INVESTING
31 August 2019
A unique approach to investing around the world
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edgroup Investments has announced the launch of the Global Diversified Equity Fund (GDE). Rob Johnson, Head of Investments at Nedgroup Investments, says the new fund is ideal for investors looking for long-term capital growth through investment in a global equity portfolio that is broadly diversified across investment style, region, country, sector and individual securities. The fund will be managed by Ardevora Investment Partners (Ardevora), who adopt a unique investment approach based on cognitive behavioural bias observed in the capital markets. Their investment strategy has delivered investors a 15% annualised return (ZAR currency base) since its launch in 2013 and is run by a highly experienced investment team. The investment manager: Ardevora Investment Partners Ardevora is an independent, London-based boutique with a single investment team focused on managing a single investment process. The firm was founded in 2010 by Jeremy Lang and William Pattison, who have worked together in various portfolio management roles since 1986. Together with Ben Fitchew, who also joined in 2010, they are responsible for the management and performance of all the firm’s strategies. As a boutique, owner-managed business with a specialised focus on their investment strategy, Ardevora is aligned to the
FUND PERFORMANCE SINCE-INCEPTION PERFORMANCE TO 31 MAY 2019 1 (ZAR BASED RETURNS)
Source: Ardevora, Bloomberg, Link, Portfolio Evaluation. As at 31st May 2019
success of investors into this fund and an appropriate selection within our Best of Breed™ philosophy. What’s unique about their approach? Ardevora have a unique and commonsense investment approach that builds on traditional fundamental investment techniques to identify unusual behaviour in the market. In particular, they look at the way company management, analysts and investors make decisions, the circumstances in which they tend to make mistakes and where opportunities to invest emerge. Ardevora have developed an approach to exploit or protect
investors from these behaviours. They look for companies where overconfident management teams are restricted from taking excessive risks. These lower-risk businesses can be either misunderstood by equity analysts or out of investor favour due to a particular event. When these factors align, Ardevora will conduct fundamental analysis to ascertain the attractiveness of the investment case.
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A truly diversified portfolio Ardevora is fully aware that behaviour bias can also affect asset manager decisions. To limit the impact of this bias, they construct equally weighted portfolios consisting of a high number
of stocks, which has ranged between 150 and 250 individual holdings. There is no regional bias as portfolio construction mirrors the weightings within the MSCI ACWI benchmark. As the strategy is style and sector agnostic, the portfolio will move shift exposure as different industries experience attractive dynamics. They achieve stock-level diversity by equally weighting buy-list companies within each region and restrict the exposure to any individual stock to 2%. This will prevent the strategy from suffering from an unexpected idiosyncratic event in any one company. The result is a diversified portfolio of global companies, selected using a truly unique investment approach that seeks to benefit from the bias of market participants and builds on traditional fundamental analysis to identify investment opportunities. Note 1 - The performance shown above represents the long-only portion of the Ardevora long/short Global Equity portfolio, since its inception on the 18th February 2011, rather than an actual long-only portfolio (the Global Long-only Equity portfolio was launched on the 29th November 2013). We refer to this portion as the Global Long-only Equity carve-out. Returns shown are actual returns for the Global Long-only Equity carve-out, including transaction costs. As is the case for all historical performance, carve-out returns are no guarantee of future returns and should not be solely relied upon. All returns are in ZAR. Gross returns on the carve-out are shown above. 1
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Nedgroup Collective Investments (RF) Proprietary Limited is the company that is authorised in terms of the Collective Investment Schemes Control Act to administer the Nedgroup Investments unit trust portfolios. Unit trusts are generally medium to long term investments. The value of your investment may go down as well as up. Past performance is not necessarily a guide to future performance. Nedgroup Investments does not guarantee 911281 Nedgroup NotePad_232Hx148W.indd 1 2019/06/28 10:46 the performance of your investment and even if forecasts about the expected future performance are included you will carry the investment and market risk, which includes the possibility of losing capital. Unit trusts are traded at ruling prices and can engage in borrowing and scrip lending. Certain unit trust funds may be subject to currency fluctuations due to its international exposure. Nedgroup Investments has the right to close unit trust funds to new investors in order to manage it more efficiently. A schedule of fees and charges and details of our awards are available on request from Nedgroup Investments.
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