Global Blend
Investment objective
A 50:50 blend of Value and Quality seeks to produce a long run return of +3% per annum (gross of fees) above the MSCI World Index (net dividends reinvested).**
Key features
- Allocation to outperforming complementary styles - Although Value has historically generated higher returns over time, it exhibits higher volatility and can suffer during cyclical downswings. The other side of Value is often mislabeled as "Growth" but a more complementary strategy is actually Quality. This strategy can be distinguished from traditional "Growth" by the avoidance of over-hyped glamour stocks, which are susceptible to underperformance. Quality companies are characterized by being profitable and financially strong with relatively stable businesses.
- High return without concentrated stock risk - Seeking higher returns can be associated with greater risk as this is often achieved through a very concentrated stock portfolio. We reduce stock risk by building a diversified portfolio but with high conviction. Diversification allows us to spread the stock risk but capture high returns by investing in over 500 stocks which, combined together, still produce high returns.
- Stock weights determined by fundamentals, not market cap - In market cap weighted indices, the very largest, so called 'mega cap' stocks crowd out other investment opportunities as too much of the portfolio gets allocated to them by virtue of their size. In some respects, very large company size reflects past success or can be a naive extrapolation of future prospects. over allocation to past success creates an inefficiency in the index, with momentum-like characteristics. Our approach is to weight stocks based upon their fundamentals and liquidity. This is more balanced and reduces the problem of the 'mega-cap' drag which is particularly acute for other value investors.
- Bottom-up index unconstrained investing maximizes the opportunity - Our approach maximizes the potential return opportunity by systematically analyzing over15,000 global stocks every day; many of these stocks are outside mainstream indices. The more attractively-ranked stocks we find in a particular region or sector, the greater the allocation.
Investment options
- Separate accounts*