Inside Plan B
Our investment philosophy
We believe an intrinsically linked and embedded Plan B investment philosophy enables us to focus on addressing the risk of clients not achieving their long-term objectives. It provides guidelines for best practice, improves our stakeholder governance by reducing possible conflicts of interest, and enables innovative adaptability in changing markets, giving our clients security and peace of mind.
We achieve this by adhering to a disciplined, deliberate and integrated approach. This involves properly defining appetite for risk and risk management, long-term objectives, investment outcome modelling, regularly structured reviews and appropriate market diversification.
Our key investment beliefs
Our investment philosophy comprises key investment beliefs which have been developed through our decades of experience and through in-depth academic and scientific research.
Instrumental in achieving our objectives, our key beliefs guide us over the long term as they represent a shared understanding and enable a framework for accountability. They form our guiding principles and support the long-term relationship we form with you. These beliefs can be used to empower you to make deliberate decisions to achieve your goals.
Our key investment beliefs are infused throughout our organisational and fiduciary framework. They are implicit in every investment decision or strategy and we consistently apply them over the long term.
1) We believe that investing is deliberate and requires discipline.
Investing for the long term means that any short-term strategies will be speculative and may introduce needless additional risk into a portfolio. There are many distractions when investing, including media noise, financial services and human emotions. It is important to remain deliberate and disciplined when committing to long-term strategies.
2) We believe that markets work and are generally efficient.
Markets work, and for investment purposes securities are fairly priced most of the time. These prices reflect and are impacted by financial news, research, political, economic and social events, as well as how investors interpret all of this information.
3) We believe that risk and return are intrinsically linked.
We believe investments earning higher relative returns usually carry higher risk. Conversely, investments earner lower returns usually carry a lower risk. Our focus on risk means we deliberately consider whether a risk can be considered a rewarded risk. This means investing according to an appropriate amount of risk.
4) We believe that diversification is vital.
Diversification applies to all markets, not just equity markets, and it reduces uncertainty. Investment strategies concentrated in relatively few securities increase risk without providing additional expected return. The converse is that broad diversification beyond the index adds return while reducing risk. Diversification is the only proven means of mitigating risk in investing for the long term.
5) We believe that costs and taxes are key factors.
Investment strategies should be designed to capture stronger exposure to the factors that drive returns. Transaction costs should be minimised through innovative trading techniques, portfolio engineering and portfolio structure. Our investment strategies provide global exposure to thousands of diverse equities and defensive assets in order to minimise risk, and have been carefully engineered to minimise transaction and tax costs. These cost savings can greatly boost your investment performance on a compounded basis over many years.