Our Investment Philosophy

Amity Wealth believes in constructing portfolios based on targeting an a specific absolute, real rate of return with a clearly defined risk framework.Our primary objective in our solutions is to preserve wealth by delivering a consistent return above inflation and to manage the risk in a time diversified strategy.

Our investment philosophy is based on well-researched, time tested principles. These principles include factors like strategic asset allocation, tactical asset allocation, diversification and valuations of assets.

Target returns

For clients to achieve their objectives it is important to know what the required return is that will deliver the expected outcome. To enable investment advisors to construct a portfolio for a client with a specific required return it is important for the investment solutions to target specific returns. The Amity investment solutions therefore are all designed to achieve specific target returns above inflation.


What is risk?

In our view an investor should define risk as the probability of not achieving an expected outcome. Two factors could lead to the expected outcome not being achieved. The first is potential capital loss and the second not achieving a return high enough above inflation.

Risk could therefore be defined in terms of the following three principles:

1. Possible depreciation in the value of the investment during the investment period
2. Possible capital loss over the investment term
3. Not achieving an appropriate real rate of return over the investment term

The first risk refers to the risk of up and down movements in the investment value from time to time during the investment period. The second risk refers to losing all capital or part of the investment capital over the investment term. The third risk refers to the risk of not achieving the appropriate real rate of return, which is measured by the consistency of the fund achieving its benchmark.

How we manage risk?

There is risk in any investment. Whether it is the risk of losing capital or the risk of losing value through inflation, risk is always part of investing. There are however ways in which risk can be managed. The Amity investment solutions use the following strategies to minimise risk:

Asset class diversification

Asset classes often perform differently under the same economic circumstances. For example, when equities lose value over the short term, bonds may offer a positive return. By combining different asset classes, risk is reduced and the targeted return achieved more consistently. Amity aims to create diversified portfolios of assets.

Fund manager diversification

Different asset managers have different strengths and skills. The risk of a portfolio can be reduced by combining asset managers that complement each other with different styles and investment views.

Time diversification

Since investment markets can be very volatile over the short term it is important to invest money for the appropriate investment term. The longer the investment horizon the bigger the exposure to growth assets can be. Although these asset classes tend to be more volatile over the short term, they tend to produce above average returns over longer periods of time.


When an investment is made it is important to know if the asset is expensive, fairly valued or cheap. It is also important to know that cheap does not necessarily mean that the asset has value. It has been proven over time that the best way to manage risk is to buy assets that presents fair value.

Our Investment Strategy

Any investment over the medium to long term is all about outperforming inflation after tax and after cost. However, not all investors have the same ability to manage their fear when investment markets are under pressure for short periods of time. It is for this reason that we follow a strategy of allocating capital to four different risk categories.

Amity Wealth Investment Strategy