We believe there are numerous advantages to a truly global approach to investing, in addition to the pure breadth of opportunities it may offer. Our Global strategy, launched in 1992, best reflects the increased globalization of economic activity and seeks to provide the greatest opportunity to exploit stock, country and sector effects in both developed and emerging markets. A global approach to equity investing may also offer diversification in the sources of value-added to portfolio returns, and allows for active asset allocation across countries, regions and sectors that may not be available in segregated regional strategies.
As clients' needs have evolved, Acadian's product offerings have expanded to include a variety of regional equity strategies. These implementations range from single country mandates in the U.S. and Japan to entire regions in developed, emerging and frontier markets.
Acadian’s expertise in managing high volumes of data gives us the ability to apply our stock selection process not only across countries, regions and sectors, but across capitalization sizes as well. Our highly structured portfolio construction and portfolio management processes, and skill in trading less liquid markets, gives Acadian the ability to efficiently apply our stock forecast model in small-cap stocks in developed and emerging markets.
Based on collaboration with clients seeking higher levels of excess return, Acadian launched a series of high conviction strategies. Holding a smaller number of stocks in a portfolio has the potential to allow us to maximize absolute returns by focusing on Acadian's most highly ranked stocks. Within our concentrated strategies the focus is on absolute risk, as portfolios feature high tracking error, but are also aiming for high risk-adjusted returns as reflected in Sharpe ratios.
At our core, Acadian seeks investments that are likely to generate the best risk-adjusted returns. We believe such investments are characterized by strong financial health, solid business prospects, effective corporate governance and upside potential. We have uncovered responsible investment factors that have the potential to add value at both the bottom-up and top-down levels, and these are integrated within our core process. In addition, we offer customized ESG capabilities in our portfolio construction and proxy voting systems at client request.
For more information, please see Acadian's Statement on Responsible Investing
In addition, Acadian is committed to our ESG research agenda. We believe that ESG issues may be material investment issues, and the academic and practitioner research on quantitative ESG signals is growing. Acadian believes the potential return to such research has the potential to be attractive, and that principles of socially responsible investing fit well with our core approach to investing.
Acadian is a signatory to the United Nations Principles for Responsible Investment (PRI), ESG-RA and the Japan Stewardship Code. As an active signatory to the PRI, we participate in the annual review of our firm’s responsible investing process and policies. Our Transparency Report
is disclosed on the PRI website.