Mar 15, 2021
Markets have had a choppy year, encouraging investors to seek lower volatility strategies that offer protection during down markets and smooth returns over a cycle. Yet, such strategies have not performed as desired, lagging the market significantly this year, as they have for much of the past decade.
We believe institutional investors would benefit from exploring strategies that offer attractive returns while maintaining a low level of volatility by selecting best-in-class businesses that sustain high returns, low leverage and compound shareholder wealth over the long term. Such an approach can also offer exposure to key long-term growth themes; Ninety One’s success at identifying these opportunities can be evidenced by the Global Franchise strategy’s long-term outperformance of the broader market and low volatility alternatives.
Defensive alpha is a key attribute of the Strategy, with its performance during the biggest equity drawdowns outperforming not only the wider market, but often the median global low volatility managers as well. This fundamentally-based, high-conviction equity portfolio – which is not a dedicated low volatility approach – can act as a complement to quantitative low volatility strategies, providing institutional investors with excess returns, lower risk and a smoother journey through a cycle.Read the article