What We Do

Return Seeking

Capital growth is an important component of any asset allocation framework, and there are several ways in which investors can improve upon the growth engine using alternative strategies that offer additional diversification. First Quadrant’s return-seeking solutions aim to capture the anticipated returns from global growth, but with less downside risk and a more consistent return profile, using differentiated approaches. These solutions are generally long-biased and designed to deliver attractive risk-adjusted returns while allowing some correlation to traditional portfolios.
 

Long equities

First Quadrant’s equities are fundamentally based and designed to profit from the broad characteristics of the equity market by identifying and exploiting changing market themes and multiple dimensions, including stock selection, country and industry allocations, and style tilts. As an industry leader in tactical asset allocation, we leverage innovative, tactical processes within our equity process, recognizing that each factor offers a unique set of opportunities. Portfolios can be structured utilizing various risk factor and risk allocation techniques, as well as incorporating tail-risk hedging elements to protect the portfolio in times of market stress.

Long/short equities

Long/short equity investments are designed to predict both outperformance as well as underperformance, and when combined with a well-designed investment process can improve upon typical long-only mandates. The goal is to create a substantial increase in gross active exposure, distribute risk more evenly and maximize the ability to short stocks in order to magnify and capture value from underweight positions. FQ’s long/short strategies build upon our experience managing equities since 1990 and long/short strategies since 1991. Our work in long/short equities offers new life to the asset class as well as the potential for enhanced risk-adjusted returns. Our long/short equities can also be implemented utilizing innovative portfolio construction techniques aimed at minimizing drawdowns.

Tax-managed equities

For any investment held outside of a tax exempt or tax deferred plan, taxes matter a lot. The negative impact of taxes on portfolio performance has been documented and studied extensively by First Quadrant. An important outcome of these studies was the development of techniques that can be employed to reduce the impact of taxes on portfolio returns. First Quadrant has been at the forefront of using these techniques in our equity management process. Our tax-managed equities are designed to add value consistently on an after-tax basis by delivering pre-tax gains and by minimizing taxable income for our clients.

Multi-asset

Multi-asset or diversified growth strategies have emerged as an ideal investment solution with a goal to deliver equity-like returns with lower volatility. At First Quadrant, our multi-asset solutions seek to offer a better approach to traditional 60/40 (equities/bonds) or diversified growth investments using innovative portfolio construction techniques, including risk parity, smarter beta and tail-risk management, as well as First Quadrant’s proprietary Market Risk Index to dynamically shift the portfolio according to the current market risk environment. Our strategies are offered in the form of absolute return strategies designed to deliver positive long-term returns irrespective of market direction, alternative beta strategies which utilize non-traditional methods such as risk-based and risk-factor approaches to garner excess return, and in the form of total return solutions which aim to deliver attractive risk-adjusted returns.


Ask us about our alternative approaches to enhancing your returns and growth engines.