Overview
Systematically uncovering opportunities
Leveraging cutting-edge research and extensive data to form multidimensional views of companies
Focus on risk
Aiming to reduce negative surprises
Seeking consistency of active returns
Aiming to achieve consistency through market cycles
Philosophy
The investment philosophy of Macquarie Systematic Investments’ active equity strategies is based on the existence of human behavioural biases and their impact on investor decision-making. These biases create investment opportunities when investors exhibit behaviour that is contrary to that suggested by long-term statistical probabilities.
Our role as investment manager is threefold:
- Identify the bias: Investors are irrational and exhibit behavioural biases, such as narrative fallacy, recency bias, herding, and overreaction.
- Quantify the bias: Factors, or signals, are used to capture and capitalise on such biases to create alpha opportunities. For example, quantifiable characteristics of stocks that have proved to influence future stock returns.
- Implement a portfolio: A diverse set of factors is combined in a portfolio framework to seek to deliver specific investment outcomes.
Process
Our investment approach is premised on using factors, or signals, to capture and capitalise on investor biases. Our investment process is therefore centred around how we develop and calibrate such factors and how they are pulled together in a robust portfolio framework.
Signals can be considered from either an alpha perspective (What are the attractive investment characteristics of stocks?) or a risk perspective (What are the challenges to this investment opportunity?).
Alpha signals distinguish between future outperformers versus underperformers, while risk signals are used to control uncertainty that can lead to both outperformance and underperformance.
At a very high level, our alpha signals reflect time-tested investment approaches, such as, but not limited to:
- Quality: Measuring the strength of a company’s business model and its sustainability of earnings.
- Sentiment: Seeking to capture positive trending behaviour that is likely to continue. Examples include strong share price momentum or strong business operating momentum.
- Value: Seeking to identify the relative valuation of a company given its characteristics, history, and peers.
Risk signals aim to capture and limit potential challenges to participating in investment opportunities. Examples of such factors include market liquidity and environmental, social, and governance (ESG).
Our investment approach takes advantage of a broad range of investment themes to drive performance while aiming to minimise any unwanted risks and seeking to produce a robust and well-diversified portfolio.
What we offer
Australian Equities
- Australian Emerging Companies
- Australian Enhanced Plus Equities
- Australian Enhanced Property Securities
- Australian Small Companies
Global Equities
- Enhanced Emerging Markets
- Enhanced Global Infrastructure
- Enhanced Global Property
- Global Small Companies
- Multi-factor Equity
- Non-market cap-weighted Equity
Management team
For more information on our equity capabilities
Risks
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 portfolio value variability over the short term). Some of the significant risks of the systematic strategies are included below.
Investment risk: The Strategy seeks to generate higher returns than traditional cash investments. The risk of an investment in the Strategy may be higher than an investment in a typical bank account or term deposit. Distributions may fluctuate, as may the Strategy’s value. The value may vary by material amounts, even over short periods of time.
Market risk: The investments that the Strategy 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 Strategy.
Security specific risk: Securities and the companies that issue them are exposed to a range of factors that affect their individual performance. These factors may cause an investment’s return to differ from that of the broader market. The Fund may therefore underperform the market and/or its peers due to its security specific exposures.
International and emerging market risk (for international and emerging market strategies only): The Strategy has exposure to a range of international economies, including emerging economies. Global and country specific macroeconomic factors may impact the investments that the Strategy 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 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.
Overview
Differentiated approach to indexing
Provides exact pre-tax index returns with no management fee
Flexible strategy
Offers flexibility to invest across a range of asset classes and geographies
Robust risk management
Applies a multi-layered approach to risk management
Process
True Index achieves exact pre-tax index returns for no management fee by:
- Gaining securities exposure: by investing in an underlying portfolio of assets closely resembling the exposure of the relevant index.
- Entering into a swap agreement with a Macquarie entity (Macquarie Financial Limited):
- If the underlying portfolio underperforms the index, Macquarie compensates the strategy to the extent of the underperformance.
- If the underlying portfolio outperforms the index, the outperformance is paid to the Macquarie swap counterparty.
* The composition of the return (that is, the split between income and capital returns) may be different from that of the relevant Index. This may be due to the buying and selling of underlying investments or because of the Swap payments (income or expense) used to deliver Index returns.
What we offer
- True Index Australian Listed Property
- True Index Australian Shares
- True Index Emerging Markets
- True Index Emerging Markets Value Weighted
- True Index Global Infrastructure Securities
- True Index Global Real Estate Securities
- True Index International Equities
Management team
For more information on our equity capabilities
Risks
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 portfolio value variability over the short term). Some of the significant risks of the systematic strategies are included below.
Investment risk: The Strategy seeks to generate higher returns than traditional cash investments. The risk of an investment in the Strategy may be higher than an investment in a typical bank account or term deposit. Distributions may fluctuate, as may the Strategy’s value. The value may vary by material amounts, even over short periods of time.
Market risk: The investments that the Strategy 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 Strategy.
Security specific risk: Securities and the companies that issue them are exposed to a range of factors that affect their individual performance. These factors may cause an investment’s return to differ from that of the broader market. The Fund may therefore underperform the market and/or its peers due to its security specific exposures.
International and emerging market risk (for international and emerging market strategies only): The Strategy has exposure to a range of international economies, including emerging economies. Global and country specific macroeconomic factors may impact the investments that the Strategy 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 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.
Overview
Flexible, customised approach
Seeks to enable clients to leverage multiple sources of equity returns to build customised exposures
Retain control
Investment decisions are at the discretion of the client, with Macquarie support at every step
Effective and cost efficient
Combining a variety of investment exposures into one vehicle creates operational and cost efficiency
Process
Multi-Factor enables clients to consolidate many pieces of their investment ‘puzzle’ into a single vehicle:
- Combine individual countries or regions to create unique global equity exposures
- Create a specific factor exposure to complement existing equity managers
- Adopt an alternative construction methodology
- Apply desired socially responsible investment (SRI) screens or environmental, social, and governance (ESG) investment approaches
What we offer
- Macquarie Multi-Factor Solutions
Management team
For more information on our equity capabilities
Risks
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 portfolio value variability over the short term). Some of the significant risks of the systematic strategies are included below.
Investment risk: The Strategy seeks to generate higher returns than traditional cash investments. The risk of an investment in the Strategy may be higher than an investment in a typical bank account or term deposit. Distributions may fluctuate, as may the Strategy’s value. The value may vary by material amounts, even over short periods of time.
Market risk: The investments that the Strategy 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 Strategy.
Security specific risk: Securities and the companies that issue them are exposed to a range of factors that affect their individual performance. These factors may cause an investment’s return to differ from that of the broader market. The Fund may therefore underperform the market and/or its peers due to its security specific exposures.
International and emerging market risk (for international and emerging market strategies only): The Strategy has exposure to a range of international economies, including emerging economies. Global and country specific macroeconomic factors may impact the investments that the Strategy 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 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.
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