Our investment approach centres around efficiently implementing your investment strategy to help you maximise your investment results.

Excellence in investment strategy implementation

As an index manager, Vanguard is an implementation expert having successfully developed and applied innovative investment techniques for more than 10 years in Australia and 30 years in the United States. Costs, risks and net investment results are key considerations at every stage of the investment process whether managing traditional index mandates or tailored solutions such as customised benchmarks, strategic cashflow management, currency hedging and centralised portfolio management.

Excellence in indexing

Rather than fully replicating the benchmark, we use optimisation techniques to determine the appropriate number of securities to hold to closely track the index performance without incurring unnecessary transaction costs and risk. This approach gives investors all the benefits of holding a diversified portfolio like lower risk and the potential for improved returns, without the associated costs.

Our optimisation process aims to efficiently manage all events that can affect the portfolio's ability to deliver the full market return. We take into account the financial characteristics of securities in the index and the correlation in behaviour between stocks to determine the minimum risk (or tracking error) portfolio that matches the common risk characteristics of the benchmark.

Other optimisation techniques we implement include monitoring the risk characteristics of each portfolio relevant to client requirements; determining and executing the best trading strategy; managing corporate actions and efficiently managing capital flows and benchmark changes.