Addressing client needs

The reasons for considering an equity income strategy in a portfolio are varied but can be summarised into three broad ‘needs’:

These investors recognise the need to invest in risky assets to earn a higher rate of return to address their longevity or target earning requirements. The problem with this asset shift is that the investor is then exposed to additional levels of capital volatility and, potentially, a diminished level of income.

The equity income strategy seeks to provide a better balance between these three broad investor requirements. The inclusion of an equity income strategy can benefit a broader portfolio of assets as the reduction in equity volatility provides an added layer of risk management beyond what can be delivered through traditional asset allocation alone. We are motivated in our approach by what we consider the most appropriate way of addressing these needs for our investors.

Beliefs

The foundation for our investment philosophy and approach is based on three core beliefs

  1. These investors face a range of structural near-term and long-term challenges
  2. The design of objectives-based investment strategies requires a solution that addresses the short term objectives without compromising long term objectives
  3. Markets remain inefficient, with fundamental insights and information increasingly costly to obtain
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