Our Investment Philosophy
Our investment philosophy centres on four guiding principles:
1) Get the big decisions right. Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio’s assets according to investment goals, risk tolerance and investment horizon. We believe this is the most important decision we make, and it should be actively managed.
2) Take risk only when risk is likely to be well rewarded. We believe valuation is the key driver of long-term returns. When assets are expensive, risk is not well rewarded; when assets are cheap, it is.
3) Avoid large losses. We construct portfolios which seek to withstand a continuously changing market environment.
4) Invest responsibly. Look after tomorrow’s world today. We aim to improve investment performance by investing in companies with strong environmental, social and governance credentials. Across our direct security investment portfolios, we limit exposure to key controversial sectors such as: adult entertainment, controversial weapons, gambling, tobacco, and thermal coal. We also exclude companies involved in very severe controversies as defined by Morgan Stanley Capital International (MSCI).
Our investment process
We have designed a VaMoS framework to put our investment philosophy into practice and build portfolios. Organised around four core pillars, we use this framework to guide our decisions as we identify and select investments from a wide range of asset classes including cash, equities, bonds, commodities and alternative strategies.
Economic scenario
Consider expectations for investment returns as market conditions change.
Valuation
Favour assets with good fundamentals that are cheap and avoid those that are expensive
Momentum
Acknowledge and exploit market behaviour by buying assets that are rising in value and avoiding/selling those that are falling.
Sentiment
Buy assets when investors are pessimistic and reduce exposure when investors are optimistic.
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