Investment Approach

Investment Philosophy and Framework

Stocks trade in a range that tends to mean revert around an average or through the cycle relative PE multiple.

That the market places a greater emphasis on nearer term earnings estimates when pricing stocks (due to greater accuracy of near term estimates)

Opportunities to generate alpha from mean reversion around a relative PE and/or differentiated market earnings estimates

Research Approach

Dedicated research effort to ratify earnings, RMR and QAS

Internal models built for all investment grade stocks

External research used for understanding market expectations

Cross check with other valuation methodologies

Portfolio Construction

Bottom up with pre-set constraints at both stock and sector levels

Maximum overwieght position in most attractive stocks (subject to wisk management overlay and buy/sell disciplines)

Tracking error used to measure active risk