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MORPHO


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Morpho Advisory
Absolute Return | Systematic | Quantitative | Liquid Alternative Strategies



OUR STYLE

Combining wisdom, experience, curiosity and creativity with a passion for
markets is how we roll. We're primarily driven to avoid losses and capture
gains. Isn't this what every investor wants? But where others have given up
trying because it's too hard, we have suceeded through creativity - by looking
outside of the orthodox academic rut. You can't solve problems by using the same
thinking that was used when the problems were created.

At its core, investing means interest rates.
Understanding them is essential in investing
Experience is worth more than any qualification
and imagination more important than knowledge
Low fees should not mean better investing but it
will be true if you invest with mediocre managers
We observe & investigate market nuances
We glean unique quantitative insights
We design market leading systematic strategies


WHAT WE DO

Our strategies are based upon unique research and quantitatively derived
insights, which are applied systematically for long-term superior investment
returns and reduced risk.


FOCUSED STRATEGIES

Our focus is on liquid market risk assets (Commodities, Stocks & Fixed Income
Credit) & drivers of medium to long-term macro risk cycles.


MARKETS ARE OUR PASSION

Financial markets is not what we do but is who we are. It is this sense of
purpose that underlies our unique insights - we have something to offer.


GETTING THE BIG PICTURE

Our proprietary quantitative process has, for 60 years, delivered a clear
macroeconomic picture through the haze of financial market noise.


AN INDUSTRY THAT HAS LOST ITS WAY

Keeping perspective in all that we do, we want to be intentional, not just
defaulting to conventional thinking and practices. We seek to provide genuine
value rather than so many industry participants who are little more than
providers of convenience (i.e. offering aggregation & reporting) and who
increasingly display rent-seeking behaviour.


PIGEONS & SPARROWS

27 Nov, 2017 ... [FOCUS ON PERFORMANCE]

Many years ago I was sitting in a crowded city park at midday and observed birds
hunting for crumbs that fell from people's lunches. What I noted was that the
physically dominant pigeons took over the space forcing the sparrows aside.
However, when a crumb fell to the ground, as all the pigeons moved toward it,
the closest pigeon would posture and act territorially in that characteristic
head-bobbing manner that pigeons have in order to block the other pigeon's
access to the precious morsel of food. Meanwhile, a sparrow would fly in, take
the crumb and fly off leaving the pigeon that thought it had secured the food
looking stupid and confused. At that moment I thought to myself "the behaviour
of those pigeons is like every large corporation. Large corporates (including
fund managers) spend most of their time in some form of posturing and lose sight
of their purpose and reason for being. By comparison, sparrows are dynamic,
efficient and focused on their goal - get food."


DARE TO BE DIFFERENT

31 Aug, 2018 ... [THE PROCESS IS THE PROBLEM]

Marshall McLuhan coined the phrase "The medium is the message". This concept is
true not just in the media but also in business structure. I have observed in
large fund managers that the structure and process of their organisations are
detrimental to their primary objective. These structural impediments result in
large funds tending toward mediocrity. How is this so? The hierarchy of
reporting! Portfolio Managers report to CIOs who report to Investment Committees
who report to CEOs who report to Boards who report to Regulators who report to
Governments who like to look good (i.e. not look bad) in the public eye. It is
this chain that reinforces a defensive mindset from the CIO upwards, with each
level paring back on positioning for reasons of job preservation, which leads to
uninspiring conformity across all managers. Why do they aim to conform? So they
can call on the "But everyone was doing it" defense when things go wrong. This
is poor investing, risk management & governance.


SMARTER THAN SMART-BETA

6 Sep, 2018 ... [SUBSTANCE OVER FORM]

Smart-Beta, Factors & Alt-Risk Premia are supposedly a balance between active &
passive investing. This is not true. It is, for the most part, the investment
industry equivalent of observing the most minute aspect of religious doctrine
whilst ignoring the large central tenets of a faith. The appropriate response to
such a focus was given by Jesus to the religious leaders of His day:

Woe to you, scribes and Pharisees, you hypocrites! You pay tithes of mint, dill,
and cumin, but you have disregarded the weightier matters of the Law: justice,
mercy, and faithfulness. You should have practiced the latter, without
neglecting the former. You blind guides! You strain out a gnat but swallow a
camel. [Matthew 23:23]

These methods address the most minute aspects of portfolio construction while
charging "active" fees. 'Smart' investing should benefit investors as much as
managers.




PAINT BY NUMBERS

A picture of Morpho Advisory. Where we have been and where we are going.

We possess a rare breadth of experience, having managed large asset & liability
portfolios worth a combined NZ$6.7bn. We have also undertaken a number of
significant project finance & corporate finance transactions valued at over
NZ$1bn.

Bonds, Commodities & Risk Asset specialists
Credit, Commodities, FX & Market Risk strategies

Our premier investment strategy outperformed the S&P 500 by an average 10% p.a.
over 20 years, with 1% p.a. lower standard deviation. This was with a
correlation of 0.00, plus a maximum drawdown of under 22% vs 53% for the S&P
500.

Systematic MSCI EM + Commodities Strategy
Asymmetric risk & risk-adjusted return strategies

With 30 years of experience spanning a unique period in time, we have witnessed
multiple recessions, market crashes, historic bull markets plus an unprecedented
period of technological advancement & innovative financial engineering.

Economies and Markets move in Cycles
Human behaviour remains predictably consistent


CONTACT US

Please contact us to find out more. Phone (+64 27) 2738005 or submit an email
request.




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