In most cases we believe that good companies deliver superior investment performance over time. However, there may also be opportunities for success by investing in companies which benefit from external dynamics. These dynamics might stem from developments in the economy, society, innovation from within the industry itself or from the way which investors value companies.
An additional element is the incorporation of risk management throughout the investment process, consistent with our objective of achieving competitive risk adjusted returns.
We pursue these objectives using a combination of fundamental and quantitative tools.
Active equity portfolios are managed by specialized, focused teams to create dynamic, decisive investment processes within specific mandate areas. Capabilities include:
- International Equities - A research driven strategy seeking to identify best in breed companies within industry groups and sectors most likely to benefit from developments in the global economic environment. Geographical concentrations include global and world ex-U.S. mandates.
- U.S. Growth Equity – A large cap strategy driven by the combination of a top – down view of macroeconomic trends and individual stock selection based on seeking the intersection between growth potential and financial quality.
- U.S. Value Equity – A large cap strategy based on fundamental research to identify companies selling at substantially less than their intrinsic value with identifiable catalysts to drive re-valuation over time.
- U.S. Small Cap Equities – Quantitative Value- and Core style strategies based on the disciplined application of fundamental analysis using quantitative methods for stock selection, portfolio construction, and risk management.
- Specialty mandates - We manage assignments focusing on:
- Income Equity: hybrid equity / convertible bonds striving for equity – like exposures with enhanced income and reduced volatility;
- Innovation / Technology;
- Socially Responsible Investments.
Active Fixed Income
We recognise that institutions and eligible professional investors have access to a broad array of fixed income strategies. At Northern Trust, our objective is to provide liquid, diversified and value-oriented portfolios to meet the risk/return needs of our clients. As one of the first relative value-based fixed income managers, our approach to fixed income investing offers such distinct advantages as our proven philosophy, our focus on consistency and our experience.
Proven Investment Philosophy
We manage portfolios to emphasise areas where we believe our clients are more than adequately compensated for the risks of moving from benchmark exposures. Our focus is on strong risk management and an intensive credit selection process. The results have been superior risk-adjusted returns.
Focus on Consistency
Our approach to active fixed income management is based upon consistency. We incorporate key elements of a bottom-up strategy, focusing on identifying relative value at the issue and sector level, while closely monitoring and controlling portfolio risk relative to a client-selected benchmark.
Our experienced team of portfolio managers is supported by our proprietary credit research group, and uses state-of-the-art technology to support quantitative decision making.