We fervently believe that investment research should emanate from one’s own in-house capability. A problem, we believe, is that most investment firms acquire their third-party research from the same source often resulting in a “sameness” approach across managers. Whilst we do not strive to be different, we have found that we often hold a different view to many fund managers because we conduct our own independent research.
We believe that to conduct a robust in-depth analysis of investment markets, one should include both fundamental and technical analysis and incorporate a core quantitative component which will help minimise subjective, emotional decisions that can often damage returns.
We believe that investment markets are in constant flux and there is constant rotation in and out of favour between the various market regions and sectors. Our proprietary system is always tracking relative strength between assets and will alert us to potential risk and opportunities.
We believe that market timing should be utilised as part of risk management. Rather than adopting a hold and hope approach, we believe that long-term returns can be improved by actively managing systemic risk, i.e. lowering risk when the market is displaying signs of ongoing weakness. To this end we have developed our own range of proprietary investment analysis tools. These include for example our Market Timing Charts, Risk Barometers, and Market Sentiment Indicators.
It follows that portfolios should be constantly monitored to make sure that they reflect our current assessment of appropriate risk and opportunity.
In recent years, particularly following the Brexit vote, we have found it important that currency risk should be considered and we actively seek to hedge our currency exposure when we deem it necessary to do so.