A core holding that seeks to deliver strong risk-adjusted returns across market cycles

Oppenheimer Global Allocation Fund is a core holding that is designed to enhance a client’s asset allocation in response to changing dynamics in global markets. The Fund seeks to achieve attractive total returns without taking undue risk and has the potential to enhance the risk-adjusted returns of a traditional portfolio.

The Fund seeks to provide flexibility for the core of investment portfolios

The Fund seeks to achieve its goal of providing attractive risk-adjusted returns by actively shifting its allocations across various asset classes. Its small size and flexible mandate allows it to make meaningful shifts to its allocation over time.

The Fund acts on investment theses by making dynamic adjustments to the portfolio

  • Mitigating downside risk: In late 2015, the team believed that a rate hike of 25 basis points would exacerbate current macro uncertainties and trigger severe market volatility. In December of that year, it decreased the Fund’s risk posture by shifting to an underweight in equities and an overweight in duration via long-dated U.S. Treasuries. The Fund benefitted when global equities declined sharply in early 2016 and 30-Year Treasuries appreciated by 11% through 2/11/16.1
  • Active currency management: In early 2016, the team believed the British pound (GBP) would experience significant volatility as a result of the UK’s referendum to exit or remain in the European Union. From January 2016 to May 2016, it gradually moved to a short position in the pound of -4%, relative to the benchmark. After the UK voted to leave the European Union, the pound declined to a 30-year low. The Fund’s short exposure to the pound, along with other currency hedges, contributed 57 basis points of relative performance year-to-date through 6/30/16.2

The Fund employs a diverse and experienced team with global perspectives

Mark Hamilton serves as CIO Asset Allocation and Alternatives, and Portfolio Manager. He is also Head of the Global Multi-Asset Group (GMAG). As lead portfolio manager of the Global Allocation Fund, Mark is supported by three co-portfolio managers and eight dedicated analysts. GMAG’s unique approach to managing portfolios is deeply rooted in the belief that using multiple independent perspectives on markets within a structured decision-making process can deliver better outcomes for investors. The team has four portfolio managers, eight analysts, and two client portfolio managers. The team members collectively speak a total of 15 languages, have seven MBAs, six CFAs and three PhDs.

The Fund leverages two sources of active management

GMAG is a boutique team with 14 investment professionals that provides a top-down source of macro, risk and valuation expertise to the Global Allocation Fund. The Fund is also supported with bottom-up analysis provided by: five boutique equity teams with a total of 83 investment professionals, six boutique fixed income teams with 69 investment professionals and four boutique alternative teams with 20 investment professionals.

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1 Source: FactSet, 2/11/16. World stocks are represented by the MSCI AC World Index. The MSCI AC World Index is a free float-adjusted market-capitalization-weighted index that is designed to measure the equity market performance of developed and emerging markets. Duration is a measure of the sensitivity of the price (the value of principal) of a fixed income investment to a change in interest rates, expressed as a number of years.

2 Source: Bloomberg, 6/30/16.