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PRI reporting framework 2018

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

Our policy doesn't explicitly cover these options; it does describe our exclusionary screens.

01.4. Describe your organisation’s investment principles and overall investment strategy, and how they consider ESG factors and real economy impact.

We believe above-market returns can be achieved with a combination of classical security analysis, modern quantitative investment techniques, and keen attention to trading. We focus on asset-rich companies, selling at relatively low multiples of earnings, with proven and confident management, earnings and price momentum, and favorable investor sentiment.

We invest in a universe of suitable, liquid stocks. We use our multi-factor valuation model to identify low-priced companies with effective management, positive momentum, and favorable sentiment within industry peer groups. Portfolios are fully invested, sector-neutral/ country-neutral, and well-diversified in terms of industry, fundamental characteristics, and various statistical measures of risk. Individual bets are controlled; number of positions can range from almost 50 to over 200 (per side). We seek to minimize implementation shortfall.

While we do not explicitly consider ESG factors in our valuation or risk process at this time, we can (and do) incorporate client-directed exclusionary screens. Our perspective on risk and portfolio management minimizes the variance of these portfolios relative to similarly managed portfolios. Further, our universe breadth provides attractive alternatives with similar risk and alpha prospects. While the types (and lists) of restrictions are directed by the client, they are almost entirely ESG-related.

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]


SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.


02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

          Proxy Policy


02.3. Indicate if your organisation’s investment principles, and overall investment strategy is publicly available

02.4. Additional information [Optional].

SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Conflicts of interest may arise in connection with the management of multiple accounts. For example, investment personnel may have conflicts of interest in allocating management time, resources, and investment opportunities among the Fund and other accounts. Differences between accounts may lead to additional conflicts — accounts may differ in terms of fee structure (fixed versus performance-based), size (and, hence, absolute fee), restrictions, or investment strategy. Personal investments by investment personnel may provide incentives to favor one account over another. All material conflicts are disclosed in our attached Form ADV, Part 2.


The primary policy document governing conflicts of interest of AJO personnel is our Code of Ethics. However, AJO has numerous more specific policies and procedures in place to mitigate potential conflicts of interest. For example, our fixed-fee schedules are standardized and all discretionary fixed-fee accounts of the same size and similar mandate are subject to our most-favored-nation fee policy. Investment opportunities and aggregated trades are both subject to policies requiring fair treatment across accounts, without regard to account size or fee type. Importantly, we do not compensate portfolio managers or other AJO personnel based on account performance. 

03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios (Private)