstrained by style or sector. The Portfolio’s experienced investment team applies intensive fundamental analysis and macroeconomic insights to identify investment opportunities and potential short-sale candidates. These candidates can be characterized by their potential for earnings growth on a three- to five-year time horizon; their strong management teams and understandable, transparent business models; their emphasis on catalysts that could propel earnings, such as positive earnings revisions or dissipating investor fear about a given stock; their shareholder-friendly actions (e.g., dividends and share buybacks); and, in the case of short candidates, their short-term valuation concerns or long-term headwinds to their business model. The team’s process includes the flexibility to adjust the Portfolio based on evolving market opportunities, including by reducing its net exposure when market risk is excessive. Market exposure is typically 30%–70% net long.

Multi-Manager

The Multi-Manager strategy offers portfolios (hedge funds of funds) as commingled funds and separate accounts. The commingled funds seek to provide attractive risk-adjusted returns over full market cycles with less volatility than that of the broad equity markets. The funds are selected by our Alternative Investment Management group, which has a long track record of successfully constructing and managing portfolios of external hedge funds and has achieved very strong risk-adjusted returns since inception. The team has a disciplined approach to manager selection that includes dedicated risk management and operational due diligence. The team uses proprietary and third-party quantitative tools to look at a combination of exposures and return information to capture the risk factors of the underlying funds as well as their combined risk in each portfolio.

Real Estate Debt

The Real Estate Debt strategy seeks to take advantage of limited competition and the liquidity gap stemming from traditional capital providers’ inability or unwillingness to underwrite transitional real estate credits in the face of significant maturities. The strategy purchases and originates first mortgage loans and loan participations secured by high-quality, transitional properties throughout the US. Transitional first mortgages generate quarterly or monthly dividend income for investors at sizable spreads to US Treasuries on an unlevered basis. Downside risk is mitigated by a rigorous credit process that focuses on fundamental real estate underwriting and control of the servicing of purchased or originated loans.

Real Estate Equity

The Real Estate Equity strategy provides access to direct US real estate investments through equity and/or debt. The strategy emphasizes acquiring controlling interests to resolve temporary distress. It seeks to create value through the restructuring, recapitalization, repositioning and reselling of stabilized assets, with a focus on fundamental, deep-value real estate underwriting and analysis. The strategy typically targets opportunistic investments with asymmetric risk/reward profiles and broadly diversifies investments across geographies and sectors as well as across investment vintages, deal sizes, operating partners and counterparty concentration.

Risk Parity

A highly liquid, long-only, multi-asset portfolio that dynamically allocates the portfolio by risk, not dollar, weights. The strategy is constructed to lose less in declining markets and generate strong risk-adjusted returns by balancing drawdown risk across growth-sensitive, safety and inflation-linked risk buckets. Risk parity strategies typically allocate capital so each risk bucket contributes equality to portfolio volatility, reducing concentration risk; these strategies also use leverage to achieve targeted volatility.

Securitized Assets

The Securitized Assets strategy is designed to take advantage of an emerging set of investment opportunities in mortgage finance, and it seeks to provide attractive absolute-risk-adjusted returns through a combination of current income and capital gains across market cycles, principally through investments in mortgage-related securities. The strategy invests primarily in non-agency residential mortgage-backed securities, commercial mortgage-backed securities and agency mortgage-backed securities. It may also invest in other securitized assets, including asset-backed securities.