Decision-Making at Robeco

Abstract

An international investment company, investing in equities, located in the Netherlands but with shareholders all over the world, could have a number of possible goals:

• to offer a better return than an international stock market index

• to offer a better return than the local (Dutch) stock market index

• to offer a low risk investment opportunity.

In setting its objectives the investment company also has to keep in mind that its investors have different preferences. For instance: should the ‘better return’ be accomplished in terms of a foreign currency or in terms of the Dutch guilder? Should the ‘better return’ be accomplished in the short term or in the long run? Should the ‘low risk’ be interpreted as a low standard deviation of returns, or as avoidance of negative returns, and in what currency should risk be measured?