A long and successful track record, portfolios covering global, developed and emerging markets and a sophisticated quantitative investment process are propelling the take-up of Conservative Equities, says Arlette van Ditshuizen.
Our ranking model, however, is much more sophisticated. We reduce risk by using a combination of variables and by including forward-looking measures based on a proprietary distress-risk model. Returns are enhanced by selecting low-volatility stocks which also have attractive valuation and sentiment characteristics.
If there are two stocks that are equally attractive in terms of low risk, we prefer the stock with the best valuation and sentiment. We like to say that no two low-risk stocks are created equal. One will likely have a better future return than the other—and that’s the stock we select for the portfolio.
For example, we have learned over the years that taking a broad view of risk, which incorporates non-statistical measures such as distress risk, can enhance a low-volatility portfolio. We developed a proprietary distress risk model that takes into account how balance-sheet leverage might translate into future distress and which incorporates other forward-looking financial information about a company’s corporate structure. Our distress risk model improves overall performance by helping the portfolio to avoid tail risk and by reducing the severity and occurrence of drawdowns.
The development of Emerging Conservative Equities was possible because of a unique combination of in-house experience in emerging markets equities, low volatility strategies and quant investing. We had, for example, been managing emerging markets quant portfolios since 2006. And Robeco’s fundamental Emerging Markets team had been investing in emerging markets since 1994 and using Robeco’s proprietary emerging-markets stock-selection model to generate ideas since 2001.
But, of course, performance is just part of the story. Many of our pension-fund clients are also responding to the uncertainty of the economic recovery and looking to harvest the equity risk premium at a lower volatility and to stabilize coverage ratios. They find the capital preservation aspect of the Conservative Equity strategy particularly attractive.
Clients appreciate that there is no “black box” with Robeco’s Conservative Equity portfolios. We can explain every position. Unlike many generic strategies, we are not just ranking stocks based on risk. We do more and it provides a more robust outcome. I think that’s why clients prefer our approach in today´s uncertain markets.
Arlette van Ditshuizen is the co-portfolio manager, with Pim van Vliet, of Robeco’s Conservative Equity portfolios. Together they manage more than EUR 3 billion in low-volatility equities. Van Ditshuizen, who joined Robeco in 1997, has been managing Robeco´s Conservative Equities portfolios since February 2007, when she joined the Quantitative Equity team.
The value of your investments may fluctuate. Results obtained in the past are no guarantee for the future.
The content displayed on this website is exclusively directed at qualified investors, as defined in the swiss collective investment schemes act of 23 june 2006 ("cisa") and its implementing ordinance, or at “independent asset managers” which meet additional requirements as set out below. Qualified investors are in particular regulated financial intermediaries such as banks, securities dealers, fund management companies and asset managers of collective investment schemes and central banks, regulated insurance companies, public entities and retirement benefits institutions with professional treasury or companies with professional treasury.
The contents, however, are not intended for non-qualified investors. By clicking "I agree" below, you confirm and acknowledge that you act in your capacity as qualified investor pursuant to CISA or as an “independent asset manager” who meets the additional requirements set out hereafter. In the event that you are an "independent asset manager" who meets all the requirements set out in Art. 3 para. 2 let. c) CISA in conjunction with Art. 3 CISO, by clicking "I Agree" below you confirm that you will use the content of this website only for those of your clients which are qualified investors pursuant to CISA.
Representative in Switzerland of the foreign funds registered with the Swiss Financial Market Supervisory Authority ("FINMA") for distribution in or from Switzerland to non-qualified investors is ACOLIN Fund Services AG, Affolternstrasse 56, 8050 Zürich, and the paying agent is UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zürich. Please consult www.finma.ch for a list of FINMA registered funds.
Neither information nor any opinion expressed on the website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco/RobecoSAM AG product should only be made after reading the related legal documents such as management regulations, articles of association, prospectuses, key investor information documents and annual and semi-annual reports, which can be all be obtained free of charge at this website, at the registered seat of the representative in Switzerland, as well as at the Robeco/RobecoSAM AG offices in each country where Robeco has a presence. In respect of the funds distributed in Switzerland, the place of performance and jurisdiction is the registered office of the representative in Switzerland.
This website is not directed to any person in any jurisdiction where, by reason of that person's nationality, residence or otherwise, the publication or availability of this website is prohibited. Persons in respect of whom such prohibitions apply must not access this website.