We believe there are numerous advantages to a truly global approach to investing, in addition to the pure breadth of opportunities it may offer. Our Global strategy, launched in 1992, best reflects the increased globalization of economic activity and seeks to provide the greatest opportunity to exploit stock, country and sector effects in both developed and emerging markets. A global approach to equity investing may also offer diversification in the sources of value-added to portfolio returns, and allows for active asset allocation across countries, regions and sectors that may not be available in segregated regional strategies.
As clients' needs have evolved, Acadian's product offerings have expanded to include a variety of regional equity strategies. These implementations range from single country mandates in the U.S. and Japan to entire regions in developed, emerging and frontier markets.
Acadian’s expertise in managing high volumes of data gives us the ability to apply our stock selection process not only across countries, regions and sectors, but across capitalization sizes as well. Our highly structured portfolio construction and portfolio management processes, and skill in trading less liquid markets, gives Acadian the ability to efficiently apply our stock forecast model in small-cap stocks in developed and emerging markets.
Based on collaboration with clients seeking higher levels of excess return, Acadian launched a series of high conviction strategies. Holding a smaller number of stocks in a portfolio has the potential to allow us to maximize absolute returns by focusing on Acadian's most highly ranked stocks. Within our concentrated strategies the focus is on absolute risk, as portfolios feature high tracking error, but are also aiming for high risk-adjusted returns as reflected in Sharpe ratios.
ESG investing applies across all of our equity strategies. Acadian integrates factors into our core investment process along three dimensions:
- Return: Governance quality and sociopolitical risk are two examples of ESG measures already in use within our investment process; however, we continuously seek new sources of return associated with ESG attributes. . In this search for new sources of return, we retain our fiduciary duty to maximize risk-adjusted returns and hold ESG factors to the same standards as all potential sources of return.
- Risk: We tailor mandates to our clients’ specific risk appetites and apply different approaches ranging from simple exclusions to sophisticated risk mitigation strategies (e.g. climate change).
- Portfolio monitoring: We have developed a set of tools to monitor exposures in portfolios and engage clients in a fact-based, constructive dialogue on how to best meet their objectives.
The degree of implementation of ESG considerations into our investment process remains client-driven and client-specific. At client direction, we can incorporate ESG issues into our portfolio construction through active portfolio tilts, ESG-sensitive proxy voting or more simply, ESG screening restriction lists.
In response to recent demand from investors, Acadian now offers a suite of ESG implementations in Global, Emerging Markets, and Australian equity portfolios, as well as a recently incepted Emerging Markets Fossil Fuel-Free strategy.
For more information, please see Acadian's Statement on Responsible Investing
Acadian is a signatory to the United Nations Principles for Responsible Investment (PRI), ESG-RA and the Japan Stewardship Code. As an active signatory to the PRI, we participate in the annual review of our firm’s responsible investing process and policies. Our Transparency Report
is disclosed on the PRI website.