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Welcome to Global Investment Analysis (GIA)
The most common concern of directors, trustees and management of investment funds, is not having
sufficient understanding of the risks in their portfolios. Unfortunately, conventional risk
analysis focuses on the market and operational aspects of risk, while ignoring the other major
component of 'investment risks', namely the risks and returns associated with manager skill.
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Manager skill can represent up to 1/3rd of the investment risk in a portfolio.
GIA provides a more complete analysis of investment risk by incorporating both market and manager derived
risks to provide investors with a more complete understanding of their investment portfolios.
GIA captures insights gained through extensive hands-on experience in senior trading, fiduciary
and advisory roles and provides a different perspective on portfolio risk and construction than
current traditional / mainstream offerings.
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GIA:
- Is fully consistent with "Modern" Portfolio Theory
- Analyses Investment Risk, not just market risk
- Logically takes into account active manager skill
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from a new perspective.
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The chart above plots the 10 year returns of Australia's largest superannuation funds to June 2013
against the volatility of those returns for the 5 year period to June 2013. (As volatility is quite stable,
this is a good approximation of the volatility over the full period.)
It demonstrates clearly that the actual risk / return trade-off achieved on the vast bulk of Australians'
superannuation investments runs counter to the outcome that would be expected from currently accepted portfolio theory.
(i.e. That higher returns are expected to be achieved by taking higher levels of risk.)
GIA explains why this result occurred in the past, and is likely to continue in the future.
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Who we are
John Peterson, the founder and chief executive of PRI, is a leading expert in institutional
investments, portfolio construction and risk management.
As a senior investment and risk management executive John has first-hand experience with the numerous
market and structural events that have occurred over the last 40 years, including deregulation
and re-regulation of financial markets, runaway inflation in the late '70s, the floating of the
Australian currency, October 1987, the property collapse in the early 1990s, the tech bubble, and the
Global Financial Crisis.
He has been a central player in the 'active-passive' debate, and was a founding member of
the Institute for Quantitative Research in Finance.
The GIA approach to risk analysis is founded on a deep technical and experience based knowledge of investments,
and a strong understanding of fiduciary obligations.
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