Aeon Active Equity Prescient Fund

Investment Philosophy

Aeon Investment Management’s equity investment style is that of Growth At a Reasonable Price (GARP). Our adaptation of the GARP style seeks to combine the best of growth and value investing, by buying companies with sustainable growth rates greater than that implied by the company’s market valuation.

The steps involved in our valuation methodology are:

• Calculation of the earnings growth rate implied by the current market valuation of the company.
• Fundamental analysis of the macro economic, industry and company drivers in order to determine whether the sustainable growth rate is attractive relative to the implied growth rate.

A disciplined approach to our GARP style will lead us to buy undervalued companies, regardless of whether they are classified as ‘growth’ or ‘value’. A consistent implementation of our philosophy will lead to outperformance of the benchmark over time, regardless of the dominant investment style.

Risk Management and Return Modelling

The portfolio is structured with overweight and underweight positions relative to the benchmark, which is dependent on the gap between the implied and sustainable growth rates. A real time model monitors the portfolio positions, and the effect of the sector and stock selection decisions on the performance relative to benchmark. The risk management framework encourages diversification and reduces the risk of significantly underperforming the benchmark.

Strategy Benefits

• Exposed to a fully invested, diversified equity portfolio.
• Cost efficient.
• Able to capture diversified sources of return.
• Privy to a highly quantitatively skilled investment team.

Equity Mandates

All equity funds or products are managed according to the same philosophy and process, subject to client requirement and mandate constraints.