The unrelenting machine that seizes opportunity
In our ever-changing world, it pays to be ahead of the curve. Arrowstreet have a huge team of specialists with unique investment insight, they forecast with conviction and go wherever they need to go to find the best performance.
Continually researching, searching, seizing, evolving. They do all the work for you in global equities. It’s the foundation of your portfolio that you don’t have to manage because Arrowstreet manages itself. Very, very well.
Arrowstreet can select over 500 stocks for your portfolio. Searching the whole market and forecasting the return of over 15,000 stocks.
Data-driven, not data-led. Arrowstreet uses quantitative tools to apply their investment ideas at scale across a stock universe of over 10,000 companies globally.
This approach allows Arrowstreet to identify and keep track of hidden company relationships across sectors, countries, and supply chains – connecting the dots to capture return opportunities that others miss.
Systematically acting on insights in a highly disciplined repeatable manner, the powerful Arrowstreet machine does the heavy lifting of investing for you.
With incredible depth of data, the dedicated Arrowstreet research team looks for the deeper network to find relationships others overlook.
To beat the benchmark, you can’t be the benchmark. Arrowstreet moves away from the index to focus on finding ‘winners’ and avoiding the ‘losers’, and by acting at speed and scale, they seek to profit from opportunities here and now.
Leaning into the less obvious, they forecast with conviction to act before the wider market. Arrowstreet believes active management must be dynamic, and unapologetically shifts the portfolio to wherever their signals lead them.
Arrowstreet brings the active to active management.
Historical active positioning of the Arrowstreet Global Equity Fund, in the United States and in the Health Care sector, relative to the MSCI All Country World ex Australia Index
Past performance is not a reliable indicator of future performance. Source: Macquarie, FactSet, MSCI, for the period from 31 December 2013 to 31 December 2023. Active positioning is measured against the MSCI All Country World ex Australia Index, in $A unhedged with net dividends reinvested which is the benchmark of the Arrowstreet Global Equity Fund. The Arrowstreet Global Equity Fund has an active weight limit of +/-10% for countries and +/-15% for global sectors, relative to its benchmark.
The fund that never sleeps, the powerful Arrowstreet machine analyses more stocks in an hour than traditional analysts can do in a year.
Change brings challenge, but also opportunity. Traders get faster and data sets get larger. The ideas and strategies that worked in the past won’t necessarily work in the future. Equity managers must evolve or risk fading into irrelevance.
Arrowstreet understands this. With over 100 investment professionals they continually work on finding new signals, new connections between companies and new ways to trade more efficiently. Innovation is not optional.
What doesn’t change is Arrowstreet’s resolve to deliver excellent results for clients.
Recent areas of focus for Arrowstreet’s research
Opportunities and threats in active management – There are three types of market inefficiency that create opportunities for active managers: informational, where ‘faster’ investors can react to new information more quickly than the market; behavioural, where investors act on the same information but disagree on the interpretation, with some investors subject to biases; and constraints, where some investors are constrained from making optimal decisions leading to exploitable market inefficiencies. The main threat to active managers is competition, from those seeking to similarly exploit these opportunities. Arrowstreet focuses its research on identifying new opportunities, particularly unique signals, while appropriately reducing the weights placed on signals identified as having become crowded.
Adding value in different market environments - The increasing popularity of an investment style, such as value, quality, and price momentum, changes and likely increases the risks associated with that investment style. Arrowstreet are cognisant of the risks of getting caught in 'crowded trades' and strive to produce alpha not tied to ‘commoditised’ sources of outperformance. Arrowstreet use several methods to avoid large permanent style tilts in their portfolio, while taking tactical style tilts when those tilts are expected to be rewarded.
Big data in active investment management - Big data can be defined as difficult data, due to its size, complexity or its level of ‘noise’. But the difficulty of big data typically comes from collecting, storing and making it flow – data engineering – rather than from data analysis. For fundamental managers able to solve these issues, big data analytics can add significant value. Arrowstreet most notably uses big data within its expanded linkages model to identify economically related companies – with 10,000+ stocks in the investable universe, Arrowstreet needs to forecast the relatedness of over 50,000,000 pairs of stocks over time.
The Case for Active Management - Successful active management – or generating a positive excess return after fees, relative to a passive alternative – requires overcoming four key obstacles: market efficiency, or the assertion that all relevant information is already reflected in prices; the zero-sum nature of active investing, with an active ‘loser’ for every active ‘winner’; the difficulty of distinguishing luck from skill; and diminishing returns to scale for managers. Through quantitative tools, Arrowstreet seeks to identify investor behaviour driving prices from efficient levels and that can be exploited by active management, while carefully monitoring performance drivers, transaction costs, and capacity within its strategy.
Over a decade of proven experience, outperforming in different market conditions. Arrowstreet manages over US$160 billion AUM1 globally and has garnered a reputation for strong results using their quantitative approach. Put simply, they implement fundamental investment ideas at scale.
1as at 30 June 2023
Target investors
The Arrowstreet Global Equity Fund is designed for consumers who are seeking capital growth and income distribution; are intending to use the Fund as a core component, minor allocation or satellite allocation within a portfolio; have a minimum investment timeframe of seven years; have a high or very high risk/return profile for that portion of their investment portfolio, and require the ability to have access to capital within one week of request.
The Arrowstreet Global Small Companies Fund is designed for consumers who are seeking capital growth and income distribution; are intending to use the Fund as a minor allocation or satellite allocation within a portfolio; have a minimum investment timeframe of seven years; have a high or very high risk/return profile for that portion of their investment portfolio, and require the ability to have access to capital within one week of request.
The Target Market Determination (TMD), available at macquarie.com/mam/tmd, includes a description of the class of consumers for whom the Fund is likely to be consistent with their objectives, financial situation and needs.
Note: Please click the tabs to view the applicable risks for each of the funds.
All investments carry risk. Different investments carry different levels of risk, depending on the investment strategy and the underlying investments. Generally, the higher the potential return of an investment, the greater the risk (including the potential for loss and unit price variability over the short or long term). The risks of investing in this Fund include:
Investment risk: The Fund has exposure to share markets. The risk of an investment in the Fund is higher than an investment in a typical bank account or fixed income investment. Amounts distributed to unitholders may fluctuate, as may the Fund’s unit price, by material amounts over short periods.
Market risk: The investments that the Fund has exposure to are likely to have a broad correlation with share markets in general. Share markets can be volatile and have the potential to fall by large amounts over short periods of time. Poor performance or losses in domestic and/or global share markets are likely to negatively impact the overall performance of the Fund.
International, emerging and frontier market risk: The Fund has exposure to a range of international economies, including emerging and frontier economies. Global and country specific macroeconomic factors may impact the investments that the Fund has exposure to. Governments may intervene in markets, industries, and companies; may alter tax and legal regimes; and may act to prevent or limit the repatriation of foreign capital. Emerging and frontier markets may experience lower liquidity (including as a result of securities or bond markets being closed for extended periods), potential for political unrest leading to recession or war, greater potential for sanctions to be imposed on the country or its citizens, companies or institutions, increased likelihood of sovereign intervention (including default and currency intervention), currency volatility, and increased legal risk. These risks are heightened for frontier markets.
All investments carry risk. Different investments carry different levels of risk, depending on the investment strategy and the underlying investments. Generally, the higher the potential return of an investment, the greater the risk (including the potential for loss and unit price variability over the short or long term). The risks of investing in this Fund include:
Investment risk: The Fund has exposure to share markets. The risk of an investment in the Fund is higher than an investment in a typical bank account or fixed income investment. Amounts distributed to unitholders may fluctuate, as may the Fund’s unit price, by material amounts over short periods.
Market risk: The investments that the Fund has exposure to are likely to have a broad correlation with share markets in general. Share markets can be volatile and have the potential to fall by large amounts over short periods of time. Poor performance or losses in domestic and/or global share markets are likely to negatively impact the overall performance of the Fund.
International, emerging and frontier market risk: The Fund has exposure to a range of international economies, including emerging and frontier economies. Global and country specific macroeconomic factors may impact the investments that the Fund has exposure to. Governments may intervene in markets, industries, and companies; may alter tax and legal regimes; and may act to prevent or limit the repatriation of foreign capital. Emerging and frontier markets may experience lower liquidity (including as a result of securities or bond markets being closed for extended periods), potential for political unrest leading to recession or war, greater potential for sanctions to be imposed on the country or its citizens, companies or institutions, increased likelihood of sovereign intervention (including default and currency intervention), currency volatility, and increased legal risk. These risks are heightened for frontier markets.