Why investors need to be prepared for greater volatility

Co-Chief Investment Officer Aaryn Nania in The Australian Friday 4 October

The Australian share market tumbled for two consecutive days on Wednesday and Thursday (October 2- 3), as investors wiped away $80bn.
Australia’s benchmark S&P/ASX 200 share index closed down 2.2 per cent at 6493 points on Thursday, amid fears of a global recession.

Commenting in The Australian, Co-Chief Investment Officer Aaryn Nania warns that investors should be prepared for greater volatility as leading global economies slow and central banks struggle to prevent developed nations from slipping into a recession.

“Looking at the bigger picture, the key tailwinds that have driven equity markets higher over decades past have largely run their course,” he said.

“Even without assuming that some of these may become headwinds, at a minimum, investors should be prepared for greater volatility going forward. Today is just a taste of this.”

In this current environment, investors can protect their capital and significantly improve the likelihood of success by constructing a portfolio of truly uncorrelated assets.

The Lucerne Composite Fund deploys a broad range of strategies to achieve consistently positive returns in all markets, including bear markets.
In August when the S&P/ASX 200 was down 3.1 per cent, each sub-strategy in the fund’s portfolio delivered positive returns, as did each share class.

The Liquid Strategy Share Class, linked to only one of the fund’s sub-strategies, performed particularly well with an 8.8 per cent return for the month. Lucerne recently took the decision to soft-close the high-performing strategy to preserve performance for investors.

If you have any questions or would like further information on the Lucerne Composite Fund, please email Aaryn Nania at Aaryn.Nania@lucernepartners.com or call +61 3 8560 1458.