MIR is a value-based investor, and the MIR process produces portfolios with strong value and momentum characteristics. We believe that over a medium to long term time frame, under-appreciated stocks can generate returns in excess of the market, and that stocks with positive momentum will out-perform over the short to medium term. MIR recognises, however, that pursuing a value style approach in isolation leads to sub-optimal results at certain times as value portfolios undergo periods of significant under-performance. Academic evidence and MIR's internal research show that there is complementarity between value and momentum strategies and that the excess returns generated by a combined value-momentum strategy are larger than that generated by either strategy alone. MIR's approach is designed to produce portfolios which are attractive on both value and momentum qualities and hence capitalise on the superiority of this combined strategy.

MIR believes that behavioural biases in investor decision making result in market inefficiencies and stock mis-pricings which can be systematically captured through the application of disciplined models. However, MIR recognises that rule-based models in isolation have weaknesses, and at MIR these weaknesses are addressed by the application of a qualitative research process in conjunction with the rule-based quantitative process. Conversely we recognise that qualitative research teams are more vulnerable to human behaviour inconsistencies. At MIR, behavioural biases are mitigated by ensuring that qualitative analysts' research and recommendations are focused on stocks that have successfully passed MIR's quantitative screens, and furthermore, by ensuring that the final portfolio always exhibits the desired style and factor characteristics that our quantitative process seeks to exploit. We believe that bringing together in an “equal marriage” this combination of qualitative and rule-based processes allows the strengths of the one discipline to mitigate the weaknesses of the other, and the approach provides us with a key competitive advantage.

The foundations of MIR's investment philosophy are based on research undertaken over many years in the areas of market anomalies and behavioural finance. The following papers address some of the questions that have been central to the development of the MIR process.

• The Rationale for the MIR Investment Style
• MIR's Response to the Three Important Questions You Should Ask Your Investment Manager
• Market Efficiency and Behavioural Finance
• A Star or a Star Organisation
• Value versus Growth: Theory & Evidence
• Combining Qualitative and Quantitative Investment Processes
• Small Is Beautiful
• Are Quality Companies Bad Investments?
• The Efficacy of Sell-Side Analyst Recommendations
• The Holy Grail Of Market Neutrality
• Accruals and Stock Prices
• Caught By The Tail
• Predicting Takeover Offers Rather than Completed Deals

The academic rationale for our approach and above internal research papers on our process are available on request&emdash;please contact us at enquiries@mir.com.au.