Implementative Asset Consulting

The Alpha Cube Capital Synergy Portfolio Range consists of three Model Portfolios, namely;

  • The Xcelerate Portfolio, which is an aggressive portfolio;
  • The Qmulate Portfolio, which is a moderate portfolio; and
  • The Guarded Portfolio, which is a moderately conservative portfolio.

Investment Philosophy

The investment philosophy applied in the construction and management of the Alpha Cube Capital Model Portfolios are based on three pillars, namely:

  • Within certain asset classes asset managers do not have the ability to add alpha (or outperformance) over a market index, such as the BESA All Bond Index. As a result, a Retirement Fund is best served to utilise a passive asset management style, specifically enhanced indexation, to gain exposure to these asset classes.

  • In contrast, inefficient markets and mispricing of securities from time to time creates significant alpha opportunities in other asset classes, such as African Equity, International Equity (to a lesser degree) and South African Equities. These alpha opportunities can best be exploited through active management by boutique asset management companies through concentrated portfolios and stock selection.

  • Asset allocation is a form of additional alpha. Therefore dynamic asset allocation, but certainly not market timing, is required at overall portfolio level.

Investment Approach

The Alpha Cube Capital Model Portfolios are multi-asset class portfolios following a specialist asset class building block approach. Given the institutional nature of a Retirement Fund, all types and combinations of asset classes are considered and an optimum allocation is selected, i.e. the full spectrum of the investment opportunity set allowed by Regulation 28 of the Pension Fund Act. New asset class opportunities are continually investigated. An asset allocation overlay is implemented at overall portfolio level to derive active returns (returns above benchmark) between asset classes.

 

The Alpha Cube Capital Model Portfolios follow a “best-of-breed” multi-management approach whereby exposure to multiple specialist asset managers is obtained to derive active investment returns within the various asset classes. The blend of asset managers is optimised, given manager skill and market opportunities, to allow for the highest probability of enhancing returns at an aggregate level.

 

Although the Alpha Cube Capital Model Portfolios invest predominantly in active strategies, exposure to passive strategies is maintained. Typically, exposure to passive strategies will be obtained in those asset classes where active asset managers have proven not to be able to derive meaningful active investment returns over the market or associated asset class or index benchmark. In circumstances where passive strategies are utilised, an enhanced indexation approach is typically implemented.

 

The Alpha Cube Capital Model Portfolios have a broad and diversified exposure to an extended asset class universe. The Alpha Cube Capital Model Portfolios obtain exposure to a broadened growth asset class universe limiting the primary dependence on domestic equities to achieve growth.