Investment Philosophy

Our Disciplined Approach

Our strategic focus on active asset management is designed to manage investment risk and provide more consistent returns. Five investment principles guide our disciplined approach, offering investors a high level of diversification across multiple asset classes.

We believe that a rigorous, repeatable investment process is the foundation of long-term success. Each principle builds upon the last, creating a comprehensive framework for portfolio construction and management.

Five Investment Principles

Five investment principles guide our disciplined approach, offering investors a high level of diversification across multiple asset classes.

Set a Firm Foundation with Asset Allocation

Combining top-down macroeconomics with bottom-up underlying investment perspectives to build well-diversified portfolios linked to investor goals.

Create boundaries for portfolio risk exposure and return potential
Identify important market inflection points
Systematically consider risk arising from the sizing of active decisions
Apply general investor risk preferences to all aspects of the investment process

Diversify Wisely with Active Portfolio Design

Taking a multi-dimensional approach to portfolio construction, combining different asset classes, geographic regions, and investment styles.

Create portfolios designed to deliver consistent long-term results in line with investor goals
Balance growth and defensive assets strategically

Select and Evaluate Leading Managers

Developing forward-looking expectations regarding execution in different economic environments.

Select managers using a process that differentiates manager skill from luck
Aim to have the best managers in the portfolios at all times
Evaluate investment managers using a common framework, within and across disciplines
Manage due diligence and selection process with rigorous oversight

Keep Investments on Track with Active Portfolio Construction and Management

Hiring managers directly for specialized mandates and using a manager-of-managers approach to implement strategic changes more cost-effectively.

Actively measure and allocate to each manager based on their risk allocation
Ensure consistency between managers' investment styles and their assigned objectives

Actively Manage Risk

Operating risk management separate and independent from investment strategy.

Focus on common risks across and within asset classes
Maintain disciplined risk oversight throughout the investment cycle

Performance Driven

Our investment philosophy is built on the belief that active management, when executed with discipline and rigor, can deliver superior risk-adjusted returns over the long term.

We do not chase short-term trends. Instead, we focus on building durable portfolios that can weather market cycles and deliver consistent results aligned with your investment objectives.

Important Disclosures

There are risks involved with investing, including loss of principal. Diversification may not protect against market risk. There is no assurance the goals of the strategies discussed will be met.

For those Stem Investment Consultants (Pty) Ltd Funds which employ the "manager of managers" structure, Stem Investment Consultants (Pty) Ltd has ultimate responsibility for the investment performance of the Funds due to its responsibility to oversee the sub-advisers and recommend their hiring, termination and replacement.