Equity Portfolios: More Than The Sum of Their Parts
Centralised Portfolio Management (CPM), as a way of equity investing, is a concept superannuation funds are curious about because of its startling assertion that the whole of an equity portfolio can be more than the sum of its parts. How? Because of CPM’s focus on implementation efficiency, which delivers an increment over the value of the investment ideas themselves; what might be called an “implementation annuity”1.
1We choose to describe the value that implementation efficiency can deliver as an “Implementation annuity” in this paper but, of course, do not suggest that this source of returns is guaranteed and fixed in quantum the way that a formal annuity product can be.