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RQI Investors has a dedicated team of portfolio managers and analysts responsible for the research, construction, portfolio management, trading and institutional sales and service of its underlying investment strategies.

In these articles the quantitative investment manager RQI Investors highlights a range of topical issues in financial markets and quantitative investing.

Today, Realindex Investments, an active quantitative equities manager within the First Sentier Investors Group, will be known as RQI Investors. Coinciding with the investment manager’s 15-year anniversary, this name change is the first undertaken since RQI Investors was founded in 2008 and will be accompanied by a new logo and visual identity.

RQI Investors’ quantitative value strategies have a long history of outperformance versus peers and value indices. Our disciplined, highly active, and repeatable value investing process provides investors with a benchmark unaware, diversified equity portfolio that is cost competitive versus fundamental active stock pickers.

Discover how our equity managers with one of Australia's longest track records provide capital and income growth by investing in the Australian share market.

The Realindex Australian Share Value-Class A Fund is a real achiever that, since its inception in 2008, has delivered long-term outperformance compared to its benchmark for investors.

The quantitative investing universe can be confusing - whether you might have been afraid to ask or yet to discover these terms, we’re here to help.

Diversified Alpha is a core systematic strategy designed to deliver consistent, risk-adjusted returns above the benchmark, with Environmental, Social and Governance (ESG) considerations embedded into the process.

It’s easy to follow the crowd into some of the world’s largest and most expensive companies. It’s much harder to invest with a contrarian focus on the metrics that really matter. Investing from a global universe of 15,000 stocks across Australian, Global and Emerging markets, Andrew Francis, Chief Executive of $32.2 billion investment firm RQI Investors, shares his learnings about the mistakes that weigh investors down in global markets and the unconventional yet telling data his team focus on.

From report writing and gathering information to the more technical side of pattern recognition and natural language processing, David Walsh, Head of Investment at RQI Investors recently joined Ausbiz to highlight how AI will affect wealth and investment management.

“In some of our index focused strategies we can’t divest – so we need to let companies know which issues are important to shareholders.” Find out how investors can enact change from the top down with Realindex Portfolio Manager Joanna Nash.

We consider ESG risks to be factors that may place business value at risk. Companies at risk are identified using both external providers and our own internally driven research, which is based on a systematic and extensive company meeting program.

Systematic investor Joanna Nash discusses ways to reduce carbon emissions in portfolios.

First Sentier Investors, a leading global investment manager, today announces that it is setting its first nature targets as a Taskforce on Nature-related Financial Disclosures (TNFD) Adopter, in the lead up to the inaugural Global Nature Positive Summit hosted in Sydney this week.

Global investment manager, First Sentier Investors, today announced changes to its investment capabilities within Australia.

First Sentier Investors, a leading global investment manager is pleased to announce the appointment of Adele Swan as the new Chief People and Culture Officer, effective 24 June. Ms Swan is based in Edinburgh, reporting to the CEO, Mark Steinberg.

New data reveals stronger correlations between female executive participation and company performance/returns. Investors could be overlooking gender diversity as a predictor of profitability and share market returns, a new study shows. While correlations between corporate female participation and better investor outcomes have been highlighted before, Realindex Investments’ new study, ‘Beyond lip service: tracking the impact of the gender diversity gap’, looks beyond the easy to find board-level diversity data and into executive team composition for a clearer link.

The advent of Artificial Intelligence (AI) is affecting ever expanding fields of human activity. And the way we invest is no exception. It’s never been more timely for investors, advisors and investment managers to take deep stock of the impacts, real and potential, of AI, so we can better prepare to manage them – whether by leveraging opportunities, managing new risks or, more likely, both.

This article focuses on three of the PAIs related to Biodiversity Areas, Emissions to Water, and Hazardous and Radioactive Waste. Each PAI provides details about the measures, some of the challenges related to them, and how investors may use the information they provide.

First Sentier Investors is pleased to announce two key leadership appointments, effective 1 January 2025. Harry Moore is appointed to the newly created role of Chief Commercial Officer; and Lauren Prendiville is appointed as the new Global Head of Distribution and Marketing.

The Sustainable Finance Disclosure Regulation (SFDR) for the European Union Mandates the disclosure of the Principal Adverse Impacts (PAI) that investment decisions have on sustainability factors.

The Sustainable Finance Disclosure Regulation (SFDR) requires asset managers to report on up to 20 Principal Adverse Impact (PAI) indicators. PAIs are the negative impacts caused by a firm or an asset on the environment and society.

Better profit margins, higher return on equity and superior share market returns are hallmarks of listed companies with more diverse executive teams, new research shows.

As an adviser you’d be familiar with longstanding theoretical discussions about markets and how best to understand them, whether it’s how momentum investing works (or doesn’t), various contrarian approaches, recognising, anticipating or responding to different types of volatility, the role (or not) of correlation… and the list goes on.

Most of us would have started 2021 with the hope that the worst of the COVID crisis was behind us, and some return to normality was just around the corner. We were quickly dislodged from this hopeful place with new variants of the pandemic virus emerging, ongoing lockdowns and travel restrictions, and vaccination resistance and protests. Nevertheless, the monetary response to the resulting economic downturn has been strong, benefiting all asset classes, especially equities. Here we take a look at how 2021 evolved. The review below is in three parts. Section 1 comments on markets and factors. Section 2 looks at some of the major themes of 2021, including ETF fund flows, ESG, YFYS (“Your Future Your Super”) and macro factors (primarily inflation and GDP growth and their expectations). Section 3 discusses how Realindex has evolved as a business during 2021, and drills down into attribution and performance of our portfolios.

We believe financial markets, critical to society’s ability to function, are under threat. For too long, it has been widely accepted that short-term performance, growth, risks and financial returns should be maximised at the expense of environmental and social outcomes.

People are are at the heart of our success as a leading global asset manager

Recent actions by China in Hong Kong and rising geopolitical tensions between China and the US have resulted in the US taking a range of actions including the enactment of the Holding Foreign Companies Accountable Act. One potential consequence of this Act is the forced delisting of Chinese American Depositary Receipts (ADRs) on US exchanges.

From report writing and gathering information to the more technical side of pattern recognition and natural language processing, David Walsh, Head of Investment at RQI Investors recently joined Ausbiz to highlight how AI will affect wealth and investment management.

On the 24th of February 2022, Russia invaded Ukraine. This has led to numerous sanctions being imposed upon the Russian regime by the international community. Sanctions are typically issued by governments targeting individuals, corporations or governments in order to force their compliance with laws, condemnation of actions or threats to peace. Sanctions usually take a diplomatic or economic form and aim to provide incentive for the target to change their course of action. Previous forms of sanctions include the US Government sanctioning Chinese military companies in response to perceived national security threats , and the European Union sanctioning individuals from Russia, Myanmar and Syria in response to terrorism and human rights infringements in those countries . The current round of Russian sanctions have primarily focused on damaging the Russian economy through asset freezes and restricting Russian access to the global banking system. The imposition of these sanctions have led to: • Restrictions on the financing of Russian projects and withdrawal of foreign capital • Increased costs of doing business in Russia due to the expulsion of several Russian banks from SWIFT, Mastercard and Visa payment networks • Numerous corporations withdrawing their business operations from Russia • Freezing of overseas assets owned by Russians • Restrictions on trade conducted with Russia • Halting of the Nord Stream 2 gas pipeline On top of government sanctions, we have also witnessed companies behaving proactively. For instance, Shell, ExxonMobil and BP have all announced their divestment and exit from all Russian oil and gas assets . Although existing sanctions have targeted a significant proportion of the Russian economy, they have largely avoided the energy sector due to Europe’s dependency on Russian supplies. There is still the possibility of future sanctions that target the oil and gas trade from Russia which would have a significant impact on global oil prices and a very direct effect on the Russian economy .

Diversity is a business issue as well as an ethical one. There is a raft of research demonstrating that gender diversity contributes to better business and economic outcomes.

We are entering a new era. The year 2024 will be unpredictable and clouded by many uncertainties. It will be marked by geopolitical risks, the ongoing taming of the inflation beast, and how the US Presidential election will impact markets.

Last quarter I visited infrastructure companies in Tokyo, Osaka and Nagoya. The trip included visits to ten corporate head offices and three site tours. This paper seeks to share some of the key findings from my meetings with Japanese passenger rail and utility companies.

Climate change and global warming pose systemic risks to society and the global economy. It impacts the availability of resources, the price and structure of the energy market, the vulnerability of infrastructure and the valuation of companies.

Low-cost access to one of Australia's largest and longest-running geared share managers. Selecting quality stocks based on their fit for leverage, we favour essential characteristics like strong balance sheets, ability to grow cash flows through market environments and liquidity.

In September 2023, I met more than 30 global listed infrastructure companies and stakeholders from the UK, Europe and China. The following travel diary summarises my impressions and findings from these meetings.

There are four distinct ways to approach ESG investing in systematic investment strategies. Understanding the pros and cons of each can help to align client preferences. How investment managers and asset owners apply and implement their Environmental, Social and Governance thinking really matters to client outcomes.

Over the last decade the electricity sector has been at the forefront of decarbonisation, ahead of transport, industry and agriculture.

After decades of flat electricity demand for US utilities, the industry is now seeing unprecedented demand as growth in data centers / AI, electrification, onshoring and electric vehicles outweighs energy efficiency gains. One utility executive stated: “Seeing all these customers wanting 24/7 load and willing to pay for it – it is every utility’s dream”.

Global listed infrastructure underperformed in 2023 owing to rising interest rates and a shift away from defensive assets. Relative valuations are now at compelling levels. Infrastructure assets are expected to see earnings growth in 2024 and beyond, aided by structural growth drivers.

The impacts of interest rate changes on asset values are well understood by financial markets. Typically, for capital intensive assets such as real estate, the access and cost of capital are important contributors to future operating fundamentals.

Conventional wisdom suggests that value-style investments (‘Value’) outperform their growth-style (‘Growth’) counterparts during periods of higher inflation . But in a period of growing inflation and unprecedented conditions, we believe it is useful to test this assumption. This article outlines how Value investments have performed in 2021 and what might be in store for Value investors if inflation leads to higher interest rates.

There was a large jump in capital raisings – in April alone 26 companies in the S&P/ASX300 issued new stock. By the end of 2020, 104 of these companies had undertaken raisings - the most number of companies that had ever raised equity in single year - totalling almost $40 billion.

This final paper is somewhat shorter than the first two, and simply aims to look a little deeper into whether zombie firms appear in Realindex portfolios, and how a Quality factor acts as a repellent for these stocks. This is more important in Value-oriented portfolios as the potential appearance of lower quality “junk” firms, or even zombies, is higher here than in broader universes.

Incorporated in 1885, BHP began as a silver, lead and zinc mine in Broken Hill, Australia. Over the next century the company grew into one of the largest diversified resource companies in the world with operations including oil and gas, steel production and mining of a variety of commodities including copper, potash, coal and diamonds. It listed on the Australian stock exchange in July 1961, making it the oldest company currently trading, and throughout much of this time it has been the largest company on the ASX by market capitalisation (currently it is ranked third). In 2001 BHP announced it would merge with fellow resource powerhouse Billiton. Billiton also had a long history dating back to a single tin mine in 1851 before growing into a major producer of aluminium, alumina, chrome, manganese, steaming coal, nickel and titanium. The company was Dutch controlled from inception before being acquired by South African firm Gencor in 1994. As the world’s largest metals and mining corporation, BHP Billiton began trading in July 2002 and operates as a dual listed company (DLC) – a corporate structure in which two companies have merged into a single operating business but retain separate legal identities and stock exchange listings (in this case Australia and the United Kingdom ).

Time flies in the world of investments, and the themes that were emerging last year have gathered speed since then. Late in 2021 we published a Realinsights paper on the long-term relationship between inflation and Value-style investing, focused on whether the inflation spike we had been seeing on the back of the COVID lockdown and stimulus packages would drive outperformance of Value compared to Growth-style investments. Events have moved swiftly since then, including the outbreak of the Russia-Ukraine conflict; high realised and anticipated inflation; and a risk of a global recession. In this context, we have revisited the question of how Value stocks are performing.

Over the last 5 years, China has been on the rise within the Emerging Markets. We have all heard the story of the China Dragon and the impressive growth that the Chinese economy has been able to achieve relative to other large economies since the early 1990s. Even more recently as its growth has reduced it is still achieving more than double the growth of the United States. We believe the increase in regulatory risk from both the US and domestically in China has been a large contributor to this fall. The question for investors is this: will it continue and where does the next risk lie?

We pose the question – what if we could develop a way of predicting which companies are more likely to be suffering distress, and which were not? The idea contains three parts: A. Certain individual observations or metrics can separately tell us about stocks that might – in the near future – find themselves in trouble. B. If we combine enough of these metrics together – without overfitting – we can get synergy between the factors. C. If we build a smart model that is designed specifically to target corporate distress, then we can apply and refine the predictions from the metrics in a better way.