June 14, 2024

Streamline your investment process and improve performance in equity portfolios by leveraging AFG’s research engine. Improve your firm’s process of idea generation by equipping your investment team with AFG’s research and investment tools and empower them to quickly sift through thousands of companies and identify the stocks most likely to outperform. Chief Investment Officers and Chief Compliance Officers can more efficiently monitor & review an analyst’s performance and ability to forecast expectations while also improving due diligence transparency, teamwork and communication.

AFG can help clients implement a consistent application of due diligence to help balance sustainable workflow, sound strategy mandates, track record persistence, and the investment management firm’s profitability.

AFG’s global database of intrinsic value estimates is the foundation of proper due diligence that can further incorporate momentum and quality characteristics to develop buy, hold, or sell ratings across all portfolio constituents and potential replacement ideas for a manager’s strategy.

Due diligence can take many forms, depending on the scope of a project. In the context of portfolio management, a PM/Advisor may want to review a large number of holdings or potential replacement ideas in an efficient manner.  Analysts may require significant financial statement analysis, company research, and custom model building.  While a quantitative manager or a strategy managed as a factor portfolio may periodically test AFG based scoring system for efficacy and consistency.

Approved lists are extremely helpful for larger organizations to ensure nobody goes rogue. We have also found that compliance departments find our grading system very helpful during routine audits to explain their process.

Once an approved list is created, trade-off decisions on the actual managing of the portfolio need to be decided. For example, are there Portfolio Managers and Analysts that can review each stock, or will it be primarily a quantitative model? How many stocks should there be in the portfolio? Is it a sector neutral strategy? How often should the portfolio be rebalanced and how will that impact turnover and performance? These decisions are not trivial, and in order to make the best decisions you not only need empirical evidence in order to have confidence in your process, but you also must have the personnel resources to efficiently implement them.

Selecting an appropriate Quantitative/Due Diligence Mix is important in determining where your time will be spent.   AFG research platform is designed to helps clients implement a consistent application of due diligence, enhance performance and leverage your research efforts to better service accounts while growing your firm’s overall profitability.