What?
A global equity strategy with variable market exposure, aiming to generate real returns over the long term.
Global Real Return
Global Real Return
Why?
We believe listed equities are the most attractive universe from which attractive real returns can be generated over the coming decade and more. Government bonds returns will disappoint and fail to provide reliable diversification within traditional multi-asset strategies. Private capital markets are in a bubble that should be avoided. Whilst we believe broad listed global equity market returns will be lower and more volatile than investors are used to, the universe of listed global equities is incredibly diverse. The key to extracting attractive absolute returns is to focus on specific investment themes and only accept market risk that is proportionate to expected returns at a given time, rather than be fully invested at all times. Navigating market and economic cycles will require agility.
How?
The strategy follows a 3-stage process:
Identify stocks with substantial absolute upside over a 3-5 year horizon. The investment universe spans all countries and industries, any size or factor exposure.
Set the range for market exposure driven by the expected absolute upside to stock ideas, conditioned with broader market valuation analysis and macro considerations.
Identify the themes expected to best explain how markets will relate to our highest conviction stock ideas on a 12-18 month view. Build a portfolio of 6-10 themes that achieves the highest expected return across multiple scenarios for the target level of market exposure. Hedge where appropriate to achieve objective.