When your car’s fan belt snaps, you do not take it to a dentist; and when a back molar starts aching, you do not book an emergency appointment with a mechanic. We instinctively understand that different problems require different expertise. A mechanic has the expertise to repair a vehicle, while dentists are trained to treat dental problems.
Choosing the right professional is about having confidence in their ability, approach and track record. A recommendation from someone who has used the service before provides reassurance. So can a long-established history, a strong reputation and a consistent flow of returning clients. The same principles apply when choosing an investment manager.
Otto1890 traces its roots back to 1890, when Otto Pollak became one of the first members of the Johannesburg Stock Exchange. Throughout the different chapters of the business, one characteristic has remained consistent: the depth of experience and tenure within its team of investment specialists. This experience is complemented by a steady pipeline of intelligent and energetic graduates who bring fresh perspectives and contribute to the development of the next generation of investment professionals.
The combination of youth and experience is especially valuable when constructing investment portfolios. Younger team members question long-held assumptions, challenge established ways of working and introduce new perspectives. Experienced professionals recognise that although markets evolve, certain investment principles remain relevant because they have been tested through different market cycles.
One portfolio in which this blend is particularly valuable is the Otto1890 Innovation Portfolio. The portfolio seeks to grow investor capital by investing in companies aligned with the global innovation themes shaping the future. While the portfolio has significant exposure to technology, its opportunity set is broader. Any company that embraces innovation and presents a sound investment case may be considered.
Managing a specialised thematic portfolio requires more than identifying businesses associated with exciting trends. The investment team needs a detailed understanding of each company’s products, competitive position and long-term growth prospects. It must also carefully assess the risks attached to each investment.
Because thematic portfolios carry higher levels of risk, discipline is essential. The investment team must be prepared to make difficult decisions when the original investment case does not develop as expected. This is where experience, independent thinking and a consistent investment process become important.
Portfolio construction is not simply a spreadsheet exercise. Investment management has its own specialised tools, but those tools remain most effective when combined with professional judgement. The Otto1890 global equity portfolios, for example, are constructed from a universe of companies that demonstrate established quality and growth characteristics expected to endure over a long-term investment horizon.
The UBS HOLT framework supports this process by providing a consistent way to analyse and value companies across global markets. It offers access to extensive data and analytical capabilities, but it does not replace the role of the analyst or portfolio manager. Investment professionals must still develop and input their own long-term expectations for a company.
They must then interpret the results, challenge the assumptions and determine how the findings should influence portfolio construction. The system provides valuable information, but the final investment decision requires human accountability.
A similar combination of professional expertise and computing power is used when constructing multi-asset offshore portfolios. Technology can help generate an efficient frontier, identifying combinations of asset classes that may offer the most appropriate balance between risk and return. Portfolio managers input their long-term return expectations for the relevant asset classes and assess the resulting portfolio options.
This process supports the construction of the Conservative, Moderate and Growth multi-asset portfolios, which target returns of US inflation plus 2%, 3.5% and 5% respectively. Each portfolio seeks to achieve its required return while taking the lowest appropriate level of risk.That is the investment sweet spot: experienced professionals, fresh perspectives, disciplined processes and the right analytical tools working together in pursuit of better long-term investor outcomes.
