In this update we will put look at the performance of our Diversified Alpha strategy from a historical perspective, provide some guidance to long-term performance expectations, and highlight some important events that took place in the six months since inception.
Evaluating and managing crash risk is one of the most difficult tasks facing investors.
2015 was challenging for our stock selection process. In particular, two segments, North American energy and what we consider to be speculative growth retail stocks, account for the majority of the losses experienced in the portfolio.
Diversified Alpha is a global absolute return strategy that seeks to generate modest positive returns in most market environments, with low correlation to a variety of asset classes.
The strategy experienced strong macro-driven headwinds through much of the first half of 2015. Driving performance were two related issues we see as the two sides of the same coin.
We believe maintaining well-diversified exposures to multiple return signals is key to generating consistent returns through stock selection.
Acadian’s investment objective for the Global Levered Market Neutral (GLMN) strategy is to derive the majority of return from market-agnostic stock selection, driven by optimal exposures to our fundamental and technical drivers of equity returns.
Our GLMN strategy’s tightly controlled risk management framework, which seeks to maintain a balanced exposure to sources of risk and return, and broad regional and sector diversification were equally important to achieving 2014 performance.
Acadian's culture is unique. We leverage our breadth of knowledge and experience to create a collegial environment that fosters ingenuity and discipline through transparency and collaboration, which we see as key to innovation.
A broad array of investors are included among Acadian's diverse client base, and exemplify our ability to design and structure investment strategies to meet the unique and diverse needs of all investor types.
Transparency is a core tenet of Acadian's culture, and is a key component in building deep and long-lasting client relationships.
Rather than pushing products to the marketplace, Acadian takes a collaborative approach with clients to listen to their needs, and provide solutions custom tailored to meet those needs.
Acadian believes in a diversified and scientific approach to innovation, and pursues a wide range of ideas in the effort to uncover, refine, and adopt enhancements to our investment process.
Acadian believes that markets are inefficient, and that such inefficiencies are caused in part by systematic mistakes in investor behavior, as well as structural features of markets.