Idiosyncratic returns — consistent alpha across different style cycles

In 2017, RLAM launched two global equity strategies – Global Equity Select and Global Equity Diversified. The strategies have since produced four years of attractive absolute and relative returns, continuing an impressive track record from a strategy that was initially launched in 2002.

clock • 2 min read
Idiosyncratic returns — consistent alpha across different style cycles

Using a markedly differentiated stock selection approach, the strategies have delivered a consistent track record of performance across economic cycles and differing periods of style leadership.

Given the polarisation of Growth and Value style returns over the recent market cycle, it is a good opportunity to look back and understand the drivers behind performance. What we see is evidence of an approach that has idiosyncratic company insights driving outperformance, without depending on a favourable style environment.

A differentiated approach to peers 

We believe that to deliver superior risk-adjusted returns you need to have a competitive edge in comparison to your peers. Our Economic Return Framework and Corporate Life Cycle Concept form the basis of our investment process and provide the team with a high-quality global set of data that can be used to identify companies which are both creating wealth for equity shareholders and fundamentally undervalued.

Proprietary informational and analytical advantages

Our Economic Return Framework covers more than 5000 stocks across the globe and has been built to standardise both balance sheet and cashflow data across regions, sectors, timelines and accounting practices. We believe that this provides us with an advantaged start point of economic value comparisons across our investible universe. 

Our Corporate Life Cycle Concept uses this standardised real economic return data to categorise companies into five distinct phases, each representing a different stage of a corporate's life cycle. This allows us to better compare and evaluate companies within each stage, mindful of the knowledge that the key drivers of success in each are different. 

 

This is a financial promotion and is not investment advice.

The funds are sub-funds of Royal London Equity Funds ICVC, an open-ended investment company with variable capital with segregated liability between sub-funds, incorporated in England and Wales under registered number IC000807. The Authorised Corporate Director (ACD) is Royal London Unit Trust Managers Limited, authorised and regulated by the Financial Conduct Authority, with firm reference number 144037.

For more information on the funds or the risks of investing, please refer to the Prospectus or Key Investor Information Document (KIID), available via the relevant Fund Information page on www.rlam.co.uk.

 

This post was funded by Royal London Asset Management

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