Retirement Portfolio Resilience Perspective
Primary Pillar: Retirement Portfolio Construction
Supporting Pillars: Resilience Across Market Environments • Risk Pricing Discipline
This article illustrates how resilient portfolio construction can complement existing long-term growth assets rather than replace them.
Viewed through today's Retirement Portfolio Resilience Framework, the enduring principle is that retirement portfolios should be strengthened by combining long-term growth with complementary resilience strategies that help address sequencing risk and reduce dependence on favourable market conditions. While the original publication reflects the investment language and market conditions of its time, it also demonstrates an early expression of the portfolio construction philosophy that has subsequently evolved into Retirement Portfolio Resilience.
This article forms part of a broader body of research, educational articles and practical insights organised through the Retirement Portfolio Resilience Framework.
Gyrostat Absolute Return Income Equity Fund:-
8 year track record of combining returns, income protection
- Returns: 6% - 8% pa in trending markets, greater than 8% pa in volatile markets, short term bond returns in stable markets
- Income: Minimum cash rate + 3% paid semi-annually (currently 4.9% p.a.) from dividends and franking credits
- Protection: No quarterly NAV draw-downs exceeding 2%
Includes a ‘tail hedge’ to gain on large market falls
Volatility has returned since February 2018, The Fund performed as anticipated for these market conditions. with an uplift in NAV of 4.6% over this 9 month period (annualized rate of 6.2% p.a.).
In November to date the Fund NAV has increased a further 1.8%. (annualized rate 7.7% p.a.)
The opportunity:-
Our Absolute Return Fund provides the opportunity to invest in a portfolio of large cap Australian securities which includes banks currently delivering 9.0% - 11.0% yields with a 2% downside risk tolerance in place (no quarterly draw-down over 2% in the 8 year history).
The concentrated portfolio currently holds positions within ASX20 stocks.
