Our Investment Approach

• Intro
• How We Differ
• Sector Allocations
• Selecting a Unit Trust

How Our Approach Differs

Most investors base their investment selections on past performance. By contrast, the Equinox approach is to focus on the future.

It has been particularly noticeable over the past few years that there have been significant inflows into the top performing unit trusts of the previous quarter. The reasons for this include the hope that this past performance will continue into the future and the fact that it is far easier to see what has happened in the past rather than trying to analyse and anticipate where future performance is likely to come from.

Several studies have shown that investing in the previous quarter's top performer will result in a below average performance over time. In fact, investing in the previous quarter's worst performer generated a better return over time than investing in the previous quarter's best performer.

The JSE's performance over the past few years has been characterised by market volatility and sector rotation. You will remember that small companies and IT companies, in particular, strongly out-performed the market while 'old style' companies lagged badly. The past year has seen the exact opposite. The old blue chips and resource companies, in particular, have performed very well while small companies, IT and financial companies have down-rated significantly. Had you based your investment decisions on past performance, your investments would have performed very poorly.

The Equinox investment team has experienced considerable success over an extended period in positioning its investment portfolio to benefit from anticipated market movements. While it is not possible to predict the future accurately, we believe that informed and soundly-reasoned decisions can lead to excellent returns at low risk.