How we invest
How we invest
We offer fee-only, evidence-based investment management that is unbiased, truly independent and executed in a highly cost-effective manner. Its success is based on long-term market history, academic evidence, practical application and patient participation.
Our investment philosophy goes back to basics. We stick to the following principles:
Markets throughout the world have a history of rewarding investors for the capital they supply. Companies compete for investment capital, and millions of investors compete to find the most attractive returns. Markets quickly incorporate information from this competition into security prices.
Structure determines performance
Decades of financial research have identified dimensions of higher expected returns in the global capital markets. Portfolios can be structured around these dimensions, which are sensible, backed by data, and cost-effective to pursue in diversified portfolios.
Diversification is essential
Diversification is an essential tool. It enables you to capture broad market forces while reducing the uncompensated risk associated with individual securities and increasing flexibility in trading.
Invest, don’t speculate
Traditional investment approaches strive to beat the market by taking advantage of perceived pricing “mistakes” and attempting to predict the future. Too often, these approaches prove costly and futile. Predictions go awry and managers may hold the wrong securities at the wrong time, missing the strong returns that markets can provide. Meanwhile, capital-based economies thrive; not because markets fail, but because they succeed.
Focus on your plan
An investment plan based on the science of investing frees you to focus on what matters. Let markets work for you by taking advantage of sensible, well-diversified, low-cost portfolios backed by decades of research and practical experience. As your financial planner, we can help create an investment plan that works for you.
We believe in the power of capital markets to deliver positive long-term returns that lead to wealth accumulation. For the equities market, in particular, we believe that public markets exhibit efficient characteristics over the long term. For the individual investor, it is thus not desirable to try to forecast or outguess other market participants.
We focus our efforts on building data-driven portfolios to get broad market exposure with a tilt towards characteristics that have been proven to capture premiums undervalued by the equities markets. We believe in creating diversified investment portfolios, which generate the highest possible expected return for every level of risk taken by an investor.
For Private Capital, this means continuously searching the investment universe for instruments that will improve risk-return tradeoff in our portfolios. We understand that fees dramatically affect long-term returns, and endeavor to continuously lower fees for our customers by leveraging our collective scale to create cost synergies. You can learn more about our investment philosophy here.
Financial markets have historically rewarded long-term investors, and provided growth of wealth that has more than offset inflation. Over time, markets display efficient characteristics and investors are rewarded commensurately for the risks that they take. Taking an evidence-based approach to investing means analyzing empirical data and academic evidence and applying it in a systematic manner rather than trying to speculate or outguess other market participants. The aim of evidence-based investing is to give you the highest probability of success in growing your wealth over the long-term.
Academic research has identified certain drivers of higher expected returns, and we structure our portfolios to capture these higher returns whilst maintaining a broad global market exposure. We believe in creating diversified investment portfolios and understand that costs dramatically affect long-term returns, and endeavor to implement efficient trading execution and continuously lower fees for our clients where possible.
Private Capital has done extensive due diligence and analysis to make asset allocation and portfolio construction decisions to select the best funds for our client portfolio. We utilise the expertise of some of the most respected fund management companies whose interests are aligned in serving you, and who share our values and investment philosophy. We offer investment products exhibiting consistent investment characteristics and offer these at attractive institutional-level costs. These fund managers manage the underlying funds in your portfolio.
We may at times choose to alter our portfolios at the discretion of our investment committee, to deploy other funds from other fund management companies if we feel it is the best way to express our asset allocation views, or if the additional funds improve the risk-return profile of the portfolio.