What Defines Prescient Quantitative asset management vs. Qualitative Deliver through asset allocation (being in the right asset class at the right time). No company visits. No stock picking. Valuation driven Consider what is priced into market, rather than forecasting returns Risk focussed Quantify potential outcomes. Manage risk because we can measure it. Not diversifying but managing risk Focus on reduced risk and improved consistency by minimising losses in negative markets Maximise position for: Best upside in positive markets Internally driven Deep understanding of investment philosophy and results Long-term investors.
Prescient Process Enhancements Benchmark Risk limits Return opportunity Why are we different? QuantPlus®
Assets Under Management Retirement funds Medical aid funds Multi managers Corporate treasury Individual retirement savings Individual discretionary savings
US Bonds 0 2 4 6 8 10 12 14 16 18 Jan-72Jan-78Jan-84Jan-90Jan-96Jan-02Jan-08 US Bonds Japan Bonds
S & D Dynamics in the Bond Markets Holdings of US Treasuries Fed $ 1200 bn China $ 846 bn Japan $ 821 bn Current deficit = $1.5 tr p.a.
G7- Era of Negative Real Interest Rates Average G7 short tem real rates. Source: Reuters Average G7 short term real rates - 1.00 2.00 3.00 4.00 Feb-91Feb-92Feb-93Feb-94Feb-95Feb-96Feb-97Feb-98Feb-99Feb-00Feb-01Feb-02Feb-03Feb-04Feb-05 Feb-06Feb-07Feb-08Feb-09Feb-10
Interest Bearing Asset Summary Money market and short bonds discounting a resumption in i-rate hikes Reasonable value in SA bonds overall but supply is an issue Credit reasonable value at current levels ILBs remain expensive
Performance: Balanced QuantPlus ® Period Performances to end February 2011. Inception = January 2001
Decide on your investment objectives See what asset classes can deliver Decide on the volatility you can live with Look at your long term asset allocation Select the fund with that long term asset allocation Let the professionals manage it Balanced Funds
Quantitative analysis relies on mathematical and statistical methods to develop and test theories against real-life streams of security price information. The purpose behind quantitative analysis is to create a mathematical model of market behaviour. That model is then used for designing portfolios and investment strategies. As markets become more efficient, through faster dissemination of market information and improved assimilation of market news into the market places, the more amenable they become to quantitative analysis. Quantitative Analysis
1.Developing accounting based models using databases and forecasts 2.Using the models to rank the stocks 3.Identifying attractive stocks 4.Applying fundamental analysis to determine which stocks to buy or sell There is no emphasis on risk. Qualitative portfolio managers believe that they add value by means of their judgement and forecasting ability. The qualitative approach uses models to provide quantitative input to the judgement process, as well as to understand what is happening in the companies and generate ideas. Qualitative Management Involves:
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