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 Our philosophy is consistently applied across our capabilities:

Building Blocks

    • Active Equity aims to outperform through:
        • Consistent biases. These are strategies that have consistent exposure to sources of excess returns over the long term.
        • Adaptive Biases. These are strategies that have dynamically varying exposure to sources of excess returns.
    • Alternatives include hedge funds. These aim to deliver consistent cash-plus returns by capturing unique sources of alpha.
    • Indexation constructs portfolios that track the relevant benchmark. We strive to minimise the tracking error relative to the benchmark and minimise costs.
                   Further Thoughts

      • Alpha has become a scarce resource as the investment industry continues to improve their understanding of the drivers of asset prices.
      • In 1966, the relationship between risk and expected return was defined by the Capital Asset Pricing Model (CAPM). This model provided investors with the ability to understand what portions of a managers’ performance was attributable to the market, and what portion was unexplained (alpha).
      • In 1992, Fama and French introduced two additional factors which explained a significant component of the return which was previously classified as alpha in CAPM.
      • In 1997, Carhart introduced momentum as an additional factor to that of the Fama and French model.
      • In 2012, Novy-Marx found that the quality of a company also affects the resultant returns.


      • Risk-Managed Solutions: Within these multi-asset class funds, we target specific levels of capital preservation to ensure our clients do not suffer significant losses during turbulent market periods. We are therefore able to:
          • Provide clients with peace of mind; and
          • Grow our funds from a higher base and deliver consistent inflation-beating returns.


    Between June 2008 and March 2009, the Median Balanced Fund was down 22% and the JSE All Share index was down more than 40%. In contrast, our Risk Managed Solutions portfolios, Old Mutual Wealth Defender and Old Mutual Capital Growth lost 4% and 0.2% respectively over the period. As we have already seen, this capital protection is extremely important, as the much smaller drawdown experienced by the fund allowed it to compound off a higher base when markets recovered.

      • Shari’ah Solutions leverage off the investment philosophy and approach of one of our Active Equity Solutions (Managed Volatility) to deliver a smoother return path for clients. The Shari’ah Equity, Shari’ah Global Equity and Shari’ah Balanced funds incorporate a market- leading approach to:
          • Shari’ah compliance; and
          • the management of inadmissible income.