We give our fund managers freedom to outperform
Union Finance Investment success as a fund management group has its roots in our
investment culture. We believe our talented fund managers perform best if they are given
the freedom to invest as they believe is appropriate, while considering current market
conditions and acting within the appropriate regulatory framework.
Fund managers are organised into focused teams with specialist knowledge and experience
which allows for short lines of communication. We believe this approach gives our fund
managers the necessary flexibility to make informed and timely investment decisions.
We believe in genuine active management, not passive
Union Finance Investment’s fund managers are active rather than passive managers. Passive
management involves holding investments that attempt to replicate the performance of an
index, like the FTSE All Share Index.
Active managers, on the other hand, are able to focus on investments that the fund
manager believes offer the best potential returns. Most importantly, unlike passive
strategies, active managers can also avoid holding investments where they believe future
returns will be less attractive.
For active management to have the potential to deliver outperformance over the medium to
long term after fees, we believe that fund managers must have strong conviction in their
best investment ideas.
Our fund managers meet and access the management of the companies we invest in
Meeting companies face-to-face is one of the most important elements of our research. Our
fund managers meet hundreds of company chief executives, chairmen and directors each
year to assess the quality of their business strategies and their overall management
We emphasise fund manager accountability
While our fund managers work together closely, sharing ideas and debating market
prospects, each manager has individual responsibility for his or her own portfolios.
Many of our fund managers have substantial personal investments in their own funds, so
their interests are aligned with their clients’.
We follow a robust investment risk policy
Fund managers at Union Finance Investment are encouraged to pursue outperformance through
our active fund management culture. They do this in line with a risk management policy
which involves three areas:
- All fund managers are aware of the risks in their portfolios, and work in parallel
with Union Finance Investment’s Independent Portfolio Analytics Team (PAT)
- We have compliance and operational risk departments, who can apply a set of
portfolio-specific internal limits to the risk levels in our funds.
- The Head of Investment Risk, Chief Investment Officer, Risk Committee and ultimately
the board can discuss market risk levels with the relevant fund manager, who may
then be asked to adjust accordingly.
We take our corporate governance responsibilities seriously
We aim to act in the best interests of all our stakeholders by engaging with the
companies that we invest in, and by exercising our voting rights with care. Not only is
this commensurate with good market practice, it goes hand in hand with ensuring the
responsible stewardship of our clients' funds
Central to our investment process is the consideration of each company’s ability to
create and sustain long-term shareholder value.
Our governance analysts conduct and help co-ordinate research and engagement around
stewardship and governance issues affecting company performance. Union Finance
Investment's approach is for fund managers and governance/sustainability analysts to
work in partnership when engaging with companies.