Robeco, The Investments Engineers

Quant Investing

Low volatility investing

Conservative equities is our active approach to low volatility investing. It is based on the anomaly that low-risk stocks tend to deliver a higher risk-adjusted return than high-risk stocks, contrary to classical finance theories. An approach that leads to a portfolio that offers stable equity returns and tend to generate high dividends.

Guide to Conservative Investing


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2006

start of proven track record

2.8%

risk-adjusted outperformance (as of June 2022*)

12.8bn

EUR assets (as of June 2022)

* The risk-adjusted outperformance is defined as Jensen’s alpha against the MSCI World Index (net return), based on monthly investment returns in EUR, gross of fees, for Robeco QI Institutional Global Developed Conservative Equities as a representative of the strategy. In reality, management fees and transaction and other costs are charged. These have a negative effect on the returns shown. The value of your investments may fluctuate. Results obtained in the past are no guarantee for the future.

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Stable equity returns tend to come with high income

We think it is unwise to select stocks purely based on risk considerations, ignoring the price you pay for them. This is why we also consider valuation and momentum factors to enhance returns. This approach leads to a portfolio that offers stable equity returns and tends to generate high dividends.

  • Dividends are a significant and stable source of equity returns

  • Dividend yield is one of the most defensive measures of value

  • High dividends help enhance long-term returns and limit drawdowns


Defensive Equities

Winning by losing less

More about this strategy

Winning by losing less in down markets

Better capital preservation can be achieved due to a significant reduction of losses during down markets. In a very bullish environment, the strategy could lag the overall market, while still delivering solid absolute returns. Once the market recovers, low volatility stocks have to make up less lost ground.

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The average return series are based on the gross asset values of Robeco QI Institutional Global Developed Conservative Equities since inception (October 2006) until June 2022, gross of fees, based in EUR. In reality, management fees and other costs are charged. These have a negative effect on the returns shown. The fund and its reference indices have been hedged for currency risk since 30 June 2012. The value of your investments may fluctuate. Results obtained in the past are guarantee for the future.

How to apply the Conservative strategy in a portfolio

Risk reduction

A pension fund with a low funding level after the financial crisis replaced conventional equities with Conservative equities to reduce risk while not giving up equity returns.

Income generator

A bank decided to include Conservative equities in its defensive income model portfolio, as the strategy combines high dividend yield with lower downside risk.

Diversification

A family office added the Conservative equity strategy to its portfolio of higher risk equity funds, in order to stabilize the overall performance.

Sustainability integration

An environmentally aware pension fund wanted to limit the ecological footprint, increase the ESG profile and reduce risk and therefore invested in the connservative sustainable equity strategy.

Proven track record

For over ten years, we have been offering a distinctive approach to low-volatility investing, based on award-winning research.

  • First multi-factor models developed in 1994

  • First Conservative equity strategy launched in 2006

  • A wide range of strategies: global developed, European, emerging, all countries, US and sustainable


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