Category: Multi Asset Class

Perpetual kicks goals with Mainstream SMA

Against some quality competition, Soteria Capital – Stanford Brown’s fully owned investment company – took out the award for Multi Asset Class at the IMAP Awards.


Finalists

IMAP congratulates all the finalists in the Multi Asset Class category.

  • Canaccord
  • Infinity Asset Management
  • Resonant
  • Shaw and Partners
  • Soteria Capital
  • Watershed Funds Management

For the second year running, the IMAP Award for Multi Asset Class went to Stanford Brown/Soteria Capital, which Chief Investment Officer, Ashley Owen, acknowledges is a wonderful endorsement of the quality and rigour of Stanford Brown’s investment philosophy. 

“It’s recognition that what we’re doing at Stanford Brown and Soteria Capital is working,” says Ashley. 

Ashley oversees a five person investment committee, which dutifully considers the models, processes and methodologies for every single asset class under review. It’s a meticulous undertaking.

At the heart of the decision-making process is Stanford Brown/Soteria Capital’s distinctive philosophy towards investing, which Ashley says is very evidence-based.

“Our philosophy and investment process is fact-based as opposed to dogmatic theory, like Markowitz and efficient markets,” Ashley says. “We deal with how markets work in the real world.

“The implication of that is that the ‘buy and hold’, ‘set-and-forget’, Markowitz-type nonsense, is not part of our process. The idea of time in the market, not timing the market, is a dogma that’s been around for decades, but it’s definitely not part of our process.”

Ashley points to Japan as an example: “If you were invested there in 1989, you’re still waiting for half your money back 30 years later. So much for time in the market!”

Having discarded the academic dogma and theory that still drives most of the thinking around investing today, Ashley says it has allowed the business to develop its own approach to investing with a clean slate. 

“We’re always taking a stance on things,” Ashley says. “For example, we underweighted global and Aussie shares significantly prior to the sell-off last year. We underweighted the dollar, we bought US$ cash, bought gold, and then at the beginning of this year, we turned bullish with the rebound, so we went overweight global and Aussie shares.

“These are the types of significant moves you make probably once every three or four years, whereas at other times, like the QE boom of 2012-2015, we basically did nothing. We just sat on our positions – overweight shares, while the rest of the world remained nervous about QE and money printing.”

Ashley attributes much of Stanford Brown/Soteria Capital’s success to the skill of the investment committee and to the fact that the business is prepared to take a stand on asset classes and positions, which many other investment managers are reluctant to do.

“We are prepared to change allocations significantly where necessary, compared to a lot of other managers who just stick to their ‘buy and hold’, ‘set-and-forget’ allocations.”

Lower risking volatility 

At the core of Stanford Brown/Soteria Capital’s approach to investing is its primary goal of achieving its investors’ long-term returns.

“Our portfolios have targets of CPI + 3, 3.5, 4, 4.5 and 5, which ranges from conservative to high growth. We are able to achieve that with lower risk and volatility, providing our investors with a much smoother investment path,” he says.

To demonstrate, Ashley looks at last year, where the worst month in most portfolios was down -4 to -4.5 per cent, due to the downturn in the U.S. market, which recorded its worst December since 1931. 

“In contrast, our worst month in our most aggressive portfolio was down about -1.25 per cent because we were underweight shares. So, we aim to give investors fewer, shorter and shallower setbacks in their journey through investment markets, in order for them to achieve their goals,” he says.

“We aim to achieve better returns at lower risk and volatility. We do that by taking an evidence-based approach to investing, which includes taking an active position on markets where we need to.”  

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