We believe in building portfolios which are a diversified concentration of the best research ideas we can find. We can only have a limited number of strong convictions per year and need to capitalise on these to target outstanding performance to our clients. By monitoring the contribution of each idea to the diversification to the portfolio, we control the overall risk of our books. The risk-adjusted return potential of each investment is reviewed daily and only the best investment ideas remain in the portfolio.
Our portfolio is made of best ideas only: 20/30 companies which we think offer the most attractive risk/return profile
We keep a balanced exposure to cyclical, growth, defensives, financial themes and limit exposure to a single industry
We invest in temporarily unloved companies that we think are undervalued despite strong fundamentals
Our portfolio looks and feels different. It brings both performance and highly valued diversification to investors
Why Zadig is different
The comfort bias
We think there is a comfort bias in the market, and investors overpay for perceived safety. We are often contrarian in our approach; the Memnon European Equity portfolio is made of companies that are undervalued due to investors’ perception of risk and the companies offer attracting risk/return profile as a result. Our aim is to understand the path to recovery and how market participants will reevaluate the company as a results of business improvement.
LIMITED FACTOR EXPOSURE:
At all times, the Memnon European Equity portoflio keeps a balanced exposure to cyclical, defensive, growth companies and we carefuly monitor and limit factor exposures (value, growth, momentum, etc.) through advanced proprietary quantitative analysis. By limiting the portfolio’s exposure to broad factors the performance can not be replicated by ETFs, even the smart ones!
We bring diversification
By avoiding consensual investments, the Memnon European Equity portfolio looks and behaves differently from competitors, offering welcome diversification to our investors. The correlation of the portfolio’s performance with peers is low, making the fund a truly diversifying asset for European Equity allocators.
Diversification vs Concentration
For our portfolio
More important than the number of holdings is the fact that we carefully assess how each portfolio holding behaves differently from others, lowering the tracking error of the strategy as a result despite a very high active share.
For our investor's portfolios
Investing in top performing strategies is critical, however investing in strategies that behave differently is a great way to lower the risk of the portfolio and increase ‘risk-adjusted’ performance.
A careful diversification of holdings lowers the risk of concentrated portfolios.