A Different Perspective on Asset Class and Style Tilting
In this live-recorded webinar, Ann Sebastian, Portfolio Manager – STANLIB Index Investments, explains how a quantitative rules-based approach can identify optimal styles which may be applicable in various economic recovery scenarios. She also explains how macro, volatility and yield curve regime analyses can inform portfolio construction through market extremes, as well as discussed which SA companies meet the prevailing “cash is king” phenomenon.
- Equity investment styles or factors work in the South African equity market by giving market direction as well as return resilience
- In the current COVID-19 environment, our style allocation is defensively positioned with biggest tilt towards growth and quality styles during this contractionary environment
- The current financial markets’ environment is either a stock selector’s dream or nightmare, as stock and sector return dispersions are highest in 15 years, creating great opportunities for systematic investors
- Cash-flush equity companies with easily accessible reserves are gaining favour as most companies suffer from flailing earnings expectations
- The STANLIB Multi-Factor Fund has outperformed its benchmark YTD, 1yr, 2yr and 3yr, and has successfully navigated both bull and bear markets. It has proven to be a systematic risk-adjusted solid performer against its peers
- Applying a similar quantitative lens to asset allocation, using certain popular regime indicators (macro, volatility and yield curve) shows that, in the present market, bonds should be preferred over equities.