Quality Low Volatility
Built in an attempt to strengthen a portfolio’s equity allocation by seeking to deliver more consistent equity returns, targeting 20% to 30% less volatility than the broad market.
We believe investors should be compensated for the risks they take — in all market environments and any investment strategy.
Overview
Portfolio Resilience When Markets Stumble
Investors face difficult and long recovery periods after large market declines; and while this is not news to any professional investor, it is becoming a more frequent challenge to manage. We built this strategy in an attempt to help strengthen equity portfolios by investing at the intersection of higher-quality, lower-volatility stocks that seeks to limit losses when the market declines, ultimately enhancing risk-adjusted performance over time.Potential for Portfolio Protection When Markets Decline
Potential Return Consistency though Full Market Cycles
Transparent Active Management at a Lower Cost
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Principles of Investing
Focus on Persistent Sources of Excess Return
Our strategies target systematic sources of excess return that have been proven over long periods.
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Principles of Investing
Seeking to Improve Risk-Adjusted Returns by Integrating a High-Quality Foundation
The inclusion of a proprietary quality factor roots our security selection process in strong company fundamentals and has shown to potentially improve risk-adjusted returns over time.
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Potential Improvements in Sharpe Ratio for Factor-Mimicking Portfolios Driven by Addition of the Quality Factor
Source: Morningstar, Northern Trust Asset Management.December 31, 1996 to June 30, 2023. Past performance is no guarantee of future results. Index performance returns do not reflect any management fees, transaction costs, or expenses. It is not possible to invest directly in any index. Indexes are the property of their respective owners, all rights reserved.
Principles of Investing
Utilize a Systematic Approach to Maximize Efficiency
Generating excess returns is important but risk and cost effectiveness are critical. We believe utilizing a systematic investment approach enables our strategies to seek to deliver on all three objectives consistently.
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A Systematic Approach Maximizes Efficiency
Past performance is no guarantee of future results. Index performance returns do not reflect any management fees, transaction costs, or expenses. It is not possible to invest directly in any index. Indexes are the property of their respective owners, all rights reserved.
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How it works
Target High Quality Companies with Less Volatility than Peers
Our team identifies companies that exhibit specific cash flow, profitability and return on capital attributes that also demonstrate lower volatility then peers.
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How it works
Establish Risk-Controls That Protect Against Uncompensated Risks
Strict risk controls are set around taking large portfolio over- or under-weights to sectors, regions or currencies, which have historically proven not to increase risk-adjusted returns over time.
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How it works
Construct a Portfolio That Minimizes Total Risk
Carefully screened high quality, low volatility stocks are used to construct a portfolio designed to generate the highest possible return for the lowest level of risk.
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How it works
Optimize Portfolio to Balance Risk, Return and Cost Objectives
A final stringent review and optimization is conducted to verify the portfolio maximizes exposure to high quality and high income characteristics and seeks to minimize any excess risks that don’t contribute to outperformance.
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Contact Us
Interested in learning more about our investment strategies?
All securities investing and trading activities risk the loss of capital. Each portfolio is subject to substantial risks including market risks, strategy risks, advisor risk, and risks with respect to its investment in other structures. There can be no assurance that any portfolio investment objectives will be achieved, or that any investment will achieve profits or avoid incurring substantial losses. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Risk controls and models do not promise any level of performance or guarantee against loss of principal. Any discussion of risk management is intended to describe NTAM’s efforts to monitor and manage risk but does not imply low risk. This information is general in nature and should not be construed as tax advice. Please consult a tax advisor or professional as to how this information may affect your particular circumstance.
Not FDIC Insured | May Lose Value | No Bank Guarantee
Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, Northern Trust Asset Management Australia Pty Ltd, and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.
