Investment Philosophy

All investment decisions require human judgement. Experienced people and portfolio management teams are essential for investment success.

Portfolio management is more than “picking stocks”. Quantitative models assist by systematically exploiting the mistakes other investors make and controlling risk to reduce the impact of ours.

Over long periods stronger returns can be delivered by emphasising certain characteristics in stocks.

We believe value, momentum and quality (VMQ) characteristics offer the best risk-return outcome and build portfolios to efficiently deliver strong, competitive returns through these factors.

It is important to keep researching what may provide a competitive advantage.


“Build Smarter Portfolios”

Broad market benchmarks are tough to beat. They reflect all available information and rapidly adjust to new. It’s a competitive industry and there are many smart people competing. Active managers most likely possess only small competitive advantages.

Some benchmarks are harder to beat than others since they contain higher exposures to certain characteristics associated with outperformance. These increasingly are available to investors as “low cost” options and are commonly known as “smart Beta” or Factor indices.

We like factor indices and believe investors should reference the index that best reflects their investment preference and measure the added value of their active managers relative to this approach. A value manager should aim to beat a value factor index and a growth manager should aim to beat a growth biased factor index.

However, ‘smart’ Beta alone makes dumb portfolios. They typically include all the stocks in the underlying investment universe regardless of their prospective risk adjusted returns and re-balance on a calendar cycle regardless of market opportunities. In no way are they optimal portfolios.

We actively ‘Build Smarter Portfolios’. This process captures the key risk attributes of our preferred smart beta index and adds alpha (additional return) through superior asset selection, portfolio construction and implementation.


Benefits to Clients

The API Capital investment process offers investors and clients a proven active approach to build efficient, risk-controlled portfolios. This approach provides superior implementation of any smart beta index as well as better results relative to other active strategies.

Our combination of stock selection skills with sophisticated portfolio construction and risk management provides the best way to capture factor risk premium with superior return outcomes.

Our asset allocation approach allows us to combine the major risk premium into an integrated model portfolio service.

We provide the flexibility of either investing with us as your manager or through our model portfolio service where you retain control of strategy implementation.

We offer performance at a competitive price with a high touch client service in the Asia Pacific region.


View the latest API Capital High Conviction Strategy Factsheet

View the latest API Capital Global Alpha Plus Factsheet

View the latest API Capital Asia Small Cap Alpha Plus Factsheet


Asset Allocation

We offer a combination of ‘timing’ models and asset class definitions to periodically recommend exposure adjustment to different asset classes. We monitor factor indices to provide equity style tilts and map private equity, or illiquid assets, to equivalent listed assets allowing us to offer a full asset allocation model combining Beta and Alpha.

If you wish to receive more information please contact Robert Swift or Karl Hunt.