The Consilium Investment Committee (CIC) employs an evidenced based asset class investment philosophy when selecting underlying fund managers, individual assets and constructing portfolios.
The Consilium Investment Committee strives to provide investment solutions that assist advisers to more reliably guide investors to achieving their long term financial goals. To achieve this, the Consilium series of portfolios are:
- Firmly grounded in investment theory, and
- Rigorously testing using empirical data.
Asset class investing is supported by a wealth of time-tested academic research such as Modern Portfolio Theory, the Efficient Market Hypothesis and the Fama French Five Factor Asset Pricing Model.
Key concepts of asset class investing include:
- In liquid markets, prices reflect all the available information
- Diversification is essential to reduce unnecessary risks and enhance reliability
Academic research has also identified specific factors that explain systematic differences in equity returns over time. These factors are supported by sound economic rationale, are persistent across historical time periods, pervasive across markets, robust to alternative specifications and cost effective to capture in well diversified portfolios.
The equity portion of Consilium portfolios tilts towards four such factors — the market, value, size and profitability factors.
In harnessing the robust evidence contained in market history and by consistently implementing investment strategies in a highly efficient way, Consilium portfolios utilise the best attributes of active and passive strategies by focusing on:
