Whether we are managing the assets of Equitable Life or the assets of our policyholders, the Asset Management Group's investment philosophy is driven by an understanding and appreciation of the value that comes from employing a diverse set of asset classes.
As multi-asset managers, we believe that the key to the investment process lies within the asset mix decision. A disciplined approach to determining appropriate asset allocations within a defined investment opportunity set is paramount to exploiting relative value between investment classes and achieving optimal risk-adjusted returns.
We determine asset class allocations using a top-down approach. This process is characterized by a balance of techniques, beginning with long-term fundamental perspectives, enhanced by quantitative and technical applications for validation and additional insight. Appreciating that additional return is not achieved without cost, we also focus on risk compensation. As a result, meaningful allocations are made at times when compensation is largest and reduced as returns are viewed to be less commensurate with the corresponding risk.
Investment strategy committee
The Investment Strategy Committee is comprised of all members of Equitable Asset Management Group. The Committee meets weekly to discuss economic and financial market developments, and to establish asset class positioning biases to guide the overall allocation of our balanced mandates. Macro economic conditions set the backdrop against which functional managers for each asset class apply fundamental, quantitative and technical observations to determine the relative attractiveness of each asset class and, ultimately, the optimal portfolio weighting.