Asset classes

Global macro absolute return strategy driven by macro inputs and detailed scenario analysis, which aims to profit from short-term investment opportunities across asset classes and manage downside risk.

Investment strategy

Tactical asset allocation (TAA) is an investment strategy designed to profit from short-term investment opportunities (typically less than 12 months) across global asset classes. The Aviva Investors Absolute TAA Funds aim to provide positive absolute returns, regardless of whether markets are going up or down – with the ultimate aim of generating, long term capital appreciation.
The funds invest in a variety of asset classes, including equities, bonds, currencies, property and commodities, primarily through the use of derivatives such as futures contracts. The fund managers aim to benefit from mis-pricing of assets by adopting long positions in assets which are cheap, and short positions in overpriced assets. Investments will be selected by the Investment Manager with input from a team of specialist analysts and quantitative models.

Portfolio construction

Economic forecasting can identify exciting investment opportunities, but it is also a complex and challenging discipline. We therefore use our forecasts to create portfolios that are suitable for a range of economic scenarios, not just one. We draw on many different sources of data and use cutting-edge quantitative tools, but human judgement and experience are essential in developing investment ideas and building portfolios.

Portfolio applications

The funds can provide diversification for balanced portfolios or portfolios comprising other absolute return strategies. Their key aims are to:

• Increase portfolio returns or reduce portfolio risk
• Diversify asset exposures through near-zero correlations with major asset classes
• Diversify investment style exposures through
  a focus on short-term opportunities.