We assess each stock's value, growth and quality characteristics, along with market sentiment towards the company, to find those with the optimum combinations.
Aiming to beat the benchmark each quarter and by 2-3% every year, this product has outperformed in nearly all market environments since its 2007 inception.1
Companies are systematically analysed to identify those with the best time-tested fundamental characteristics, overlaid with a bottom-up sense check.
Our investment approach can be easily tailored to meet your specific risk, reward and ESG requirements.
Analysing companies from a broad range of perspectives helps to generate positive returns in various market environments and defend against large swings in style.
Companies with a good or improving ESG track record are favoured. Hermes EOS provides best-of-breed ESG intelligence.
Proprietary risk management tools enable the team to monitor and neutralise the impact of macroeconomic risks. Portfolio stress tests provide forward-looking views of the potential impacts.
We like stocks with robust financial statements, competitive strength and a proven ability to consistently beat revenue and earnings expectations. Ideally, these companies should also be guided by impressive management teams, mitigate ESG risks and appear cheap relative to peers. But very few stocks embody such an ideal investment. So we identify those with the most attractive combinations of characteristics in every market environment.
A systematic model, capturing the same data as a fundamental investment analyst, assesses the attractiveness of every stock in the investment universe each day. The metrics used to select stocks are justified by both economic reasoning and statistical effectiveness, and have a long-term focus that leads to low portfolio turnover. They are grouped by valuation, sentiment, growth, profitability, corporate behaviour and capital structure. This model creates an optimised portfolio that aims to maximise risk-adjusted returns.
The portfolio is subjected to two levels of risk analysis. First, MultiFRAME, our proprietary risk-management system, assesses top-down market risk. It has the flexibility to stress-test the portfolio, interpret how it would respond to different market environments and measure its exposure to any quantifiable risk. Second, we perform a bottom-up ‘sense check’ to ensure that the model has accurately assessed the nuances of each potential investment. At this stage, the ESG Dashboard, another proprietary tool, alerts us to stock-specific environmental, social and governance risks not typically covered in fundamental analysis of companies.
1. Since inception on 01 December 2007 the Hermes Global Equity Strategy has outperformed the MSCI World Net index by 1.47% on an annualised basis as at 30 September 2018. Performance shown is in USD and is gross of fees. A full GIPS disclosure report is available on the latest strategy factsheet.
Past performance is not a reliable indicator of future results and targets are not guaranteed.
Geir Lode
Head of Global Equities
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Geir Lode
Head of Global Equities
Geir Lode joined Hermes in May 2007 to establish the Global Equities strategy. Prior to this he was Chairman of Bergen Yards in Bergen, Norway, where he was responsible for restructuring and focusing a holding company. Bergen Yards changed name to Bergen Group and was listed on the Oslo stock exchange in June 2007. Geir started his career in 1991 at Frank Russell, moving to Chancellor LGT and then Putnam Investments, where he was a senior vice president before returning to Norway in 2003. Geir studied Mechanical Engineering at the Norwegian Institute of Technology and earned an MBA at the Pacific Lutheran University, Washington. Geir has been on the board of 17 companies in four different countries.
Lewis Grant
Senior Portfolio Manager
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Lewis Grant
Senior Portfolio Manager
Lewis joined Hermes in February 2008 as a portfolio manager on the Global Equities team. In addition to his role as portfolio manager, Lewis is responsible for designing and implementing many of the team's systems. In particular he created Hermes' proprietary risk-modelling system, MultiFRAME, which is used across Hermes’ investment teams. He joined from Aon Consulting, where he worked as an actuarial consultant specialising in providing valuations and asset-liability modelling to a range of corporate and institutional clients. Lewis graduated from the University of Warwick in 2003 with a Master's degree in Mathematics, Operational Research, Statistics and Economics and subsequently qualified as a Fellow of the Institute of Actuaries.
Louise Dudley
Portfolio Manager
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Louise Dudley
Portfolio Manager
Louise joined Hermes in March 2009 and leads the ESG and responsible investment research strategy within Global Equities for Hermes. Building on her experience developing factor testing platforms and enhancing the factor modelling capabilities of the team’s systems, Louise has applied this comprehensive analysis to ESG applications. Having delivered research supporting the returns from ESG integration, this has led to the creation of innovative customised product solutions and tools fulfilling client needs. Louise originally joined Hermes as a member of the stewardship advisory business, Hermes EOS. Prior to Hermes she worked for Coca Cola in a financial accounting role, having graduated with a Master’s degree in Engineering from the University of Durham. Louise holds the IMC and is a CFA charterholder. In 2017, she was named one of Financial News' Rising Stars of Asset Management.
