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Tailored for investment professionals this site provides information on our products, strategies and services. Please remember capital is at risk and past performance is not a guide to the future.

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Strategy Focus:
Investec Global diversified Growth Strategy (Euro)

Michael Spinks & Philip Saunders
It is important to have the flexibility to adapt to changing market conditions

Applying a consistent framework

In our last Institutional Update we introduced the methods by which we aim to provide institutional investors attractive growth while limiting volatility. In assessing the different types of assets we apply a consistent framework, scoring them based on three compelling forces: valuation, fundamentals and market price behaviour. The best investment opportunities will score well on all three metrics.


  • Market inefficiencies can lead prices to deviate from their fair value
  • The larger the discount, the greater the opportunity
  • How does the available risk premium compare to history and other assets?


  • Is the cyclical environment supportive?
  • Can future cash flow generation grow or be sustained?
  • Is the investment financially sound?

Market price behaviour:

  • Has the price over or under reacted to news?
  • Are investors’ expectations being revised up or down?
  • How heavily owned is the asset?

This provides the analytical framework to determine our preferences between Growth and Defensive assets and to assess both opportunities from a bottom up perspective.

In the next Institutional Update we will explore the measures we take to protect client portfolios.

Figure 1: Investment approach

Beyond traditional asset classes

Last quarter we introduced the idea of ignoring traditional asset class boundaries in favour of defining asset classes by their fundamental characteristics: Growth, Defensive and Uncorrelated.


  • Assets that return in line with expectations of real economic growth
  • React positively to increasing corporate earnings, cashflow and risk appetite


  • Assets that react positively to declining expectations of real economic growth
  • Safe havens in market crises


  • Variable relationships with growth and risk appetite
  • Performance is generally unrelated to real economic and corporate earnings growth

Current risk and opportunities

  • Eurozone and emerging economies are now growing more strongly than in recent years and converging on the US.
  • The primary macro risk is whether the new US administration can deliver on tax cuts and regulatory easing. In Europe, political risk has so far only affected bond markets.
  • The improvement in earnings needs to continue for developed market equities to make further gains and, unlike in recent years, early signs are encouraging.
  • The US is in a tightening cycle, but underlying structural weakness means 30 year US Treasuries offer value above 3%.
  • Cyclical growth and inflationary pressures are likely to force a change in approach by the European Central Bank.
  • Although the economic momentum is strong, Growth assets are not as attractively valued as they were and we are progressively adding to Defensive and Uncorrelated exposure.

Figure 2: Current and historic allocations to Growth, Defensive and Uncorrelated assets since 2008

The above internal parameters are subject to change. Source: Investec Asset Management, 31.03.17.
The performance target may not be achieved.
Global equities as measured by the MSCI World Index.
Diamonds refer to the current allocation of the euro based pooled fund. Bars relate to the historic range of a sterling denominated representative portfolio since May 2008.


If you have any questions or would like more information on the topic please contact us.

Important Information
The information may discuss general market activity or industry trends and is not intended to be relied upon as a forecast, research or investment advice. The economic and market views presented herein reflect Investec Asset Management’s (‘Investec’) judgment as at the date shown and are subject to change without notice. The value of investments, and any income generated from them, can go down as well as up and will be affected by changes in interest rates, exchange rates, general market conditions and other political, social and economic developments, as well as by specific matters relating to the assets invested in.

There is no guarantee that views and opinions expressed will be correct, and Investec’s intentions to buy or sell particular securities in the future may change. The investment views, analysis and market opinions expressed may not reflect those of Investec as a whole, and different views may be expressed based on different investment objectives. Investec has prepared this communication based on internally developed data, public and third party sources. Although we believe the information obtained from public and third party sources to be reliable, we have not independently verified it, and we cannot guarantee its accuracy or completeness. Investec’s internal data may not be audited. Any decision to invest in securities or strategies described herein should be made after reviewing the prospectus and conducting such investigation as an investor deems necessary and consulting its own legal, accounting and tax advisors in order to make an independent determination of suitability and consequences of such an investment. This material does not purport to be a complete summary of all the risks associated with this Strategy. A description of risks associated with this Strategy can be found in the Prospectus or other disclosure document for the fund or Strategy. Copies of such documents are available free of charge upon request. Investec does not provide legal or tax advice. Prospective investors should consult their tax advisors before making tax-related investment decisions.

Investment Team
There is no assurance that the persons referenced herein will continue to be involved with investing for this Strategy or Fund, or that other persons not identified herein will become involved with investing assets for the Manager or assets of the Strategy or the Fund at any time without notice.

Investment Process
Any description or information regarding investment process or strategies is provided for illustrative purposes only, may not be fully indicative of any present or future investments and may be changed at the discretion of the manager without notice. References to specific investments, strategies or investment vehicles are for illustrative purposes only and should not be relied upon as a recommendation to purchase or sell such investments or to engage in any particular Strategy. Portfolio data is expected to change and there is no assurance that the actual portfolio will remain as described herein. There is no assurance that the investments presented will be available in the future at the levels presented, with the same characteristics or be available at all. Past performance is no guarantee of future results and has no bearing upon the ability of Manager to construct the illustrative portfolio and implement its investment strategy or investment objective.

Performance Target
The target is based on Manager’s good faith estimate of the likelihood of the performance of the asset class under current market conditions. There can be no assurances that any Strategy or Fund will generate such returns, that any client or investor will achieve comparable results or that the manager will be able to implement its investment strategy. Actual performance of investments and the Fund or Strategy overall may be adversely affected by a variety of factors, beyond the manager’s control, such as, political and socio-economic events, adverse changes in the interest rate environment, changes to investment expenses, and a lack of suitable investment opportunities. Accordingly, Performance Targets may be expected to change over time and may differ from previous reports.

Specific Portfolio Names
References to particular investment or strategies are for illustrative purposes only. Unless stated otherwise, the specific companies listed or discussed are included as representative of the Strategy or Strategies. Such references are not a complete list and other positions, strategies, or vehicles may experience results which differ, perhaps materially, from those presented herein due to different investment objectives, guidelines or market conditions. The securities or investment products mentioned in this document may not have been registered in any jurisdiction. More information is available upon request.

Indices are shown for illustrative purposes only, are unmanaged and do not take into account market conditions or the costs associated with investing. Further, the manager’s strategy may deploy investment techniques and instruments not used to generate Index performance. For this reason, the performance of the manager and the Indices are not directly comparable.

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