Long-term investment returns are driven by business and economic fundamentals. For bonds, this means changes in interest rates and credit quality; for equities, corporate earnings growth and dividends. Economic growth and profitability are the dominant sources of consistent returns. Valuation changes, the emotional component of returns, can be volatile and unreliable, often the cause of short-term losses, and driven more by investor psychology than business fundamentals. In our view, investment processes that focus on business fundamentals have the highest probability of long-term success.
Across the range of investment alternatives, from government and corporate bonds to domestic and international equity portfolios, ING Investment Management consistently applies time-tested investment principles:
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Top-down and Bottom-up analysis of business fundamentals.
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Develop original insight and information processing advantages to capitalize on market inefficiencies.
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Focus on valuation disciplines to deliver consistency and control risk.
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Concentrate decision-making in the hands of small groups of investment professionals.
Our research, across a broad product range, relies on both quantitative and fundamental methodologies, but all share a common characteristic: the search for strong and improving business fundamentals, available at the “right” price. Among the characteristics common to all our offerings are:
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Active - We seek to outperform relevant benchmarks through active management.
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Disciplined - Our strategies offer various levels of benchmark awareness, style conformity, and risk control, but all are sensitive to the needs of investors for well-defined products that reliably deliver portfolio characteristics with high quality decision processes.
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Fundamental - Our portfolio managers seek to capture excess returns attributable to the business factors associated with operating and financial strength. This is the essence of active management as we practice it. Regardless of the dominant research tools and portfolio construction techniques, every portfolio exemplifies the characteristics applicable to the strategy's underlying concept, style, and process.
