Investment philosophy



The Lynx investment philosophy has its origin in the Harvard/Yale Endowment Fund approach to investing. The key attributes of this approach involve diversification across equities, fixed income, real or physical assets (e.g. oil, platinum, gold, agricultural commodities etc.) and property.

The model includes the use of indexation and outsourced manager specialists with both tactical and fundamental approaches being applied. Central to the philosophy is a capital preservation orientation combined with long term inflation beating targets. Liquidity and transparency are also key considerations.

Differentiation

Exposure to any risk asset is seen as a tactical rather than structural allocation. In an environment in which the investor is being rewarded for being exposed to risk assets, the Lynx approach is to have a constructive allocation which is meaningful to “risk assets” (equities, property, bonds). In contrast, in a “risk off” market environment, the investment approach is to keep high allocations of protective assets with the primary consideration being the preservation of capital. As a consequence, this approach tends to disallow full participation in upside volatility, but provides for lower downside volatility and generally greater protection in negative environments. Another differentiator is the tactical use of indexation. Indexation is viewed by Lynx as a cost-effective way to quickly add or reduce risk in the funds. In many cases, evidence suggests that indexation provides better returns than the majority of investment managers in momentum driven markets.

Key differentiators


1

Raging Bull award winner 

In 2008, Lynx SCI Diversified Fund of Funds achieved the Raging Bull Award for the best foreign asset allocation fund over 1,2,3 and 5 years. During major negative markets, the capital preservation mind-set of the manager was evident.
2

Focus on risk adjusted returns 

Our strategies are deliberately built to allow tactical swings, either to protect capital, or to take advantage of opportunities. This ability assists in delivering better consistency of returns.
3

Bottom up approach 

We implement a bottom up approach, which allows us to understand the nature of the underlying holdings of each fund manager. In this way, we are able to join the dots between bottom-up construction and top down objectives, leading to more predictable outcomes.
4

Leading edge technology 

We have a sophisticated proprietary system used to analyse the mechanics of the underlying managers from a qualitative, quantitative and operational perspective, providing process driven decision making that improves the predictability of the overall portfolio performance.