It’s been an awfully good time to be in the equity markets over the last few years, they’ve risen sharply and in a very smooth manner. However, they’ve left valuations pretty extended and investors when they look around at other options that they have, perhaps in the fixed-income markets, are left with a bit of a dilemma. Yields are low and the prospect of rising rates means that bond prices themselves might come under pressure. And the equity risk premium, the gap that you’re paid the additional amount to own equities, is actually pretty elevated.

So I know I need the asset class, but I’m afraid that the downturn, which we know is inevitable at some point, will come and I’m afraid of that. So what can I do about that? Well, we’ve been talking to investors increasingly about focusing not just on the level of performance, but on the pattern of performance you can have.

And we’ve been using a concept called upside/downside capture to get there. This measures how much you participate when the markets are rising versus how much you participate when markets are falling. So imagine, an approach that allowed you to get 90% of the market when it was rising, but only 70% of the market when it’s falling.