Investment Style for Excess Returns
Investment style should be used to seek excess returns.
Strategic asset allocation is not just about minimising risk; it is also about maximising rewards. This is achieved through investment style - by selecting the assets most likely to generate excess returns over time. To identify the most successful investment styles, we look to the academic evidence.
This shows that to achieve the greatest compensation for risk, it is advisable to have an over weight of value, small cap and momentum stocks.