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The objective of the AVI Active Indexes is to outperform the relevant benchmark eg the MSCI World Equal Weight Index. By applying a differentiated weighting strategy to individual stocks, AVI aims to generate Jensen's Alpha - a measure of excess returns achieved above a benchmark, adjusted for risk.

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Jensen’s Alpha accounts for the Capital Asset Pricing Model (CAPM) and incorporates a risk-adjusted component, making it a key metric for assessing the value added through stock selection.

 

 

 

 

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Investment Expertise & Strategy

 

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Stock Market Graph

AVI Active Index Overview

The AVI Index model is driven by over 25 years of investment experience across the capital structure, combined with deep operational and consulting expertise. It applies an “Activist Investor” lens to identify companies with underappreciated opportunities for improvement.

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The strategy is informed by Edward Ross, who began his investment career at Fidelity Investments, where he was the top-ranked analyst globally. He later joined Aker ASA as Investment Director, implementing activist value creation techniques that led to a 100% relative outperformance over three years. His experience includes roles at KKR, Hayfin, and Alvarez & Marsal, where he focused on cost of capital arbitrage and activist value creation programs.

Illustration: Developed Market Equal Weight Index Characteristics

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  • Stock Selection & Liquidity: The portfolio consists of the largest capitalised companies within each sector, ensuring high liquidity and minimal capacity constraints.

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  • Rebalancing & Costs: The Index is rebalanced quarterly. The focus on large-cap stocks keeps trading costs low, avoiding the high costs and risks associated with high-frequency trading.

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  • Sector Diversification: The Index is diversified across sectors, reducing concentration risks common in indexes like the S&P 500.

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  • Geographic Focus & Market Beta: The Index includes North American and Developed Market European stocks, avoiding emerging market risks. It is designed to maintain a market beta of approximately 1x compared to the Combined European and North American Equal Weight Index.

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