Japan Enhanced Index Equity
The Japan Enhanced Index Equity strategy aims to generate out performance over the medium to long term, using a proprietary quantitative model based on three distinct components that estimate expected alpha from individual stocks.
- Investment opportunities arise where stock prices deviate from theoretical values
- Proprietary quantitative model
- Opportunistically invests across all market caps
- 3 independent sources of expected returns
It is the combination of the three components within the proprietary "N.ALPHA" model which enables the investment team to calculate the expected alpha of individual stocks accurately. The effectiveness of N.ALPHA has been verified by long-term simulations, as well as a variety of stress-tests, which may obtain stable excess returns over the medium and long-term.
Types of Long-Term Simulations & Stress-Tests
- The Risk Premium Model estimates rises in future theoretical stock prices
- The Mis-Pricing Model estimates the difference between theoretical and actual stock prices
- The Behavioural Finance Model estimates stock prices based on investor behaviour
The investment process is supported by "N.SERIES", a proprietary series of investment tools used to estimate credit risk, transaction costs, risk control and performance analysis. This series enables effective portfolio construction by responding flexibly to the investment team's needs and changing markets.
Portfolios are constructed by inputting the expected alpha of individual stocks from N.ALPHA into Nikko AM's proprietary optimisation model.
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This website is purely for informational purposes only with no consideration given to the specific investment objective, financial situation and particular needs of any specific person. It should not be relied upon as financial advice. The mention of individual securities, sectors, regions or countries within this website are for illustration purposes only and does not imply a recommendation to buy or sell. You should seek advice from a financial adviser before making any investment. In the event that you choose not to do so, you should consider whether the investment selected is suitable for you. Investments in funds are not deposits in, obligations of, or guaranteed or insured by Nikko AM Asia.
Past performance or any prediction, projection or forecast is not indicative of future performance. The Funds or any underlying funds may use or invest in financial derivative instruments. The value of units and income from them may fall or rise. Investments in the Funds are subject to investment risks, including the possible loss of principal amount invested. You should read the relevant prospectus (including the risk warnings) and product highlights sheet of the Funds, which are available and may be obtained from appointed distributors of Nikko AM Asia or our website (www.nikkoam.com.sg) before deciding whether to invest in the Funds.
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