The Durable Portfolio Construction® approach in the honor
With its theme of “Durable Portfolio Construction® - how to build a durable portfolio in an uncertain environment” Natixis Global Asset Management’s October 16 workshop brought together nearly 230 participants.
"Durable Portfolio Construction® is an investment philosophy that prioritizes finding the right strategies to navigate through complex markets, while paving the way toward long-term goals”, explained Pascal Voisin, CEO of Natixis AM, opening the workshop.
Challenges to self-sustaining growth in the eurozone
There have been some positive signals from the eurozone and behavior patterns are shifting. However, the global economy is failing to pick up speed.
There is a long drawn-out adjustment under way and it won’t be finished in the short term even if growth does return. The adjustment will still require further progress on building eurozone institutions and a major revival in capital spending, capital spending that will expand Europe’s capacity to produce innovative and high-quality products and so help boost employment.
Although the behavioral changes have gathered pace, overly restrictive fiscal policy since 2011 has taken a heavy toll. The recent trend change reflects the now stronger emphasis on growth. If this goal is to be reached, however, monetary policy must also remain accommodative.
Meeting the challenges of today’s markets
Investors are looking for investment solutions that meet their needs rather than a standardized range of investment products;
This is because:
- investors are facing unprecedented challenges: low interest rates, high correlations, shortened investment horizons.
- the financial health and independence of a whole generation is at stake.
- clients need real solutions, not just products – a risk-based approach that meets the challenges of today’s markets.
It is to face these challenges and help investors achieve their long-term goals, that Natixis Global Asset Management has designed Durable Portfolio Construction®, an approach that aims to build portfolios able to resist and adapt to unpredictable changes in market conditions.
The Durable Portfolio Construction® approach is based on five principles:
- 1. Put risk management first
Use risk parameters as the primary input for asset allocation to manage volatility and create portfolios capable of minimizing the impact of extreme market movements
- 2. Maximize diversification
Consider the broadest possible range of asset classes and investment strategies when creating portfolios
- 3. Use alternative investment strategies
Take advantage of alternative strategies and asset classes to lower correlations, temper volatility and pursue new sources of return
- 4. Make smarter use of traditional asset classes
Seek new and efficient ways to capitalize on the long-term potential of stocks and bonds
- 5. Be consistent
Maintain a consistent portfolio construction process and stay focused on the big picture, regardless of short-term changes in market conditions