About GWA - Overview
GWA launched the world’s first non-market cap weighted portfolio without using security prices nearly two decades ago. Our global reach includes clients in Japan, UK and the US. Our mission is to build portfolios that align with Intrinsic value.
The origin of Non-Price Strategies:
The idea originated as a response to UK pension fund clients who, in the mid 1990’s, were asking us for a more sensible way to allocate funds to international equities than market capitalization weightings. They were troubled by the severe distortions in their global performance benchmarks when Japan’s market capitalization grew to be 33% larger than the US. (We are all familiar with the technology bubble and the financial crisis 'anti-bubble' creating similarly severe distortions).
We believe that it is possible to provide an approximation of long term valuations of firms by using measures of wealth. After all, Book Value is the most direct observation we have of the capital invested in a firm. Further, the present value of income must equal Intrinsic Value in the long term, so Cash Flow and Net Profit are crucial and important ways to measure wealth. These three proxies are the backbone of our long term investment strategies.
The first wealth weighted portfolio went live in South Africa with AECI in April 1998, the second in the US with Honeywell in June of that year. Rhea Brothers was an early adopter in the UK in 1999 and in November of that year we formed a joint venture with AIG Japan with a live portfolio that re-weighted TOPIX.
In July 2003 we restructured our company and took on the name GWA. By September 2005 we formed a partnership with FTSE to launch the world’s first non-market cap weighted index series. The FTSE GWA Index Series is calculated at the end of each business day in US Dollars, Japanese Yen, Australian Dollars, Euro and Sterling.