Many fund managers are closely aligned to the index and thus achieve index returns whilst charging active fees. While VIP is Index aware, we are willing and able to significantly deviate from Index should we believe it is in the best interest of investors to do so. Our key point of difference relative to many industry participants is our ability to become more defensive in portfolios should we believe market conditions warrant.
Our experience with clients has shown us that investors are not only seeking sound risk adjusted returns over the longer term, they are also looking for a manager with the ability and willingness to significantly reduce market exposure should a manager believe there is an elevated risk of downside in markets due to factors that may include extreme valuations or unfavourable economic conditions.
Our belief has reinforced our investment philosophy of delivering Excess Risk-Adjusted Returns by undertaking an active approach of investment within undervalued assets with a focus on wealth preservation and risk reduction. Our objective of delivering Excess Risk-Adjusted Returns and wealth preservation is achieved via a tactical asset allocation approach that many of our peers are unable to employ due to mandate constraints.
Our approach begins with a strategic allocation to asset classes based on an investors risk tolerance. Asset allocation is constantly reviewed from a risk perspective.Based on various inputs ranging from asset specific factors to overarching macroeconomic factors. Should we view valuations as being unfavourable, we are willing to significantly reduce exposures in order to any of the asset classes.