Diversifying across asset classes is an important aspect of any investment portfolio. This enables an investor to reduce risks while seeking to maximise returns.
However, it is also critical for an investment team managing a multi-asset portfolio to be diverse in terms of their backgrounds, capabilities and skill sets.
Such diversity will help to prevent "group think" from occurring, and allows the best investment decisions to be made.
Headquartered in Singapore, the Multi-Asset Portfolio Management Team at Nikko Asset Management (AM) comprises five portfolio managers, a senior strategist and two quantitative analysts. Being in a compact team also enables each member to take ownership of the investment process, bringing out the best of diverse skill sets. This team can also react to changes in the market with greater agility and make quicker decisions.
Mr James Alexander, Global Head of Multi-Asset at Nikko AM, says: "Our team is made up of highly experienced investment professionals with complementary skill sets. We have a good mix of research analytics, both fundamental and quantitative, as well as a healthy combination of asset class specialists in developed and emerging markets.”
Good skill sets aside, this culturally diverse team offers different views and opinions, and those insights could result in better investment decisions.
Being based in Asia is another important aspect because Nikko AM, after all, is one of Asia’s largest fund managers with a global reach.
A pragmatic investment philosophy
While the multi-asset team may be diverse, its members share the same investment philosophy.
Mr Sebastian Mullins, Nikko AM’s Portfolio Manager, explains: “The team’s research is founded on valuation, but valuation by itself is not enough. The use of momentum and macro-economic indicators will further help to ensure we have a full holistic picture of what is going on in each different asset class.”
Its multi-asset portfolio comprises four investment approaches focused on developed markets, emerging markets, relative value strategies and alternative risk premia.
Probably the most important part of the multi-asset team's investment process is its focus on downside risk protection. This is essential in ensuring that gains are not eroded by dramatic reversals in markets and is key to producing superior long-term returns.
With its pragmatic investment philosophy and a highly experienced and diverse team, Nikko AM's Multi-Asset Portfolio Management Team is well placed to serve the needs of investors seeking multi-asset solutions.
Unique investment process
Nikko AM’s Multi-Asset Team adopts a unique and holistic perspective for its investment approach.
Instead of simply determining an asset allocation and outsourcing sector management to other teams, the team has complete control over a client’s total portfolio, ensuring that risk management is achieved across countries, asset classes and securities.
The investment process includes four distinct phases that lead to the final portfolio:
- Foundation Portfolio — Determining the asset allocation that drives the majority of the strategy’s returns and risks.
- Dynamic Asset Allocation — Ongoing asset class research allows the portfolio managers to adjust their positioning to capitalise on current market conditions.
- Downside Risk Management — The team incorporates a proactive and layered approach to downside risk protection to help limit losses.
- Implementation & Monitoring — The best of Nikko AM’s capabilities are combined to create an optimal solution. The portfolio is implemented and monitored to ensure the best outcome for the client.
Visit our website www.nikkoam.com.sg/multi-asset for more information.
This advertisement does not constitute an investment recommendation and is for information only. Information may be subject to change without notice. Nikko AM accepts no liability for any loss, indirect or consequential damages, arising from any use of or reliance on this document.
Nikko Asset Management Asia Limited. Registration Number 198202562H.