Inside Plan B
Our investment approach
Research has found that asset class investing is the most reliable investment model available today.
Asset class investing principles demonstrate that the selection of asset classes, rather than stock picking or market timing, are what deliver a consistent longer-term investment performance without exposing you to unrewarded risk, transaction and tax costs.
In fact, traditional ‘active' management techniques do not persistently result in above market returns after allowing for management and tax costs. Asset class investing, however, provides exposure to diverse asset classes within an efficiently structured portfolio which delivers better returns without exposing you to undue risk.
Four key investment principles
Our asset class investment approach is based on extensive research and follows these four principles:
1. Markets are efficient
Markets work, and for investment purposes securities are fairly priced.
2. Risk and return are related
Investments earning higher relative returns usually carry higher risk.
3. Diversification is essential
Diversification reduces uncertainty. Investment strategies concentrated in relatively few securities increase risk without providing additional expected return.
4. Structure explains performance
Investment strategies should be designed to capture stronger exposure to the factors that drive returns, i.e. small and value companies. Transaction costs should be minimised through innovative trading techniques, portfolio engineering and portfolio structure.
Our investment pools provide global exposure to thousands of diverse equities and defensive assets in order to minimise risk, and have been carefully engineered to minimise transaction and tax costs.
These cost savings can greatly boost your investment performance on a compounded basis over many years. It's no wonder people are increasingly looking to transition into asset class portfolios.
Read more on the benefits of asset class investing.