ACTIVE EQUITIES
In the long term, we believe most markets are efficient but short term inefficiencies do exist and can be exploited by active managers in order to add value to investors’ portfolios.
LGIM is a large investor in most global markets and our UK equity investments make up almost 5% of the FTSE All Share. Our scale gives us a clear advantage as an active manager:
- We have excellent access to the management of companies in the main indices in which we invest
- We are an important influencer in shaping the corporate governance of many listed companies
Our Approach
We believe that no single approach to active management satisfies all equity markets. The investment processes we have in place have been carefully designed to exploit local inefficiencies in each market.
For this reason, our regional teams are given a high level of autonomy and each desk has the freedom to reflect local themes when constructing portfolios. This flexible approach operates within a well-defined risk framework, which aims to deliver the required investment objectives within agreed risk levels.
The construction of our funds reflects the best ideas of our team without undue sector or individual stock constraints. Each fund has appropriate parameters, but across our portfolios the managers only invest in stocks where they have very high levels of conviction. Ours is a team approach rather than relying on the skills of one individual. This process is designed to encourage debate and discussion and we believe that this results in better and more informed decision-making.
