Understanding the IOOF QuantPlus investment philosophy

IOOF QuantPlus is a specialist team within  our IOOF investments division dedicated to delivering solid consistent returns  through efficient exposure to a highly diversified portfolio of assets. Simply  put – we employ a number of proven techniques to deliver a well-diversified  portfolio whilst considering the optimal risk and return outcome.

Investment approach

Before we combine asset classes we undergo  a comprehensive process of structuring the underlying components. We begin with  an investment universe of all listed shares in each country and filter out  those that don't meet our stringent risk requirements. This is our quantitative  step and lays the foundation for the investment approach. After the foundation  is set – we look at the quality of the individual stocks, otherwise referred to  as qualitative analysis. After the stocks are selected we use a variety of trading strategies with the objective of delivering you solid consistent  returns.

Essentially,  we consider all the factors that go into investing and that's why some people  refer to this investment methodology as factor investing.

We believe in this process – after all it's  our team that developed it and therefore we are the pioneers of this approach within  single diversified asset class vehicles.

1. Quantitative modelling - Our foundation is laid with the  development of a diversified portfolio with risk-based factor exposure

We process a large opportunity set of shares in order to identify and exclude companies with risk characteristics that fail to meet our strict portfolio eligibility criteria. We then structure the portfolio by determining an optimal exposure to various size and value factors that we determine within established risk and return parameters.

2. Qualitative analysis - We overlay with practical considerations

Exposure to small capitalisation and value style shares requires careful consideration. In particular these shares may be vulnerable to liquidity risks, exhibit poor performance or be in severe financial difficulty. A core part of the portfolio management team's responsibility is evaluating the eligibility of these shares to contribute to an appropriate factor exposure.

3. Trading and execution strategies - To ensure efficiencies in costs which contributes to performance

Maximising returns is not a purely passive exercise. The IOOF QuantPlus framework ensures we consider transaction costs and tax implications when determining and executing trades. Having a well-structured and diversified portfolio means the trading window can be prolonged and turnover kept low. A significant part of the IOOF QuantPlus trading strategy is use of cutting edge trading technology and accessing alternative liquidity sources.

Looking for more information? 

Click here to view our investment brochure.

Click here to view the quarterly reports.