Acadian’s equity strategies apply the insights from 35+ years of systematic investing experience combined with the power of data to deliver results for our clients.
Data, computational power, and economic insight enable us to build portfolios by selecting from over 40,000 stocks forecasted within our investment universe. Sophisticated signals from innovative and empirically validated research use fundamental and technical market inefficiencies to predict future prices and generate active returns for our clients.
Extension strategies are a form of high-conviction investing. These strategies allow for limited shorting of securities and can produce higher risk-adjusted returns with the same amount of invested capital and net market exposure as long-only strategies.
Finance theory suggests investors should be compensated for holding riskier stocks with higher average returns. However, risk is mispriced and stock returns have been unrelated to their risks over a long history. Our pioneering research builds on the premise of a market return with less risk by seeking to add excess return through stock selection while limiting any exposures not central to risk reduction.
Acadian has been managing emerging markets portfolios for 30 years. Experience accrued during this time informs our present investing approach, and the past few years have reinforced the value of systematic investing in EM. The opportunity set for systematic investing in EM is now broader than ever, owing to expansion of the investible universe, improved data coverage, and a secular downtrend in trading costs.
Read our latest original research on topical issues in systematic investing and asset allocation.
In this piece, we argue that systematic extension strategies are an underappreciated and underutilized tool for asset owners seeking higher active returns. We demonstrate that relaxing the long-only constraint permits broader, deeper, and more precise exposure to the richest parts of the active opportunity set and, potentially, greater flexibility in risk control.
Concentrated equity strategies have attracted attention from asset owners looking for “high conviction” active investments. In this piece, we examine their performance as well as challenges that investors who allocate to concentrated strategies may face when they assume the task of diversification from external managers.
Thirty years ago, Acadian pioneered the application of systematic, active investing to emerging markets. In this note, we highlight what has changed, what hasn't, and why we’re excited about the prospects over the next 30 years.
Concentrated discretionary equity strategies have gone mainstream in recent years. In this piece, we question the approach, highlighting why asset owners shouldn’t mistake such strategies for an easy path to 'high conviction' investing.