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 How we invest

Usually, we invest in each asset class via an established OEIC or unit trust where the focus is firmly on one of our eight preferred asset classes. If we cannot find an equity fund that fully satisfies our requirements, we are allowed to invest directly in that particular asset class.

Apollo’s portfolio construction and management comprises a four-stage process:

Asset Class Blending

The eight asset classes we invest in all have different degrees of correlation. Our primary aim is to maintain the optimal balance between each asset class so that volatility and risk are limited and the potential returns are maximised

Investment Cycle Tilting

This is the process of increasing or decreasing the proportion of capital invested in each asset class as conditions change. Our proprietary tools constantly test various investment scenarios, examining the probable affects of movements in one or more asset classes on others, and the affect those movements would have on the fund’s portfolio as a whole. Examples of tilting would be placing greater emphasis on equities as economies emerge from recession or shifting the focus to bonds when moving toward, or in, recession.

Fund Selection

Funds are chosen using a blend of science, experience and talent. We also have privileged access to OBSR research – one of the investment industry’s leading and independent fund analysis firms. Through a combination of quantitative research techniques and face to face interviews with fund managers we select funds which meet our four key criteria:

– Is the fund’s asset allocation correct?
– Are the funds readily available for investment and disposable?
– Is the performance vs risk profile in line with our expectations?
– Do the fund managers have a proven track record?

Implementation

As market timing can affect returns, we use a range of indicators to help predict where changes may occur. By analysing volatility and volume within the derivatives markets, monitoring currencies and tracking hedge fund and other fund management activities, we can spot early signs of stock and market movements. That information helps us to determine the optimal time to buy or sell assets for the funds