Investment strategy 07

Passive and Index Strategies

Efficient building blocks for broad and targeted exposure.

Passive strategies seek to track a defined index or rules-based exposure, offering transparent portfolio construction and typically lower implementation costs than active selection.

Index funds
Exchange-traded funds
Systematic exposure

Investment perspective

How we assess the opportunity.

Index selection is an active portfolio decision. Methodology, constituent weighting, concentration, rebalancing, securities lending, replication method and tracking quality can materially affect outcomes.

We compare broad-market, factor, sector, bond and real-asset indices according to their intended role in the portfolio rather than treating all passive vehicles as interchangeable.

Passive exposure may provide liquid diversification around concentrated private or active positions, but it does not provide downside protection and will generally participate in index declines.

Capabilities

A detailed investment toolkit.

Broad-market allocation

Diversified equity and fixed-income building blocks across regions, currencies and maturities.

Factor and smart beta

Rules-based value, quality, momentum, size, income and low-volatility exposures.

Sector and thematic indices

Targeted listed exposure assessed for concentration, methodology and overlap with existing holdings.

Vehicle selection

Comparison of index mutual funds, ETFs and mandates by cost, structure, liquidity and jurisdiction.

Implementation analysis

Tracking difference, spreads, premiums and discounts, tax considerations and rebalancing effects.

Portfolio completion

Liquid exposure used to manage regional, sector or duration gaps around private and active allocations.

Underwriting priorities

Questions before capital is committed.

Index methodology and governance

Concentration and look-through exposure

Tracking difference and total cost

Fund size and trading liquidity

Replication and counterparty structure

Tax and investor jurisdiction

Portfolio considerations

Potential portfolio role

Transparent, scalable and cost-aware exposure for strategic allocation, diversification and portfolio completion.

Liquidity

Often daily, but fund liquidity and traded volume do not eliminate the liquidity risk of underlying securities.

Principal risks

Market loss, index concentration, tracking error, methodology changes, counterparty exposure and liquidity dislocation.

Related strategies

Alternative Investments

Selective private-market and real-asset exposure across differentiated sources of risk and return.

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Private Equity

Growth, minority and control investments in companies from proven scale-up through mature market leadership.

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Private Credit and Structured Investments

Flexible senior, junior, asset-backed and hybrid capital designed around cash flows and collateral.

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Discuss how this strategy may fit a broader investment mandate.

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For informational purposes only. This material does not constitute an offer, solicitation, recommendation or commitment to provide investment services or capital. Availability, vehicle structure and investor eligibility vary by mandate and jurisdiction. Investments involve risk, including possible loss of capital. Private investments may be illiquid and valuation may be uncertain. Past performance is not a reliable indicator of future results.