MPT · Benchmark S&P 500
Mandate
The fund seeks better than benchmark risk and return by investing in securities that provide superior total return. It does so by identifying the key macro and sectoral themes driving equity returns, and investing in baskets of equity investments designed to capture them.
The approach
A theme is a durable force reshaping how an economy works, whether technological, demographic, geopolitical, or driven by a constraint on resources. The companies it lifts rarely sit neatly inside a single sector. The committee's work is to identify such themes, judge whether the market still underestimates them, and find the companies that will actually earn money from them.
Because a theme can be expressed through companies with very different levels of exposure to it, the committee decides not only which themes to own, but how pure an expression of each to hold. Without shorts or derivatives, that choice is the main way a thematic portfolio controls its risk.
In the annual report
The annual report sets out the themes each year's committee pursued, the positions it took, and how they performed.