Barney Goodchild, Francois De Bruin and Richard Saldanha set out the thought process behind our Global Equity Endurance strategy.

A quick scan of marketing collateral for most investment products will generally point to a goal of outperforming a reference index with similar or lower levels of risk. However, the reality is that only a few global equity products have consistently delivered on the return side of the equation.

Certain strategies, such as those with a value or growth bias, can be expected to have a natural cyclicality to their returns. However, for funds marketed as having an all-weather approach (such as those included in the Morningstar Large Cap Blend peer group), investors would expect more consistency. 

Looking at rolling three-year excess returns for the peer group between 2017-2022, only 13 out of a total sample size of 110 funds consistently generated a positive excess return. 

So, why is consistent outperformance elusive for most managers? In "Five principles for performance persistence", we answer this question and explain how our Global Equity Endurance strategy seeks to retain its membership as part of the elite group of evergreen strategies delivering persistent outperformance, highlighting:

  • Why investors should focus on both relative and absolute risk
  • Why an overemphasis on diversification, ‘quality’ and short-termism are pitfalls investors should avoid
  • The five principles underpinning our approach

Key risks

The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency and exchange rates. Investors may not get back the original amount invested.

Emerging markets risk

The strategy invests in emerging markets; these markets may be volatile and carry higher risk than developed markets.

Derivatives risk

The strategy uses derivatives; these can be complex and highly volatile. Derivatives may not perform as expected, which means the strategy may suffer significant losses.

Illiquid securities risk

Certain assets held in the strategy could, by nature, be hard to value or to sell at a desired time or at a price considered to be fair (especially in large quantities), and as a result their prices could be very volatile.

Concentration risk

The strategy invests in a small portfolio of securities. Losses from a single investment may be more detrimental to the overall strategy performance than if a larger number of investments were made.

Related views

Important information


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