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Introduction to Equities
Equity is a share in the ownership of a company. Equity represents a claim on the company's assets and earnings. As you acquire more equity, your ownership stake in the company becomes greater. Whether you say shares, equity, it all means the same thing. By investing in equities you are providing the company with capital which enables them to grow. Compensation comes in the form of income returns which are paid out of profits and capital returns which are a result of the share price increasing.
There are two main approaches to equity investing:
The goal of indexation is to replicate the index. Therefore the return is the market return and the risk is the market risk. Indexation delivers consistent and predictable performance in an efficient and cost effective manner. By investing in equities on an indexed basis, investors eliminate individual manager, stock selection and style risk.
Active equity investing aims to outperform the index. Holdings in an active equity fund differ from the benchmark due to fundamental and quantitative analysis. The rationale for active equity investing is the belief that markets are inefficient and it is possible to identify and exploit these inefficiencies to deliver a higher return to compensate for the additional risk.
There are many different styles to equity investing including:
- Value vs. Growth,
- Large Cap vs. Small Cap
- Bottom Up vs. Top Down
- Quantitative vs. Fundamental
ILIM’s Equity business is comprised of focused teams of highly experienced, specialised individuals managing equity mandates on an active and indexed basis. We are committed to continuous innovation in our product development, investment processes and approach to risk management. Our equity offerings span the risk/return and geographical spectrum:
- Global (Developed/Emerging Market)
- Market Capitalisation Focus
- Minimum Volatility
- Alternative Indexation/Fundamental Indexation
- Ethical Investing/ ESG Exclusions
- Currency Hedging Options