It has largely delivered on its promises, recording a positive return every calendar year since inception and significantly outperforming its sector and Libor GBP 6m index benchmark in the process.
Performance of fund vs sector and index since launch
Source: FE Analytics
But what do investors actually know about Standard Life GARS?
In speaking to numerous IFAs, it is clear many industry professionals are unsure about how its process works, which would suggest their clients and other private investors also have some gaps that need filling in.
FE Research analyst Charles Younes (pictured) says the fund is not as complicated as many people think."A lot of investors get bogged down in the 30-odd strategies that it uses, but it’s far easier to think of the fund in terms of its team approach," he said.
"All of the decisions in GARS are made using three teams. The first team is the economists, whose role is to analyse macro data and identify short and long-term trends."
"They have experts across all the different asset classes."
"When a trend is identified, they pass it onto the implementation team, who try and find the way to play the theme on an absolute and risk-adjusted return basis."
"If the macro team are positive on US equities, they will look into long positions on an index, or perhaps a market-neutral position between US equities and European equities."
"This idea then goes onto the risk-team – perhaps the most important of the three. Their job is to make sure the play on the theme doesn’t distort risk levels elsewhere in the portfolio."
"They provide insight both before and after the implementation process."
"GARS is all about balance, which is where these guys come in. They make sure all of the plays complement each other, and that there isn’t too much risk in one area."
"If there is a certain amount in equities, this would be flagged up by the risk team."
The fund’s strategy is split into three: relative value, directional, and market returns.
The relative value plays refer to market-neutral positions, when the fund is positive on a certain market, but hedges this risk by going short on another.
For example, the fund currently has a US equity large cap vs small cap position, which means that the only return it will make is the difference in returns between the large and small cap market.
Directional plays refer to relative value positions that are slightly skewed in one direction, because the manager has a higher conviction in one of these markets.
For example, the fund currently has a directional US dollar vs euro play, which means that its long position in the dollar is slightly more than its short on the euro.
Market returns are simply long positions on set markets. For example, the fund is currently long Russian and Korean equities.
In many ways these processes make GARS a quasi-hedge fund, but Younes says it is more simplistic in its approach.
"It is more conventional at heart than a hedge fund and seeks to derive much of its returns through dynamic asset allocation, much like a large pension fund might do," he explained.
"Furthermore, the team has a dedicated approach to risk management, which has helped the fund to protect investors’ money very effectively."
Younes says the fund would always make these long plays through an index tracker or ETF rather than a single company, to ensure there is no single-stock risk in the portfolio.
GARS also holds cash, which currently makes up around 40 per cent of the portfolio.
The economist team is headed up by Andrew Milligan, the implementation team by Guy Stern, while Dr Brian Fleming runs the risk team.
The three teams are overseen by Euan Munro, director of multi-asset investing and fixed income at Standard Life.
"These four are the guys running the show," Younes continued. "The individuals within the team are of course very important, but I’d only be concerned as an investor if one of these four left."
Three multi-asset specialists left GARS for Invesco Perpetual in September this year, which Younes says investors should not worry too much about.
Standard Life Global Absolute Return Strategies has a minimum investment of £500 and a total expense ratio (TER) of 1.59 per cent. It is available through all the major platforms.
It has five FE crowns, is a constituent of the AFI Cautious and Balanced portfolios, and is on the FE Select 100 list.
If you have any more questions about Standard Life GARS, please submit a question in the comments section below, or email the team at editorial@financialexpress.net