OUR PHILOSOPHY

- Scientifically established principles -

LONG TERM SYSTEMATIC APPROACH BEFORE SHORT AND TACTICAL

STRATEGIC ALLOCATION (91%)
91%
MANAGER SELECTION (5%)
5%
OTHER (2%)
2%
TACTICAL ALLOCATION (2%)
2%

* Brinston; Singer & Beebower; Financial Analysts Journal; 1991.

STRATEGIC ALLOCATION

Strategic allcation, i.e. the long term allocation between asset classes, is the main contributor to portfolio return over time. Studies also indicate a clear negative correlation between degree of activity and portfolio returns. COIN promotes a long-term, rules-based way of working with a limited amount of short term tactical allocations and a focus on robust portfolio construction.

UNCORRELATED CASH FLOWS CREATE OPPORTUNITIES FOR HIGHER RISK ADJUSTED RETURNS

*Yale University Endowment Portfolio - 14% per year for 30 years

DIVERSIFICATION

Diversification is often referred to as the "only free lunch". By exposing the portfolio to various risk premiums with low correlation, a higher return per unit of risk can be achieved.
COIN's approach focuses on helping investors achieve a well-diversified portfolio through exposure to uncorrelated cash flows, ie assets with underlying value growth that do not have a direct connection to the equity or fixed income market.

BE SENSIBLE WITH FEES - ONLY SPEND WHERE IT MAKES A DIFFERENCE

AFTER 1 YEAR (30%)
30%
AFTER 3 YEARS (17%)
17%
AFTER 5 YEARS (10%)
10%

*Morningstar Global Equity 31/12/2005 until 31/12/2015

ALFA-BETA-SEPARATION

Very few active managers outperform relevant benchmarks over longer periods of time. Moreover, many studies point to the fact that historical outperformance is a poor indicator of future outperformance. Beta or index management is therefore often preferred on broad exposures within traditional asset classes.

Certain asset classes and forms of investment show greater dispersion between manager returns and also stronger correlations between historical and future returns. This then could be an instance that warrants a more active approach and where a larger proportion of the fee bucket can be spent.

MANAGEMENT FEES

Management costs eat returns exponentially. A fee charge of 1% per year means that the investor gives up about 40% of the total return of an equity portfolio seen over the last 50 years.

Securing cost efficiency is a prerequisite for good long-term results.


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