Investment process

We have designed the GFS investment process to capitalize on our extensive research at both a macro and micro level. In doing so, we aim to pool our best investment insights that we believe will add value over our two- to three-year timeframe.

GFS Investment Process

Idea generation

We believe the most effective way to build a durably diversified portfolio is to capture investment ideas from a broad range of research methodologies. At a micro level, our asset class specialists undertake extensive research and analysis to gain insights into the key performance drivers and expected returns of potential investments. From this process, we can identify many investment themes. When combined with the macroeconomic insights of our multi-asset investing team, they provide an abundant source of opportunities for GFS.

Strategy selection

Our senior investment managers and on-desk risk specialists must examine and approve proposed strategies before they can be included in GFS. Each strategy must fulfil our criteria regarding:

  • conviction in its return potential
  • its effectiveness in mitigating risk
  • its liquidity and scalability.

We rigorously examine and review new strategy proposals as they arise, and regularly requalify those already approved for the portfolio. Our aim is to assemble and maintain an array of strategies in which we have high conviction and that will work well together.

Portfolio construction and implementation

Once strategies have been approved, the portfolio managers, in consultation with colleagues in our risk and implementation teams, determine:

  • the allocation to each strategy
  • the type of instrument to be used in implementation
  • the timing of trade entry and execution strategy.

We can use all conventional derivative instruments to express investment ideas, provided these offer clear, regular pricing and good liquidity.

In constructing GFS, the team examines how individual strategies interact with one another. This helps us build a portfolio that we believe will deliver positive returns in multiple economic scenarios and be resilient to market shocks.