Products & Strategies
The first part of firm research involves documenting the range of investment strategies and products it offers.
Investment strategies
An investment strategy is simply an approach to investing in a particular area of the financial markets. For example, a firm might offer a strategy in which portfolio managers select stocks from the S&P 500 index to hold in a portfolio — perhaps called their “US Equity Strategy.”
Each strategy typically has:
- An associated benchmark for comparison (e.g., the S&P 500).
- Guidelines for how the strategy is implemented (e.g., number of holdings, risk parameters, and so on).
Strategies are categorised by asset class — such as equity, fixed income, alternatives, or multi-asset. Some firms specialise in a single strategy or asset class, while others offer a broader range. An example offering is shown below:
| Asset class | Strategy | Benchmark | Typical holdings |
|---|---|---|---|
| Equity | Global Equity | MSCI All Country World Index | 30-40 stocks |
| International Equity | MSCI EAFE Index | 25-30 stocks | |
| US Equity | S&P 500 Index | 25-25 stocks | |
| Fixed income | Global Bond | Bloomberg Global Aggregate Bond Index | 25-50 issuers |
Figure 1: Examples of investment strategies
Task
Create a list of all your firm’s investment strategies, similar to the table above. This information should be available internally or on your firm’s website. If your firm doesn’t publish strategy-level detail, you can skip this task.
Investment vehicles
An investment strategy can’t be accessed by investors unless it’s implemented through a vehicle — a structure that holds investments and delivers performance to those who invest in it.
There are many types of vehicle, but for our purposes, we will only focus on two main categories:
- Pooled funds
- Separately managed accounts (SMAs)
Pooled funds
A pooled fund combines money from multiple investors into one vehicle that holds the underlying investments. Investors don’t own the securities directly — instead, they purchase units (or shares) of the fund.
Examples include:
- Mutual funds
- Closed-end funds
- Exchange-traded funds (ETFs)
Some pooled funds are only available within one country (e.g., US-only mutual funds), while others — such as those structured under UCITS — can be offered across multiple countries.
Availability of UCITS funds is determined at the share class level. This is often tracked in an internal matrix document that shows which share classes are registered for sale in which countries.
Task
Create a list of your firm’s pooled funds. If UCITS funds are offered, locate the matrix document that shows share class availability by country.
Separately managed accounts (SMAs)
SMAs are custom investment accounts set up directly between the investor and the firm. Unlike pooled funds, investors own the underlying securities directly in their own account.
They are typically available only to investors who meet a minimum investment threshold (which is set by each firm) and can also be tailored to meet specific investor needs (e.g., excluding certain sectors or companies).
Because SMAs are bespoke, there’s no need to track individual product availability — just confirm whether your firm offers them.
Task
Confirm whether your firm offers SMAs.