Nobody likes change

We like the idea of change. What we dislike is the uncertainty it creates. Faced with that uncertainty, we naturally anchor to what we know and extrapolate what we have already observed. This is understandable. Experience is one of the few guides we have to an unknowable future. But it can also become a trap. A rear-view mirror is useful until the road bends.

My father-in-law is a cattle farmer in South Africa. Among the animals he farms are Charbray cattle, a breed created by combining Charolais and Brahman cattle. Charolais bring size and growth. Brahmans bring resilience and an ability to thrive in difficult conditions. Farmers did not create Charbray because they wanted something different. They did it because they wanted to preserve the best characteristics of each breed while producing an animal better suited to the environment ahead.

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Risk warnings

Investment Risk: The value of investments and any income from them may go down as well as up and is not guaranteed. Investors may not get back the amount invested.

EPM Techniques: The Strategy may engage in EPM techniques including holdings of derivative instruments. Whilst intended to reduce risk, the use of these instruments may expose the Strategy to increased price volatility.

Exchange Rate Risk: Investing in assets denominated in a currency other than the base currency of the Strategy means the value of the investment can be affected by changes in exchange rates.

Liquidity Risk: In difficult market conditions the value of certain strategies may be difficult to value and harder to sell, or sell at a fair price, resulting in unpredictable falls in the value of your holding.

Emerging Markets Risk: Investing in Emerging Markets may provide the potential for greater rewards but carries greater risk due to the possibility of high volatility, low liquidity, currency fluctuations, the adverse effect of social, political and economic instability, weak supervisory structures and accounting standards.

Counterparty Risk: The insolvency of any institutions providing services such as safekeeping of assets or acting as counterparty to derivatives or other instruments, may expose the Strategy to financial loss.

Concentration risk: The price of strategies that invest in a reduced number of holdings, sectors, or geographical areas may be more heavily affected by events that influence the stockmarket and therefore more volatile.