Active International Allocation Strategy

Active International Allocation Strategy

Active International Allocation Strategy


The Active International Allocation (AIA) Strategy seeks long-term capital appreciation. The investment team relies on a proprietary, top-down framework to quantitatively and qualitatively rank developed and emerging countries, where allocation decisions are based on a country's projected future economic growth and equity market return potential. The approach combines country analysis with sector allocation and bottom-up stock selection, where investment decisions are implemented either through sector, industry or stock-specific allocations within and across markets. Investments are based on fundamental analysis, in an effort to identify those equities that stand to benefit the most from the team's investment view.

Investment Approach

The investment team believes that the key determination of successful investment in international equity markets is the choice of region, country and sector/industry. Thus, the team analyzes regions, countries, sectors and industries. It believes that macro investment factors can be just as potent as bottom-up investment factors. Though bottom-up investing can be attractive, the team believes that corporate managements and stocks will be impacted by economic growth, fiscal and monetary policy decision-makers and overall moves in investor sentiment. This strategy offers clients a diversified way of investing and a diversified portfolio.

A diversified portfolio

Complementing the more widely available bottom-up core investment capabilities, the AIA team has a top-down approach that informs clients of  important drivers of economies and markets. The AIA team strives to build portfolios that are well-diversified with limited stock-specific risk.

Continuously evolving quantitative and qualitative analyses

The team continues to expand the array of quantitative indicators they analyze across regions, countries, sectors and industries. These indicators provide insight into marginal changes in the team’s three factors for an investment decision: fundamentals, valuations, and sentiment.

Investment Process
Fundamental Change

The catalyst for market performance can be marginal changes in economic, corporate and political environments. The team gains market insight by visiting countries, meeting with central bankers, government officials, strategists, and economists, and analyzing both internal and external research to form investment opinions. In particular, the team searches for incremental shifts in policy or the operating environment, which they believe will impact profitability.


Valuations are the core of the team’s decision-making process as the team invests in undervalued countries and sectors. The team analyzes and monitors relative and absolute valuation relative to long-term historical data across asset classes, regions, countries and sectors. The team then ranks the markets and sectors/industries on relative attractiveness and consistently examines ranking changes.


Overall market sentiment of particular countries and sectors/industries can be an important indicator of risk and return. The team consistently monitors global investor sentiment indicators, global fund manager asset allocation and equity positioning, and cross- and intra-asset global portfolio flows.

Portfolio Implementation

To implement investment decisions, the team builds baskets of stocks selected by a risk model, which does not factor in bottom-up analysis of names and is designed to broadly track country or sector/industry performance. The team invests in a diversified selection of stocks in the country, sector or industry.