Dominik Graf Fund is the Hedge Fund division of Dominik Graf Alternative Investments. Dominik Graf .I.D.A.M (Dominik Graf Investment Discipline Asset Management) is our investment management arm whose focus is the mitigation of risk in the construction of any given portfolio.
With this task in mind the team formulates strategies that generate revenues around a pre-determined risk budget. This is referred to as strategic risk allocation (S.R.A.) and is distinct from our strategic asset allocation (S.A.A.) approach to the construction of portfolios.
S.R.A. dictates the type of instructions that are given to our fund managers while remaining not too far from a traditional S.A.A. instruction. What separates then is the way it is weighted towards volatility centred risk allocation versus setting target allocations across the various asset classes.
It goes without saying that all clients want the best possible returns while remaining as far removed from risk as possible. This is why each S.R.A. portfolio has precise volatility limits which are set alongside their respective return targets.
The performance of these strategies is driven by the following factors;
These depend upon the strategy, with the fund manager having the ability to shift exposure negatively/positively, depending on the macro economic climate.
Risk Centred Approach
The philosophy behind S.R.A. is risk (volatility) focused versus diversification over specific asset classes as the primary driver of returns.
The enhanced diversification of risk allows the fund to produce increased returns for the corresponding risk of alternative strategies. i.e. advanced information ratio.
It is important to note how Dominik Graf define risk. Within the context of S.R.A. it is the volatility of returns. Individual investments may have expected equal returns, 12.5% per year for example. In our experience investors lean towards investments that possess the diminished volatility in the succession of returns during any given period. It is always advisable to bear in mind that there are other risks that are inherent to investing.