We believe that global capital markets are largely effective in allocating capital and generally ensure a stable relationship between risk and return over time. As a result of this risk/return relationship, a range of systematic long-term returns can be expected in the form of various risk premia.
Successful investing therefore includes exposure to these various sources of risk and return over the long-term.
We believe that there are targeted opportunities to add value through active management.
These opportunities arise because:
We define investment risk as the possibility of a permanent loss of economic capital – the purchasing power of money.
We believe that investors experience this risk in two ways: the probability of loss, as well as the variance of returns. We manage both of these risk dimensions by: