In this update we will put look at the performance of our Diversified Alpha strategy from a historical perspective, provide some guidance to long-term performance expectations, and highlight some important events that took place in the six months since inception.
2015 was challenging for our stock selection process. In particular, two segments, North American energy and what we consider to be speculative growth retail stocks, account for the majority of the losses experienced in the portfolio.
The strategy experienced strong macro-driven headwinds through much of the first half of 2015. Driving performance were two related issues we see as the two sides of the same coin.
We believe maintaining well-diversified exposures to multiple return signals is key to generating consistent returns through stock selection.
Our GLMN strategy’s tightly controlled risk management framework, which seeks to maintain a balanced exposure to sources of risk and return, and broad regional and sector diversification were equally important to achieving 2014 performance.