GAM Diversity Strategy is GAM's flagship, global multi-strategy fund of hedge funds strategy. This highly scalable, diversified strategy takes a globally balanced approach towards identifying managers and investment opportunities.
The systematic investment approach of GAM Diversity Strategy has led to strong risk-adjusted returns since its 1996 inception. GAM Diversity Strategy has achieved these returns with significantly lower volatility than direct equity market investments because of its ability to limit downside risk at times of market stress through allocation to non-correlated hedge fund strategies.
The GAM Diversity Strategy seeks to generate consistent absolute returns across various market environments with diversification of risk and low correlation to traditional asset classes such as equities and bonds. Specifically the strategy targets 9-13% net returns with 5-7% volatility, by investing across equity hedge (20-60%), trading (20-50%), and arbitrage (10-40%) strategies. Typically, equity long/short strategies do well in rising markets while protecting capital on the downside. Trading funds, which tend to participate in macro economic events and looks to play themes and trends across asset classes (FX, fixed income, commodities, and equities), are not so reliant on rising equity markets and traditionally do well in markets that trend, have exogenous events and a modest level of volatility. Arbitrage funds, which typically identify arbitrage opportunities across a range of strategies and financial instruments, including bank loans, convertibles, event driven strategies and relative value trades, generate generally low correlation to traditional bond and equity markets, and aim to provide investors with a combination of performance and low volatility.