Capital markets are dynamic and there are multiple dimensions that investors need to take into account when building investment portfolios for clients. The quest for outperformance, by its nature, is a highly competitive pursuit and therefore investment innovation and continuous process improvement are essential to consistent long term outperformance. We view our people as our most important asset - people provide investment insight, market knowledge and research.
At Vinva, our approach to investing involves having a deep understanding of how the capital markets process new information and then set prices for the different securities. We look to implement our proprietary investment ideas across many stocks and capture mispricing opportunities that may be underresearched or ignored by other market participants.
Key characteristics of our investment approach:
- Skilled and experienced investment professionals with a deep understanding of equity markets
- Insight-driven and disciplined investment process, with a premium given to investment sensibility
- Strong emphasis on risk management, consistent and incremental after-tax value added
- Detailed transaction cost forecasting and modeling embedded in the portfolio construction process
- State-of-the-art systems and technology ensure efficient and timely use of information
- Incorporation of corporate governance signals and ability to tailor to client requirements
- Dedication to on-going investment research and continual process improvement
Our objective is to deliver investment outperformance consistently by extracting alpha in a clear and intentional manner. We believe our investment philosophy - Skill, Breadth and Efficiency - is best expressed by ”Grinold's Fundamental Law of Active Management”*.
The risk-adjusted outperformance (or “information ratio”) of an investment strategy depends on three factors:
- Skill - the accuracy of investment forecasts
- Breadth - the number of independent times that skill is applied per year
- Efficiency - the amount of skill that makes it into the final portfolio after constraints and transaction costs
In simple terms - our objective is to find an investment edge (skill), use it often (breadth) and use it wisely (efficiency)
*Grinold, Richard C.1989, ”The Fundamental Law of Active Management” Journal of Portfolio Management, vol.15,no.3 (Spring):30-37. Richard Grinold is also a founding shareholder of Vinva Investment Management.
Vinva utilises a systematic approach to investing. We bring sound economic insights and market understanding to investing combined with a disciplined and quantitatively driven approach.
- People provide investment insight, market knowledge and research. People are our most important asset.
- Information. We aim to create an information advantage across different ideas and different time horizons.
- Technology allows us to process information quickly and systematically with discipline.
Our investment portfolios exploit a diversified range of market inefficiencies and are designed to be style neutral over time. Our objective is to deliver outperformance irrespective of the market cycle.
Our dynamic portfolio construction process:
- Translates our ideas into portfolio holdings efficiently
- Optimally trades off return, risk, tax and transactions costs in a simultaneous manner
- Only takes active positions which are intended and controls and avoids unintended risk exposures
- Takes into account investment horizon of each idea and the arrival rate of new information