Arrowstreet

Smarts at scaleArrowstreet

Global equities

The unrelenting machine that seizes opportunity.

In our ever-changing world, it pays to be ahead of the curve. Arrowstreet have a huge team of specialists with unique investment insight, they forecast with conviction and go wherever they need to go to find the best performance.

Continually researching, searching, seizing, evolving. They do all the work for you in global equities. It’s the foundation of your portfolio that you don’t have to manage because Arrowstreet manages itself. Very, very well.

Running time: 1:14 min.

Why Arrowstreet for global equities?

Broader

Unrelenting machine

Data-driven, not data-led. Arrowstreet uses quantitative tools to apply their investment ideas at scale across a stock universe of over 10,000 companies globally.

This approach allows Arrowstreet to identify and keep track of hidden company relationships across sectors, countries, and supply chains – connecting the dots to capture return opportunities that others miss.

Systematically acting on insights in a highly disciplined repeatable manner, the powerful Arrowstreet machine does the heavy lifting of investing for you.

Deeper

Ahead of the curve

To beat the benchmark, you can’t be the benchmark. Arrowstreet moves away from the index to focus on finding ‘winners’ and avoiding the ‘losers’, and by acting at speed and scale, they seek to profit from opportunities here and now.

Leaning into the less obvious, they forecast with conviction to act before the wider market. Arrowstreet believes active management must be dynamic, and unapologetically shifts the portfolio to wherever their signals lead them.

Arrowstreet brings the active to active management.

Historical active positioning of the Arrowstreet Global Equity Fund, in the United States and in the Health Care sector, relative to the MSCI All Country World Ex Australia Index

+/- 10% country limit

United States sector

+/- 15% sector limit

Health care sector

Past performance is not a reliable indicator of future performance. Source: Macquarie, FactSet, MSCI (see appendix), for the period from 31 December 2013 to 30 September 2022. Active positioning is measured against the MSCI All Country World Ex Australia NR Index in AUD, which is the Benchmark of the Fund. The Fund has an active weight limit of +/-10% for countries and +/-15% for global sectors, relative to the Benchmark.

Faster

Stay strong

Change brings challenge, but also opportunity. Traders get faster and data sets get larger. The ideas and strategies that worked in the past won’t necessarily work in the future. Equity managers must evolve or risk fading into irrelevance.

Arrowstreet understands this. With over 100 investment professionals they continually work on finding new signals, new connections between companies and new ways to trade more efficiently. Innovation is not optional.

What doesn’t change is Arrowstreet’s resolve to deliver excellent results for clients.

Some of the recent areas of focus for Arrowstreet’s research have included:

(Please click the below tabs to explore more about the topics)

There are three types of market inefficiency that create opportunities for active managers: informational, where ‘faster’ investors can react to new information more quickly than the market; behavioural, where investors act on the same information but disagree on the interpretation, with some investors subject to biases; and constraints, where some investors are constrained from making optimal decisions leading to exploitable market inefficiencies. The main threat to active managers is competition, from those seeking to similarly exploit these opportunities. Arrowstreet focuses its research on identifying new opportunities, particularly unique signals, while appropriately reducing the weights placed on signals identified as having become crowded.

The increasing popularity of an investment style, such as value, quality, and price momentum, changes and likely increases the risks associated with that investment style. Arrowstreet are cognisant of the risks of getting caught in “crowded trades” and strive to produce alpha not tied to ‘commoditised’ sources of outperformance. Arrowstreet use several methods to avoid large permanent style tilts in their portfolio, while taking tactical style tilts when those tilts are expected to be rewarded.

“Big data” can be defined as difficult data, due to its size, complexity or its level of ‘noise’. But the difficulty of big data typically comes from collecting, storing and making it flow – data engineering – rather than from data analysis. For fundamental managers able to solve these issues, big data analytics can add significant value. Arrowstreet most notably uses big data within its expanded linkages model to identify economically related companies – with 10,000+ stocks in the investable universe, Arrowstreet needs to forecast the relatedness of over 50,000,000 pairs of stocks over time.

Successful active management – or generating a positive excess return after fees, relative to a passive alternative – requires overcoming four key obstacles: market efficiency, or the assertion that all relevant information is already reflected in prices; the zero-sum nature of active investing, with an active ‘loser’ for every active ‘winner’; the difficulty of distinguishing luck from skill; and diminishing returns to scale for managers. Through quantitative tools, Arrowstreet seeks to identify investor behaviour driving prices from efficient levels and that can be exploited by active management, while carefully monitoring performance drivers, transaction costs, and capacity within its strategy.

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About Arrowstreet

Over a decade of proven experience, outperforming in different market conditions. Arrowstreet manages over US$121 billion AUM1 globally and has garnered a reputation for strong results using their quantitative approach. Put simply, they implement fundamental investment ideas at scale.

1as at 30 September 2022

Find out more about the
Arrowstreet Global Equity Fund

Visit the Fund page

Risks - Arrowstreet Global Equity Fund

All investments carry risk. Different investments carry different levels of risk, depending on the investment strategy and the underlying investments. Generally, the higher the potential return of an investment, the greater the risk (including the potential for loss and unit price variability over the short or long term). The risks of investing in this Fund include:

Investment risk: The Fund has exposure to share markets. The risk of an investment in the Fund is higher than an investment in a typical bank account or fixed income investment. Amounts distributed to unitholders may fluctuate, as may the Fund’s unit price. The unit price may vary by material amounts, even over short periods of time, including during the period between a redemption request or application for units being made and the time the redemption unit price or application unit price is calculated.

Market risk: The investments that the Fund has exposure to are likely to have a broad correlation with share markets in general. Share markets can be volatile and have the potential to fall by large amounts over short periods of time. Poor performance or losses in domestic and/or global share markets are likely to negatively impact the overall performance of the Fund.

International and emerging market risk: The Fund may have exposure to a range of international economies, including emerging economies. Global and country specific macroeconomic factors may impact the Fund’s international investments. Governments may intervene in markets, industries, and companies; may alter tax and legal regimes; and may act to prevent or limit the repatriation of foreign capital. Emerging markets in particular may experience lower liquidity, the potential for political unrest, the increased likelihood of sovereign intervention (including default and currency intervention), currency volatility, and increased legal risk. These events may impact the Fund’s international investments.

More information on the risks of investing in the Fund is contained in the Product Disclosure Statement, which should be considered before deciding to invest in the Fund.

Arrowstreet Global Equity Fund
Download the Product Disclosure Statement

Important information: Arrowstreet Global Equity Fund, Arrowstreet Global Equity Fund (Hedged) and Arrowstreet Global Equity No. 1 Fund are designed for investors who are seeking capital growth, intending to use the Fund as a core component or satellite within a portfolio, have a medium to long-term investment timeframe, have a high or very high risk/return profile and require the ability to have daily access to capital. Please review the Target Market Determination available at macquarieim.com/TMD and consider if the Fund may be suitable for you.