Investment Strategy Navigator:
Vector Navigator is a long-only equity fund. It systematically screens global equity markets in search of undervalued stocks. It does so using an in-house developed quantitative model. The model is designed to identify stocks with better than average growth, risk and valuation properties. In total 3000 companies are tracked on a daily basis. Out of this vast universe, we construct a portfolio of around 80 companies, that is well diversified across sectors and regions. The fund’s objective is to outperform the MSCI World Index. Since inception, Navigator has succeeded in doing so every year – with 2008 being the only exception to the rule. Over the last 10 years, the average annual outperformance versus the funds’ benchmark stands at exactly 4%.
Investment Strategy Flexible:
In the long term, equity markets tend to outperform bond markets. Or rather they should, according to financial theory. In real life, things are more complicated. After all, markets (and equity markets in particular) have shown to be very irrational at times. They can rise well above what any rational mind would consider to be “fair value”, and drop well below what the darkest pessimist had imagined. And they can even do both in less than a decade, as anyone who owned stocks between 2000 and 2008 can testify. If you started off on the wrong end of fair value, it becomes very hard indeed to outperform bond markets. That‘s why we’ve set up Vector Flexible.
In Flexible, when we think equity markets will perform well, we invest our assets according to the same methodology as Navigator, the oldest compartment within Vector. We screen global equity markets in search of undervalued stocks, and do so using an in-house developed quantitative model. This stock-picking model has outperformed the market with 4% in the past, and is designed to identify stocks with better than average growth, risk and valuation properties. Out of a vast universe, we construct a diversified portfolio of around 80 companies, that is well diversified across sectors and regions. But when we think equity markets might not perform that well, we will reduce our equity exposure in Flexible, possibly to 0%. This decision is based on the outcome of a quantitative decision process, that is designed to compare current market conditions to 55 years of detailed financial history, so as to place present conditions in historical perspective, and make a well-informed judgment about the direction of the markets. Our quantitative tool is based on 15 factors in total:
• 5 macro-economic factors (such as newly authorized Building Permits)
• 5 technical factors (such as the 200-day moving average of the S&P500)
• and 5 valuation factors (such as the current risk premium on equities versus bonds)
Vector Flexible has an absolute-return target, its first priority being capital-preservation.
Investment Strategy Top Managers Mixed:
In Vector Top Managers Mixed, we invest in a dozen of mostly mixed (minimal 70%) funds that we consider to be well managed. A mixed fund is free to invest in different asset-classes such as equities, bonds, cash, and alternative assets (gold, real estate,..). With the right timing, a mixed fund can add considerable value by shifting between risky assets (such as distressed equities) and less risky assets (such as top-rated bonds or cash).
Of course, as you would expect, not a single fund manager has succeeded in getting the timing right àll of the time. But through the years, some managers have been able to stand out nevertheless, thanks to either superior allocation-strategies or a refined selection of specific investments, or both.
Vector Top Managers Mixed performs an ongoing evaluation of this part of the financial market place, selects the best of breed, negotiates financial conditions with them to the exclusive benefit of our shareholders, and assembles them into one stable fund with above average expected returns.