Evolve Fund Managers believe in a Bottoms-up valuation approach to our underlying single asset managers, which means that we first focus on the companies in question before taking into consideration the industry or macro economic factors. We believe that the opposite Top-down valuation approach is too risky and unreliable. This approach requires the fund manager to accurately calculate the growth in GDP figures with having to deal with too many factors that influence it. An accurate calculation is nearly impossible to do since too many assumptions of assumptions usually make information inaccurate and even worthless. We therefore say: "Simplicity is seldom the ultimate sophistication".
Evolve Fund Managers furthermore believe in a value investing approach, whereby stocks are bought at less than their intrinsic value. A clear distinction is made between the price and the value of a stock or an asset. Value is what we calculate an asset to be worth whilst price is what the market is prepared to pay for it. At times the value and the price are the same but often they are different. Evolve Fund Managers only become interested in a stock when the price is substantially lower than its value.
Generally investment managers are limited to certain specific mandates and therefore they will not likely be able to outperform the market over all time periods and in all market conditions. Different investment managers have different alpha (excess return of benchmark) sources, which are relatively successful in different time periods, market conditions and environments. We therefore argue in favour of multi management whereby we actively manage the different asset classes. The tax benefit of not triggering the tax liability by switching between portfolio`s is then enjoyed. The certainty of portfolio outcomes over the target investment horizon is maximised by the use of the multi manager approach where portfolios are constructed and managed at the highest level for the client.