Article

Equities – thinking differently can make a big difference

November 16, 2018

The status quo of active equity management is not delivering. Although it is difficult to outperform equity markets, it is not impossible. But how can asset owners be successful in active management?

We believe that in order to help generate better returns than the crowd we must go beyond typical approaches. We have therefore established our equity investing beliefs to get more from active equity managers.

Willis Towers Watson’s equity investing beliefs:

  • We believe that genuinely skilled managers exist. We invest significant time and effort in identifying them.
  • We believe that high active share and concentrated portfolios are advantageous. Academic research supports this.
  • Our expectations of success rise when investors engage with investment managers to deliver better outcomes.
  • Portfolios can be more robust when they are diversified across many managers with different approaches and specialties.
  • We believe in accessing a broad opportunity set through unrestricted global mandates.
  • Contrarian portfolio management can potentially add to long-term returns. Investors should be willing to add capital to underperforming managers and take it away from strong outperformers.
  • Cost matters. We seek to deliver value for money by using our scale to reduce cost and using our influence with managers to create bespoke, cost effective products.

Our best ideas in equities already form a core part of the portfolios of our delegated clients, whether via a fiduciary arrangement or our pooled solution. For other clients, we would be delighted to discuss ways to help reap the potential benefits of investing in these assets.

Download our brochure to learn more about our Better Equities approach to active equity investment.

Disclaimer

The information included in this presentation is intended for general educational purposes only and should not be relied upon without further review with your Willis Towers Watson consultant. The information included in this presentation is not based on the particular investment situation or requirements of any specific trust, plan, fiduciary, plan participant or beneficiary, endowment, or any other fund; any examples or illustrations used in this presentation are hypothetical.

Willis Towers Watson is not a law, accounting or tax firm and this presentation should not be construed as the provision of legal, accounting or tax services or advice. Some of the information included in this presentation might involve the application of law; accordingly, we strongly recommend that audience members consult with their legal counsel and other professional advisors as appropriate to ensure that they are properly advised concerning such matters. Additionally, material developments may occur subsequent to this presentation rendering it incomplete and inaccurate. Willis Towers Watson assumes no obligation to advise you of any such developments or to update the presentation to reflect such developments.

In preparing this material we have relied upon data supplied to us by third parties. While reasonable care has been taken to gauge the reliability of this data, we provide no guarantee as to the accuracy or completeness of this data and Willis Towers Watson and its affiliates and their respective directors, officers and employees accept no responsibility and will not be liable for any errors or misrepresentations in the data made by any third party.

This document may not be reproduced or distributed to any other party, whether in whole or in part, without Willis Towers Watson’s prior written permission, except as may be required by law. In the absence of its express written permission to the contrary, Willis Towers Watson and its affiliates and their respective directors, officers and employees accept no responsibility and will not be liable for any consequences howsoever arising from any use of or reliance on the contents of this document including any opinions expressed herein.