All of our portfolios employ risk reduction tools such as trend-following strategies and dynamic currency hedging. In addition, we regularly assess the current asset mix of our portfolios, and from time to time make allocation adjustments to optimize their risk-return characteristics.
We hedge the U.S. dollar exposure in our portfolios as it is typically the most significant currency risk. Our portfolio management team monitors the movement of the U.S. dollar carefully and actively adjusts how much of your portfolio is hedged. The goal is to minimize any losses due to currency risk in your portfolio. If the Canadian dollar shows signs of getting stronger, we may add a hedge. Conversely, as the Canadian dollar weakens, the hedge is reduced or removed so you can enjoy the benefit of an increase in the value of your U.S. dollar investments.
LINK: Find out about our current currency hedge position.
Our portfolios employ unique quantitative risk reduction models such as Global Trend Strategy and Global Defensive Equity. These strategies are designed to reduce exposure to potentially riskier elements in the portfolios during times of market stress. They do this by moving in and out of equity positions based on quantitative market trend signals; as market signals change, these strategies will move from fully invested to partially invested and vice-versa.
LINK: Find out about the current market signals
As part of our portfolio monitoring and active management process, we regularly assess the current asset mix of our portfolios, and from time to time make allocation adjustments with the aim to potentially improve returns compared to other investments with similar risk.
LINK: Find out about our latest portfolio reallocation