BNPP AM's Global Equity investment process has been substantially revised since 2004, and further enhancements will continue to be introduced over the next few years.
With the same focus on pragmatism that drives the development and implementation of all its products, the International Equity Investments group is designing an investment process which acknowledges the specificities of each market/region where it is investing. For this purpose, methodologies and investment ideas are directly sourced from the company's best specialists of each market.
Investment discipline in geographic allocation
The general structure of the portfolio is determined by a geographic allocation among five main zones: US, Europe ex-UK, UK, Japan and Asia. A quantitative tool is used to enhance discipline, and avoid the detrimental effects of emotion in an area where patience is often needed before a strategy proves fruitful. The fund management team retains some leeway in defining the final details of the strategy, but can't go against the tool's recommendations.
The research carried out to manage the company's flagship products in the various markets directly impacts the Global Equity strategy. Stocks for this strategy are selected among the best ideas identified by each specialised investment team for its own portfolios. The process thus benefits from all the research, both quantitative and judgmental, carried out in those teams to deeply understand their respective markets, customise parameters such as investment style or stock selection criteria accordingly and eventually identify the most attractive stocks.
While the specialised knowledge of each zone is contributed by a specialist of that market (in most cases, the lead manager of the corresponding strategy), the process is designed to ensure that the Global Equity product is managed as a whole portfolio rather than a juxtaposition of sub-portfolios managed independently. For this purpose, two Global Equity portfolio managers are ultimately responsible for investment decisions, which are all made in a committee involving all market specialists, so that all contributors acquire a global understanding of the portfolio's exposures in the various markets.
