Our Core equity Investment philosophy is driven by the pursuit of Alpha, irrespective of economic cycles.

We believe that a portfolio of high quality, robust, innovative, customer caring, problem resolving companies; managed by a fully dedicated management team with a focus on growth and efficiency tend to outperform more modest ones over the long term.

Given short term market cycles and volatility which create mis-pricing opportunities, Anneau consistently uses shorter term technical analysis and market information to enhance its tactical strategy.

Our equity philosophy can be segregated into the following two (2) cycles and their corresponding strategies:

1. STRATEGIC EQUITY STRATEGY (TRACKING MARKET RETURNS)

Most of our equity mandates tend to be benchmark constrained and so our need to master our cyclical tracking error versus corresponding benchmarks over the long term. We do not mind concentrated equity positions in our strategic equity strategy as these positions are driven by fundamental bottom up research. In consequence, these form part of our core equity positioning. As part our strategic equity portfolio allocation, we tend to favour high growth, value companies and where possible, with enhanced income streams.

Some of the key considerations sacred for Anneau in defining high quality strategic equities are : The quality of the shareholders, the board of Directors, the executive management team, the company’s strategy for sustainable growth the execution thereof, unique competitiveness in its products and services delivery versus its competitive landscape.

We finally apply a range of financial filters based on the relative valuation of the company, its price, cash flow robustness and predictability, the growth of its revenues and market segments, its margins and profitability as well as its credit worthiness, where applicable.

2. TACTICAL EQUITY STRATEGY (PURSUING EXCESS RETURNS)

Our tactical equity strategy is more geared towards creating Alpha through short term positions using top-down analysis, macro-economic research and technical analysis. This segment of our equity portfolios trades more frequently. We aim to take advantage of short-term volatility in the market to strengthen or weaken our tactical positions in view of creating risk adjusted Alpha for our equity portfolios.

Bar research and the use of technical strategies including technical charting tools, intuition is a very important part of our tactical equity strategy. 

Assuming a perfect market, all public information should already be priced in the current market price of an investment security. Hence, ceteris paribus, the analysis coupled with the portfolio manager’s experience and intuition is critical in positioning against current market consensus and in our humble opinion, the only possible way to derive Alpha against the market.