Concentrated yet diversified: An approach to global equity investing

As we move further away from the financial meltdown in the autumn of 2008, investors are once again focused on investment returns, leading to the consideration of higher alpha approaches to global equity investing.

Concentrated portfolios can offer a number of benefits, which we believe should enhance an active manager’s ability to add value. With a focused number of holdings, analysts can spend more time conducting in-depth research on each holding. In our view, the depth of research facilitated by a focused approach can also support a higher degree of conviction in portfolio holdings, potentially enabling the manager to realise the full value of an opportunity despite volatile markets. Nonetheless, concentrated equity portfolios can be prone to a variety of additional risks. Such portfolios have ...