How we think
How we think
We are active investors. We focus on where we can make a real difference for our clients—to help them achieve their long-term investment goals.
Mar 15, 2021
Institutional investors, particularly pension funds, have shown increasing interest in low volatility strategies, given their dual priorities of smoothing returns and mitigating drawdowns. However, such strategies failed to deliver as designed when turbulence returned to the markets in 2020, continuing their disappointing trend in recent years, a period marked by several bouts of volatility.
We believe investors would benefit from exploring complementary fundamentally-based strategies that maintain a similar, but broader, three-pronged value proposition: lower than market volatility, downside protection and, critically, excess returns over a full market cycle. Ninety One's Global Franchise strategy has historically achieved this return pattern by investing in a focused portfolio of resilient, best-of-breed companies that maintain a combination of both high returns and low leverage.
Diversification is also a critical consideration. Fundamentally-oriented Global Franchise largely focuses on a different set of stock selection criteria, lowering its correlation to quantitative strategies and increasing overall portfolio diversification.Read the article