API Investment Strategies
High Conviction Strategy (HCS)
HCS is a value-oriented active approach where we implement our quantitative stock selection model in conjunction with the team’s fundamental knowledge to pick a 25+ name portfolio. An active risk target of 4-5% pa means we expect periods of significant deviation from broad markets. We select and emphasise stocks with exceptional VMQ attributes:
- Value: stocks with lower expectations for their future cash flow growth and profitability
- Quality: stocks with sensible leverage, stable earnings growth and return on equity
- Momentum: price and earnings-related evidence of likely upturn
Global Alpha Plus Strategy (GAP)
GAP is a value-oriented strategy which captures the Beta(s) of the MSCI World Value Weighted index and enhances return through the VMQ superior stock selection process.
We more efficiently provide the value-oriented Beta characteristics through portfolio construction risk control together with a strong stock evaluation process that selects the stocks we expect to outperform over time. GQS holds between 150-200 names with an active risk target of less than 3% pa and rebalances to the benchmark on an ‘event’ basis.
Asia Small Cap Alpha Plus Strategy (ASAP)
ASAP is a value-oriented strategy that applies our VMQ stock ranking and portfolio construction process in a similar manner to the GAP strategy, with similar stock holding and active risk targets. ASAP provides the Beta characteristics of the MSCI All Country Asia Pacific ex Japan Small Cap Value index through robust portfolio construction risk control and return enhancement through the VMQ superior stock selection process.
Given the increasing role of government in Asia Pacific economies we believe that smaller companies are more dynamic and less likely to make decisions on capital allocation for political reasons.
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.