If you are planning a conference, team-building event, or away day, and looking for a way to bring your event to life – we can help. Our experiential simulations and activities, which can be tailored to your needs, will drive engagement, and turn passive sessions into fun and active experiences. Whatever the theme of your event, we will have a solution to meet your needs.
In our Targeted Return Simulation…
Participants are required to run a fund over a four-year horizon. The simulation is based on real market data and real investment returns with participants testing their investment skills against real market conditions. The period selected for the simulation exposes participants to interesting and challenging periods of investment history. At the conclusion of the simulation, participants are shown the market period over which they have run their fund. Their performance is compared against funds that operated at the same time. The simulation serves as a vehicle to allow participants to make investment decisions based on real market and economic data, but also provides insight into how markets behaved under certain market conditions and stresses.
The simulation explores:
Absolute return fund performance
The absolute return fund’s performance is measured in absolute return terms rather than against any specific reference benchmark. Participants manage the fund on a multi-strategy basis to try to deliver absolute positive return irrespective of movements in the bond markets. The strategies that can be employed in the fund build over the four investment periods.
Credit spectrum allocation
In the first round of the simulation, participants review market information and fixed income sector trends and make an asset allocation decision across the credit markets. The investment choice is between high yield credit assets and investment grade assets. Participants are provided with economic and market data to help them make their allocation decision.
Alpha capture strategy
The performance of each fund is reviewed after the first year. In the second-year, participants are introduced to an alpha capture strategy where they can choose to increase or reduce their exposure to riskier credit assets but remove broad market risk. Performance is again reviewed after the second year.
Macro-directional
In the third year of the simulation, participants add a further strategy to their fund which involves a macro-directional strategy in an overseas bond market giving both direct economic exposure to that economy and to its currency. Participants can choose to either long or short this economic exposure.
Pairs strategy
In the fourth year of the simulation, the final strategy is added to the fund. This is a credit spread strategy synthetically created in the CDS market. The strategy involves taking a position in a financial CDS index versus the general credit market. This replicates a pairs strategy with the participants expressing a view on financial institution credit versus the credit markets in general.
Performance review
The simulation ends with a review of the performance of each fund in terms of delivering to the investment objective – total positive return – and how that performance has been attributed. The actual investment period that the participants have invested in is then revealed to them with a commentary on why the credit markets behaved in the way that they did.