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LGT Equity Funds Global Sector Trends

Monday, February 12, 2007

A fund that uses a behavioural finance approach in portfolio allocation.

A SQUARE :: 12Feb07 LGT Equity Funds Global Sector Trends
Category	Behavioural Finance
Faculty	Hanspeter Oehri
Expertise	Behavioural Finance
Author	Sona Blessing
Focus: Using a well rounded, disciplined approach that relies on observed market price information and systematic data analysis, trends in countries, sectors, industries and equities are identified. Economic sustainability of these trends is assessed and contributes to the investment process. Behavioural finance is applied to analyse various causes for the occurrence of these trends and considers issues such as - systematic cognition problems (patterns are transferred without empirical evidence), the incorrect or slow classification of new information (clinging onto old evidence or slow adjustment to new evidence), social contagion (subjective knowledge gaps, time pressure and the pressure to succeed generate uncertainty which is overcome by observing and imitating others). This collective process leads to stock picking and guides portfolio management.The fund seeks to beat its benchmark – the MSCI World –index – and to simultaneously maintain a tracking error of between 5-8% a year.
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