HEAD-TO-HEAD: Aviva vs GAM

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The Aviva fund is run essentially by a two-person team, David Clott and Shawn Mato. Both have managed this fund for the bulk of their 10-year tenure at Aviva. (Since 2015, the portfolio is sub-advised by Westwood Holding Group, which the two joined in 2014.) They are supported by two analysts.

“The two people are responsible for idea generation, portfolio management and risk management,” Douali said. “It is a very concentrated team, with a lot of responsibility on these two’s shoulders,” he added, noting that this setup makes it essentially a hedge fund within Aviva.

The team screens the universe of 1,500 convertible bonds using quantitative, fundamental and technical methods, and forecasts the expected return for a range of movements in market variables.

The portfolio is hedged to reduce residual risks, using a range of credit, foreign exchange and interest rate derivatives. The managers hedge away the currency risk, while credit and equity risk are managed more opportunistically, to reflect the managers’ views.

The GAM team is larger and structured on a more “institutional” basis. The two lead managers, Tim Haywood and Daniel Sheard are supported by a team of 30 portfolio managers, analysts, traders and product specialists.

“While Haywood is the ultimate PM, he has more senior people who report to him, so it’s a more filtered process in terms of portfolio construction,” Douali said.

The team consists of specialists in rates, investment grade credit, high yield credit, convertible bonds and foreign exchange. All team members are responsible for generating investment ideas, as well as research and fund management.

“The themes are prioritised by the two portfolio managers, based on their conviction and the possibility of capturing market opportunities via dynamic asset allocation,” Douali said. “The portfolio is invested in assets classes with different market directions, and exposure is increased or hedged using derivatives.”

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