Ipac revises global equities strategy
Tuesday, 9 September 2008 12:20pm
AXA Asia Pacific subsidiary ipac shifts more funds into quantitative investing and away from fundamentally driven strategies when it mandated Enhanced Investment Technologies and Arrowstreet Capital to manage more than $800 million in funds.
Enhanced Investment Technologies and Arrowstreet Capital replace Capital International and Wellington Asset Management in the "market orientated" allocation of the ipac global equities portfolio.
Jeff Rogers, ipac chief investment officer, said the changes reflect a new strategy to move away from the fundamental approaches of Capital International and Wellington Asset Management to quantitative and systematic methods.
Enhanced Investment Technologies will manage $476 million in the ipac portfolio using a mathematical approach that is based on the premise that benchmark indices are not efficient portfolios because they don not account for correlation between stocks.
The firm therefore re-weighs the benchmark to forecast the relationships that exist between stocks. A return is generated from regularly rebalancing the portfolio to those target weights.
Meanwhile, Arrowstreet Capital is set to manage $330 million in large cap global equities.
"Arrowstreet is different in its multi-factor return forecasting approach. They consider linkages across global sectors as well the more conventional return signals within country," said Rogers.
"Quantitative approaches are more appealing because of their capacity for broad and uniform coverage of the opportunity set. The challenge for these processes is that they are inherently easier to replicate than other approaches."
Besides Arrowstreet and Enhanced Investment Technologies (part of Janus Capital), the revised ipac global equities portfolio is made up of four other managers including value managers, Bernstein and LSV and growth managers, Alliance Growth and GMO.
Michael Hobbs
This story was found at: http://www.financialstandard.com.au/news/view/23968
Printed: Friday, 12 March 2010 12:39pm