Investment Beliefs

  • Most investors are risk averse and must be rewarded for taking on more risk.
  • Long term, asset mix is the main determinant of portfolio return and risk.
  • Diversification among sources of return and drivers of risk improves portfolio risk and return characteristics.
  • In the long run, risk-adjusted returns of various asset classes are expected to be in-line with each other.
  • The risk of each asset class is not constant over time. It may be prudent to adjust the asset mix or implement hedging strategies to maintain an acceptable risk level of the entire portfolio.
  • A long term investment horizon provides opportunities to earn higher expected risk premiums from illiquid assets.
  • Market timing through tactical asset allocation does not consistently add value or return.
  • Passive investment management should be utilized unless it can be demonstrated that, net of fees, active management can add value.
  • Investment constraints may reduce risk adjusted returns.
  • Strategic currency hedging at the portfolio level comes at a financial cost but can help mitigate short-term portfolio volatility from foreign currency-denominated investments.
  • The prudent use of derivatives, within clear limits, can improve portfolio returns and/or mitigate losses.
  • The prudent use of leverage, within clear limits, can help improve the portfolio risk/return profile.
  • Incorporating Environmental, Social and Governance (ESG) factors in the investment process and advocating good ESG practices is in the best interest of shareholders and can create value for our clients.