In February 2016 Drewry Maritime Equity Research (DMER) launched a model portfolio - selecting stocks within the global maritime space to ensure a balanced approach to managing risk in a low return environment.
Recommended stocks are hand-picked based on the fundamentals of each entity, coupled with near-term triggers. The objective of the model portfolio is to generate optimum returns in conjunction with moderate risk.
It is important to note that shipping is a high-beta sector; it is therefore not uncommon for shipping stocks to under-perform or out-perform the financial markets by a wide alpha.
At the launch of the portfolio in February, Rahul Kapoor, Director, Equity Research at Drewry commented, "Global trade is a key barometer for the health of the world economy and what better than to take exposure to this exciting sector when valuations are in your favour and at cyclically low point. Maritime stocks are paying the price of Chinese linkages and have been battered on slowdown in global trade and excess capacity. We expect the cycle to turn in coming quarters and the current valuations present good opportunities in our favoured sectors for medium to longer term investors."