Investment Management: Investment Philosophy
Every active position we take is justified by research and shown to add value to the investment outcome.
Our core philosophy is to deliver strong real returns for our clients while managing downside risk. As investment professionals our job is solely to beat the market. We believe that every active position we take should be justified by research and shown to add value to the investment outcome.
We deliver returns above passive options, for all asset classes.
In the US, over 80% of large cap funds underperform the S&P 500 index over 5 years. It comes as no surprise that the last decade has seen a massive proliferation of passive options to passive solutions. Our job as asset managers is to deliver returns above passive options (alpha), for all asset classes.
Alpha is a zero sum game. Every investor in the market summed together will always get the market return therefore in order for us to consistently gain alpha someone has to lose alpha. In markets that are driven by professional investors such as the US and Europe, this is very difficult. Yet in less developed markets within China the possibility is higher, though not necessarily easier. In China, with over 60 million retail investors who invest based on feelings and biases, the fund tries to take advantage of their mistakes, while hedging out all other risks relative to the benchmark.
As a quantitative house, we do research to identify factors and invest to benefit from them.
As a quantitative house, we do research to identify irrational biases and distortions, and we invest to benefit from them. We call these biases and distortions factors. We only use factors that has an economic or fundamental reason to exist and we use those that have proved to work in the past.
By consistently innovating, doing research and investing according to our research, we build alpha slowly and steadily. While most funds lag their passive benchmarks, we believe that by delivering alpha consistently, we will outperform our peers over time.