The Research Hive by Momentum Investments

Eugene Botha, Deputy Chief Investment Officer at Momentum Investments shares an innovative client-centric development, focused on enriching insights for the investment industry, that has seen great success over the past months.

1401

Research is an extremely important part of innovation which in turn is essential to growth, in generating ideas for new and innovative products and solutions, and in guiding the development and evolution of existing solutions in the investments business, from a client and business growth perspective.

Momentum Investments has always had a strong research culture, which is entrenched in the business. The Research Hive was set up within Momentum Investments to provide subject-matter expertise on technology trends, knowledge and strategic innovation management, and industry-specific insights and to facilitate active knowledge transfer between researchers, business experts and other areas of the investments business for the benefit of our clients. The Research Hive team includes myself, prof. Evan Gilbert, research strategist, Martiens Barnard, marketing actuary, and Paul Nixon, head of behavioural finance.  

To enhance our research proposition we have collaborated extensively in the industry to ensure that we remain relevant in the market.

A key focus of The Research Hive is on collaborating on innovation and thought leadership principles across the business. In this way, we ensure that our clients benefit most from the knowledge, expertise and skills within Momentum Investments. 

Research collaboration across the investment management business and also within client facing segments in the Momentum Metropolitan Group ensures that the focus of research and innovation remains client driven and focused. To enhance our research proposition we have collaborated extensively in the industry to ensure that we remain relevant in the market. We have partnerships with industry bodies like the Association for Savings and Investment South Africa, The Financial Planning Institute of South Africa as well as The South African Finance Association to name a few. Our close connection with research brokers and academia (through our university relationships and sponsored research projects) as well as global research providers and asset managers, ensure that we are at the forefront of research and trends in the industry from a technical, academic and practical perspective. 

The Research Hive therefore plays an enabling role in our vision to be recognised as a leading research-intensive investment business. 

The strategic focus for 2022 and beyond for The Research Hive will cut across four distinct areas – including but not limited to – investment management, client focus, market insights and industry developments, as well as technology in investment management. 

It combined insights into client trading data, combined with machine learning (to identify clusters of behaviour) and external academic input to help with measuring personality traits that can explain this negative behaviour.

Over the last couple of months, The Research Hive has seen major success across these four areas.

The first case study falls under the investments theme with a specific focus on environmental, social and governance factors (ESG) and impact investing applied to our own impact funds. The goal of this project was to identify the most appropriate metrics of performance to assess the impact of the investments made by these funds on the ‘E’ and ‘S’ goals. 

We achieved these goals through collaboration with North-West University where a master’s student was allocated this research project through supervision of The Research Hive. The outcome was that these funds now have industry-leading impact models and metrics so we can now compete for and keep mandates based on this world class impact reporting. 

Another project and deliverable was in the client space with a focus on understanding what type of behaviours our clients engage in that stop them from reaching their financial outcomes. 

It combined insights into client trading data, combined with machine learning (to identify clusters of behaviours) and external academic input to help with measuring personality traits that can explain this negative behaviour. With us, investing is personal and the main aim of this research was to effectively help our clients reach their personal financial goals. 

Eugene Botha, Deputy Chief Investment Officer at Momentum Investments

Finally, Momentum Investments has reimagined retirement income planning with the recent launch of the enhancement to the Retirement Income Option (RIO), our living annuity. With this solution clients no longer have to choose between protection and growth and it shows the value of combining a living and life annuity into one post-retirement solution.

This research evidenced that over a range of plausible future states of the world, the use of the Guaranteed Annuity Portfolio (GAP) within the RIO can improve the effective life of a living annuity and in some instances by up to 10 years. The GAP gives retirees significant downside protection when markets underperform – particularly just after retirement and therefore makes a very strong case for the use of our enhanced solution to help your clients avoid running out of money in retirement.

We are very excited to bring you these research insights and will continue to focus on making the lives of our clients better and more comfortable from a financial perspective. 

The focus of the research effort is very much premised on our clients, because with us, investing is personal. 

For more information on The Research Hive, listen to our Investment Moments podcast by clicking here

To see how we have reimagined retirement, visit our webpage here. 

Momentum Wealth (Pty) Ltd (FSP 657) is an authorised financial services provider. Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services and registered credit provider (FSP 6406). The Retirement Income Option and the Guaranteed Annuity Portfolio are life insurance products, underwritten by Momentum Metropolitan Life Limited, a licensed life insurer under the Insurance Act and administered by Momentum Wealth (Pty) Ltd. The information in this article is for general information purposes and not intended to be an invitation to invest, professional advice or financial services under the Financial Advisory and Intermediary Services Act, 2002. Momentum Investments does not make any express or implied warranty about the accuracy of the information herein.