Investment philosophy
Investment philosophy
A Robust Process
We believe a sound investment process is the cornerstone of investment success as it helps us avoid common biases and make informed decisions. We dedicate a significant portion of our intellectual capital to stay up to date with the latest investment research, ensuring that our process is robust, tested, and grounded in historical evidence. Investing involves probabilities, and our goal is to tilt the odds in our favour over time.
A Robust Process
We believe a sound investment process is the cornerstone of investment success as it helps us avoid common biases and make informed decisions. We dedicate a significant portion of our intellectual capital to stay up to date with the latest investment research, ensuring that our process is robust, tested, and grounded in historical evidence. Investing involves probabilities, and our goal is to tilt the odds in our favour over time.
Emphasis on Diversification
We maintain well-diversified portfolios with a mix of asset classes, including both local and offshore investments. We have found that many asset classes correlate in times of market stress, so we hold assets that will benefit the investor by providing diversification during these times.
Emphasis on Diversification
We maintain well-diversified portfolios with a mix of asset classes, including both local and offshore investments. We have found that many asset classes correlate in times of market stress, so we hold assets that will benefit the investor by providing diversification during these times.
Active Asset Allocation
Research indicates that a portfolio’s returns over time are primarily driven by asset allocation decisions rather than individual security selections. Managers tend to erode value when they frequently adjust their asset allocations in the short term. We employ a building block approach to asset allocation, which gives us precise control over our asset exposures and allows us to rebalance as necessary. This flexibility enables us to deviate from our Strategic Asset Allocation when specific asset classes or combinations offer better long-term returns with lower risk, all while maintaining diversification.
Intelligent Portfolio Construction
We focus on identifying quality managers with strong risk management strategies. Our portfolio construction involves blending managers, strategies, and styles that complement each other. We also use both active and passive strategies, including ETFs, stay updated with product innovations, and incorporate these into our portfolios to maximize risk-adjusted returns.
Intelligent Portfolio Construction
We focus on identifying quality managers with strong risk management strategies. Our portfolio construction involves blending managers, strategies, and styles that complement each other. We also use both active and passive strategies, including ETFs, stay updated with product innovations, and incorporate these into our portfolios to maximize risk-adjusted returns.
Cost-Conscious
Controlling costs is crucial for long-term performance because capital spent on fees is capital that can’t be used for compounding returns. However, the most important aspect is returns after fees. We negotiate the best possible rates with active fund managers to ensure we receive added value. For areas where active management doesn’t add value, we use low-cost passive solutions. We prioritize cost control as it is one of the few certainties in investing.
Cost-Conscious
Controlling costs is crucial for long-term performance because capital spent on fees is capital that can’t be used for compounding returns. However, the most important aspect is returns after fees. We negotiate the best possible rates with active fund managers to ensure we receive added value. For areas where active management doesn’t add value, we use low-cost passive solutions. We prioritize cost control as it is one of the few certainties in investing.
What our leadership has to say
New Road Capital was born out of a desire to provide financial planners and investors with unique, yet practical solutions that simplify the complexities around investment choice and implementation.
Chief Investment Officer, Paul Fouché