Winners rationale

Buoyed by the improving global economic outlook and healthy corporate profits, 2017 was a banner year for US equities, with the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices all notching up their best annual performances since 2013.

While the US is the second longest-running bull market in history, the strong performance has also led to increased market concerns that its stocks may be overvalued, underlining the case for private banking advisors to seek strategies that may deliver consistent and repeatable performances for clients.

Robeco’s three unconstrained US value equity strategies, managed by its sister company Boston Partners, may make a compelling case for Asian clients under the prevailing market environment.

A cohesive team known for its longevity, Boston Partners subscribes to a consistent, bottom-up investment philosophy that sees its investment process grounded in a few absolute ‘fundamental truths’.

Boston Partners’ approach begins with value investing, subscribing to the idea that value is an investable anomaly in that low valuation stocks outperform high valuation stocks over time. Its next fundamental truth is focused on business fundamentals, ensuring that portfolios are populated with high quality companies that produce attractive returns on capital among other measurements.

Lastly, Boston Partners’ investment team seeks to source ideas that have strong business momentum, measured by developments such as rising earnings estimates or the presences of catalysts that could materialise over the investment horizon.

These rules, which the investment manager embraces to limit downside risk, anchor the team’s portfolio construction process. Its other tenets to live by include preserving capital and maximising the power of compounding.

According to the brand’s bottom-up portfolio construction process, the Boston Partners team begins its work with quantitative scoring and screening to cull a target-rich subset universe, where it looks for companies that will fit into its ‘Three Circle’ characteristics of valuation, fundamentals and momentum.

The Boston team reportedly scores some 10,000 stocks worldwide every week – a process that is said to enable it to efficiently identify strong candidates while providing it with a roadmap for its fundamental research.

While a centralised research team of fundamental and quantitative analysts supports the portfolio managers and the firm’s value equity discipline, it is the portfolio managers of Boston Partners that have final say on the allocations.

When it comes to responsibility ownership, Boston Partners says that every investment professional is accountable for the selection that goes into its portfolios.

As a result of the convictions and the effort embedded in its investment processes at Boston Partners, Robeco is Asian Private Banker‘s Best Fund Provider – US Equity in 2018.