Investment Objective

Investing in equity markets over a long time horizon has been shown to be one of the best ways to achieve increased wealth. TGM’s Low Volatility Equities strategy provides equity like returns with lower volatility and reduced drawdowns when compared to traditional equity market investments.

S&P/ASX200 Index TGM Low Volatility Strategy
Annualised Return 8.27% 7.34%
Annualised Volatility 13.48% 5.76%
Return/Risk Ratio 0.61 1.27
Max Drawdown -50.58% -13.12%

Investment Strategy

TGM’s Low Volatility Equities strategy can be successfully applied to the investors underlying equity holdings as an overlay, or alternatively, TGM can combine the overlay with an underlying specified Exchange Traded Funds (ETF) exposure.  This provides the investor with equity market exposure and, in the case of Australian equities, the ability to receive franking credits.  In order to reduce the strategy’s volatility, TGM has developed proprietary downside protection and valuation models, which allow TGM to reduce the strategy’s exposure to equity markets and increase it to defensive assets.  The neutral position is to be fully invested in equities.   TGM actively manages the exposure to equities via the use of exchange traded equity and bond futures contracts and cash. This results in a strategy that provides equity like returns with significantly lower volatility and drawdowns relative to traditional equity market investments.

S&P/ASX200 Index TGM Low Volatility Equities Strategy1
Annualised Return Annualised Volatility Return/Risk Ratio Annualised Return Annualised Volatility Return/Risk Ratio
1 year 10.64% 11.18% 0.95 6.32% 3.97% 1.60
3 years 9.32% 13.50% 0.69 3.44% 4.54% 0.76
5 years 8.61% 16.38% 0.53 4.38% 5.44% 0.80
10 years 7.96% 13.97% 0.57 4.98% 5.75% 0.87
Inception2 8.27% 13.48% 0.61 7.34% 5.76% 1.27

For further information on the versatility of the TGM Low Volatility strategy and how it can sit within your portfolio please contact us here at TGM.

 Note that the performance numbers are based on out-of-sample backtests of TGM’s investment process. Results are net of transaction costs but gross of management fees.  

1 Strategy example is based on the S&P/ASX200 Index  as the underlying physical investment.  

2 Return numbers are for the period April 2002 to February 2024.


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