Our Investment Approach
INDEXATION Our systematic approach is successfully applied to our range of indexation solutions to reduce tracking errors and benchmark return differentials. In constructing our portfolios, we aim to fully replicate the benchmark index. Where appropriate, we optimise for efficiency purposes to minimise the tracking error and return differentials relative to the benchmark index. Our process has proven to work across vanilla and emerging, less liquid and complex markets.
ABSOLUTE RETURN These solutions target specific levels of capital preservation to ensure clients do not suffer significant losses during turbulent market periods, while also providing consistent, above-inflation returns. This is achieved through strategic asset allocation across local and global asset classes and by employing risk management strategies that make use of dynamic hedging and derivatives.
ACTIVE EQUITY AND SHARIAH Our objective, quantitative processes give us insight into the themes driving market returns, help remove behavioural biases and ultimately produce returns with lower levels of correlation compared with traditional fundamental approaches. These portfolios aim to generate alpha through either dynamically adapting to changing market drivers or maintaining consistent exposure (bias) to sources of excess return. Our Shari’ah solutions leverage off this investment approach, while maintaining compliance to Islamic investment principles and appropriately managing inadmissible income.
Indexation. Our indexation solutions aim to deliver returns in line with the benchmark and at a much lower cost than traditional active portfolios.
Absolute Return. These solutions aim to ensure investors do not suffer significant losses during turbulent market periods, while also providing consistent, above-inflation returns.
Active Equity. These actively managed solutions use an objective and a quantitative process to generate outperformance.
Shari’ah. These actively managed solutions adhere to Islamic investment principles and use an objective and a quantitative process to generate outperformance.
Our Competitive Edge
Perfect blend of human judgement and technology. We use proprietary quantitative models to analyse masses of financial and economic data. These tools help identify investment opportunities and protect from emotional biases. To implement our investment views using these models requires highly skilled and experienced professionals.
Risk management. Reducing volatility is a deliberate and an explicit part of our investment process. We construct portfolios to have the optimal level of risk for the desired return outcomes.
ESG integration. Environmental, social and governance considerations are included in our investment processes in a manner applicable to each fund’s mandate. Our funds all benefit from active ownership, which includes proxy voting and engaging with management to proactively drive change and long-term sustainable outcomes. We are also the first South African manager to launch a number of ESG index funds.
Stable, long-term track record. We have been successfully implementing bespoke hedging solutions for our clients for over 18 years. We are also one of South Africa’s largest index managers and have niche expertise in tracking less liquid, complex and emerging markets.
Derivative usage. Our size and stature in the South African derivatives market, coupled with our long-standing relationships with key banks and brokers, gives us a considerable advantage and ensures we get the best pricing from counterparties.