Retirement Portfolio Resilience Perspective
Primary Pillar: Retirement Portfolio Construction
Supporting Pillars: Risk Pricing Discipline • Resilience Across Market Environments
This article explains the original design philosophy behind Gyrostat by examining how thoughtful portfolio structure can address recognised weaknesses in traditional portfolio construction.
It describes how embedded downside protection, diversified non-correlated exposures and disciplined portfolio design can reduce portfolio fragility while improving resilience across changing market environments. Although written before the Retirement Portfolio Resilience Framework was formally articulated, the article establishes many of the enduring principles that would later define Gyrostat's philosophy of helping investors remain financially and emotionally invested throughout their retirement journey, regardless of the path markets take.
This article forms part of a broader body of research, educational articles and practical insights organised through the Retirement Portfolio Resilience Framework.
Gyrostat has been driven by a fundamental belief that for investors portfolio structure is the path to excellence. In seeking to provide unique value to investors, we looked at the assumptions implicit in traditional portfolio design and identified fragilities which have arisen from changes to market conditions.
We then designed our Fund to create an ‘add on piece’ to typical portfolios to address these known weaknesses.
Gyrostat has a 10 year track record of no downside exceeding -2.2% in any circumstances. And our returns have increased with levels of market volatility (both up and down), consistent with our guidance.
Developing additional Fund elevated return features
After consulting extensively with our investors and industry participants, we have further refined our Fund features to add more value to investors’ portfolios.
We were asked whether we could diversify the market conditions under which our returns would be more elevated, while leaving our protection and income features unchanged.
- Make money on ‘large’ market falls – the ‘left’ tail.
- Make money on large stock gains – the ‘right’ tail.
- Increase Fund exposure to include a broad range of international assets
