Central to our investment
philosophy of index tracker fund management is our dedication to,
and extensive experience in the application of established
technology-based systems and processes. We use these widely tested
and recognized methods to provide our clients with competitive
quantitative investment solutions.
We aim to mirror the constituents of select indices as closely as
possible in order to delivering index-aligned performance at the
lowest possible tracking error.
While our established investment processes enable us to
effectively track a wide range of global indices, our focus remains
on emerging market indices, with a specific preference for
fundamental indexation via Research Affiliates Fundamental Indices
(RAFI).
Using Fundamental Indexing (RAFI)
Fundamental indexing weights each company on its ability to
create wealth (i.e. its economic value) rather than on its market
capitalization (i.e. price or valuation relative to the
market).
A company's weighting in a market capitalization index tends to be
driven by market supply and demand, i.e. as the market drives share
prices higher, their weighting in the index increases. This can
result in market capitalization indices following a market momentum
strategy, buying high and selling low - thereby increasing its
overall risk profile.
With fundamental indexing, however, investments may be less
exposed to market boom-and-bust cycles. This is because
fundamental indexing is not reliant on market capitalizations,
using instead four equally weighted financial factors to rate a
company:
- Cash flow, averaged over the past five years;
- Sales, averaged over the past five years;
- Dividends, averaged over the past five years;
- Book value, as at review date.
Central to our investment philosophy of index tracker fund
management is our dedication to, and extensive experience in the
application of established technology-based systems and processes.
We use these widely tested and recognized methods to provide our
clients with competitive quantitative investment solutions.
We aim to mirror the constituents of select indices as closely as
possible in order to delivering index-aligned performance at the
lowest possible tracking error.
While our established investment processes enable us to
effectively track a wide range of global indices, our focus remains
on emerging market indices, with a specific preference for
fundamental indexation via Research Affiliates Fundamental Indices
(RAFI).