Retirement Portfolio Resilience Perspective
Primary Pillar: Risk Pricing Discipline
Supporting Pillars: Retirement Portfolio Construction • Resilience Across Market Environments
This article examines how changing market conditions influence the pricing of risk and the role of disciplined portfolio management in responding to heightened volatility.
It explains how periods of increased uncertainty can create opportunities to actively manage embedded downside protection through dynamic hedging rather than relying on market prediction. Although written before the Retirement Portfolio Resilience Framework was formally articulated, the article demonstrates many of the enduring principles that would later define Gyrostat's philosophy of reducing dependence on favourable market conditions through disciplined portfolio construction, permanent protection and the pricing of risk.
This article forms part of a broader body of research, educational articles and practical insights organised through the Retirement Portfolio Resilience Framework.
Gyrostat Risk Managed Equity Fund (GRME Fund): The GMRE Fund aims to deliver retiree income with downside protection through risk managed investing.
Risk managed investing has protection always in place (dynamically managed as per global best practise), with returns designed to increase with market volatility, and regular income through the complete investment cycle.
Gyrostat class A has operated for 45 consecutive quarters with no losses exceeding 3%, our pre-defined risk tolerance.
The GRME Fund dynamically hedges with an options ovelay to protect against capital losses (in the event of significant market falls below predetermined ‘hard’ protection levels) in respect of the underlying GRME Fund assets and to provide regular targeted income payments.
By way of illustration only, dynamic protection costs are shown at February 2, for a defined period of time and adjusting ‘excess’ in increments of 2.5% at 5.0%, 7.5% and 10.0%.
