Our investment process is focused on the active management of tracker funds. We transform the passive into the active.

Risk Control

We control risk and volatility through a dynamic combination of asset allocation, market monitoring and tactical trading.

Our first layer of risk management, similar to other investment managers, is provided by diversification through asset allocation. A global balance of investments across differing asset classes and through uncorrelated assets is a primary driver of portfolio returns and diversified security. Diversification is well known to reduce volatility.

A trend-following overlay for our equity assets in our Guardian portfolios provides our second layer of risk management. Trend-following strategies have been shown to reduce volatility and maximum drawdowns. Through market monitoring and tactical trading, our portfolios are designed to make the most of global equity rallies and seek to avoid the worst of any subsequent falls. The aim of our proactive management is to provide consistent long-term returns with reduced downside risk.

Backtesting

Crossing Point’s trend-following strategy for portfolio management is a relatively new process. Therefore, it has to be retrospectively back tested. Our investment process follows a strict rules-based system.

We show what would have happened back to 1996 using Crossing Point’s strategy on market indexes trading into both cash and a UK All Stock gilt index when not invested into equities. We have managed live money from October 2017 further allowing us to refine our processes.

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How did the Guardian Portfolios perform during the 2020 coronavirus crisis?

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Decumulation Strategy

The predicament faced by income seeking investors is downside sequence of returns risk and the potential impact this has on future capital values and income withdrawals.

A very real danger to long-term income investors is the potential damaging impact of early falls in a pension fund value causing a reduction in long-term capital values, also known as sequence of returns risk. This impact is magnified when income withdrawals are needed creating a ‘double’ fall in values. Research into sequencing risk shows that an early fall in an investment creates a long-term impact on capital values which can affect the long-term viability of income withdrawals. Also, during decumulation, the process of selling the underlying assets for income when the market is falling has a greater impact on the reduction of the underlying capital.

The Crossing Point Guardian portfolios seek to minimise sequence of returns risk, volatility and maximum drawdowns by smoothing long-term returns through the combined use of asset allocation and trend-following tactical trading. This double layer of volatility control allows financial advisers to plan ahead with greater accuracy over future returns.

Crossing Point Guardian strategies are designed to protect capital values of income paying portfolios allowing retired investors to take an income from a portfolio with greater confidence.

Discover today how Crossing Point's range of portfolios can provide your clients with strong, consistent risk-controlled returns.

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