- While asset allocation is widely accepted as the most important step in portfolio construction, most asset managers devote little time or resources to research in this area. The volatility in equity markets in recent years has exposed the inadequacies of traditional balanced portfolios. RMB Asset Management has a bespoke, differentiated approach to strategic asset allocation and provides solutions that increase the predictability of returns and reduce volatility.
- Our approach utilises a broad range of asset classes. By increasing the opportunity set of available asset classes and combining assets that vary in response to market driving forces, we are able to deliver more consistent returns increasing investor confidence in the potential range of outcomes for their portfolio.
- We tailor our approach for each asset class instead of uniformly applying pre-defined approaches to all asset classes. We analyse the level of exploitable inefficiencies and determine the appropriate level of active management for each asset class. We focus our research efforts in inefficient asset classes utilising portable alpha techniques to arrive at our desired asset allocation.
- Most investors underestimate the importance of assets under management in determining a manager’s ability to generate out-performance. The best performance usually comes from skilled managers with small assets under management. We focus our research efforts in this area.
- We do not subscribe to the view that large investment teams translate into good investment performance. Instead we focus our research efforts on skilled individuals with sufficient resources to implement their stated investment process.
- We seek investment styles that have worked consistently in different regions. We recognise that, beyond ‘value’ versus ‘growth’, there are other equally important and less researched styles that have a significant impact on portfolio returns. We do not attempt to be style neutral in our portfolios, and aim to use our style biases to increase returns.
- We recognise that managers, who adhere to their investment processes consistently, produce better long-term relative returns compared to managers that try to modify their processes according to economic conditions.
- We ensure that our chosen managers have complementary, not offsetting, characteristics so that the combined portfolio does not result in replicating of the index.
- We leverage technology through our proprietary database and risk management software to monitor the selected managers constantly to ensure that they continue to fulfil their original selection criteria.
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