BAM follows an ethos of global sustainability by investing in the equities and bonds of highly ranked and improving ESG companies. We believe that companies that have high environmental and social standards and top quality management relative to their peers will out-perform over the long term. Additionally, we avoid investments in agricultural commodities, metals and energy markets where numerous academic studies have demonstrated that excessive speculation in food products and oil can lead to increased volatility in these markets to the detriment of third world consumers and producers.
BAM applies active hedging strategies to ESG equity portfolios to enhance risk-adjusted returns and reduce downside risk. Machine Learning algorithms are used to identify and predict market patterns on a probability adjusted basis. Frequently several individual trading strategies are combined to achieve an approach which produces stable long-term capital growth across all market cycles. Each investment strategy is designed to positively contribute to the total risk-adjusted performance of every portfolio. Diversification and correlation reduction across different markets and timescales is employed where possible.
BAM uses a scientific approach to constructing investment strategies across global equity, currency and bond markets.
This means that we design computer-driven, trading strategies which are based on extensive research and practice and leverage the latest technology platforms, including cloud technology, multi-threaded databases and electronic execution.
ESG companies are continously screened using BAM's proprietary AI and Natural Language Processing (NLP) software which reads, interprets and ranks ESG news-flow on individual companies on a real-time basis.
By dynamically interpreting thousands of news articles BAM can re-rank an individual equity and immediately reduce allocation if there is a major negative ESG event.
We use active risk management and target a specific level of risk. Daily Value-At-Risk is measured at portfolio, strategy, sector and asset class levels.
Portfolios are subjected to scenario analysis based on historical market downturns. Position limits are applied and the total leverage is capped. Hedging strategies mitigate risks in volatile markets.
Efficient execution of trades is carried out in both electronic and OTC markets where multiple financial counterparties are frequently used.
In liquid electronic markets, BAM's execution algorithms allow large size trades to be transacted at low cost to investors. Execution efficiency is continuously monitored for optimum performance