Asset Allocation Approach

We build our discretionary portfolios by applying the best of the asset allocation models and practices carefully combining them together to create our own bespoke approach to optimal asset allocation.

Fusion Asset Allocation is built around a proprietary mix of two models: Behavioural Expected Utility and Budgeted Risk Parity.

Behavioural Expected Utility Model, based on Optimal Portfolio Theory, is close to the approach used by Barclays Wealth in its Global Asset Allocation.

Risk Parity Model is employed by firms like Bridgewater Associates and Goldman Sachs Asset Management. Budgeted Risk Parity introduces risk budgets to asset classes, which reflect typical returns and risk levels associated with various asset classes in prevailing market conditions.

At the second stage of the asset allocation process, we overlay the portfolios with protective strategies, which specifically address the risks of unrecoverable losses. This approach is similar to Offensive Risk Management pioneered by PIMCO, one of the largest fixed-income investment management firms.

Asset Selection

Fusion portfolios invest in a diversified selection of funds and other permitted investments that have a similarly diversified character.

The allocations of the portfolios are balanced between funds investing in growth assets, such as shares, to provide the potential for capital growth, and funds investing in defensive assets, such as fixed interest securities and cash. The Portfolio Protection component is included to diminish effects of market sell-offs on the portfolios.

Fusion Optima portfolios provide an alternative to actively managed solutions and include primarily liquid low-cost passive or quasi-passive, so-called smart-beta, exchange-traded products.

Fusion Active portfolios consist of a diversified selection of actively managed funds from the best product providers, with the additions of occasional tactical overlays, thematic investments and non-traditional asset classes.

When constructing portfolios, we are focused on delivering the best value, long-term returns and capital preservation for your clients, and are constantly assessing options for their investment potential, cost and risk.