The Global Balanced strategy represents the best ideas of the PH&N Asset Mix Committee (AMC), which is responsible for managing our suite of balanced investment strategies and setting the asset mix allocation for each strategy. The Global Balanced Strategy embodies our core approach to multi-asset investing and leverages many of RBC Global Asset Management’s (RBC GAM) fundamental capabilities across multiple asset classes.
The Global Balanced Strategy is designed using a conservative core strategy, diversified across asset classes and geographic regions. It is ideal for investors seeking simplicity of implementation from an asset manager with expertise in asset allocation.
Strategy overview
- Aims to deliver long-term value added results
- Diversified exposure to leading investment strategies managed by RBC GAM
- Broad global investment universe across fixed income, equities, and private markets
- Strategy mix is actively managed to take advantage of opportunities and manage risk
- Benchmark: 1% FTSE Canada 30 Day TBill Index, 36% FTSE Canada Universe Bond Index, 3% Canada CPI (Non-Seasonally Adjusted) 1-month lag + 400 bps, 20% S&P/TSX Capped Composite Total Return Index, 36% MSCI World Total Return Net Index (CAD), 4% MSCI Emerging Markets Total Return Net Index.
Our approach
Investment philosophy and style
The AMC’s guiding philosophy for managing balanced mandates is founded on three principles:
- Investments in high-quality common equities represent the best vehicle for creating wealth over the long term.
- Wealth preservation and income objectives are best met by balancing common equity and fixed income investments.
- The cyclical nature of markets requires the timely adjustment of the mix of equity and fixed income investments to achieve superior investment returns.
Portfolio construction
The Global Balanced Strategy invests in a well-diversified portfolio of domestic equities and fixed income, as well as global and high yield bonds, global and emerging market equities, and real estate.
The AMC is responsible for developing the strategic and tactical asset mix for our balanced strategies, and makes all of the investment decisions. Notably, the AMC does not engage in aggressive asset mix shifts in an attempt to time the market. Instead, they prefer to keep their portfolios fully invested with a long-term bias to equities. The AMC will, at times, alter the asset mix to reflect their view regarding the expected relative performance of fixed income versus equities over the next six to 18 months, but these moves tend to be kept within +/- 5% of the long-term asset mix targets. They are also disciplined about rebalancing portfolios back to their target weightings when market moves have brought them out of line.
Security selection within the underlying strategies of the Global Balanced Strategy is the responsibility of the individual specialized investment teams.
In managing fixed income assets, RBC GAM’s fixed income teams believe a multiple strategy approach is more effective than focusing on any single strategy. Just as diversification of securities is beneficial for a portfolio, they believe that diversification of strategies further improves the risk/return trade-off for a fixed income portfolio.
RBC GAM’s equity investment style is also characterized by a high degree of diversification and a discerning stock selection process, backed by in-depth research and analysis. In all regions, RBC GAM’s equity investment style focuses on high-quality, growing companies that are attractively priced.