Team based
Employing a team-based, consensus-driven process that has been applied for more than 40 years
Solid fundamentals
Emphasizing companies that represent above-average quality based on solid balance sheet fundamentals and cash flow characteristics
Downside risk
Seeking to mitigate downside risk through broad diversification and a “margin of safety” in each investment
We believe that stock prices are influenced by human emotion and crowd psychology. We seek to capitalize on discrepancies between estimated intrinsic value and price, buying at times of excessive pessimism and selling at times of undue optimism. We develop relatively concentrated and equal-weighted portfolios that reflect our deep conviction. By acting independently, thinking rationally, and applying a disciplined investment process, we believe that we can take advantage of mean reversion to seek to deliver strong performance, with below-average volatility over a full market cycle.
Largest and most established companies
- Stable companies with steady cash flow and solid balance sheets.
- Well-established, mature companies with diversified businesses.
Exposure to stable large-cap companies
- Typically offer a safer and more stable investment compared to smaller companies.
- Tend to be less volatile than other equity asset classes.
The investment process consists of three main elements that reinforce one another: an opportunity screen, fundamental research, and a macroeconomic overlay. We believe that by consistently applying these elements in a highly disciplined manner, we can achieve above-average returns with below-average volatility. Primary, team-driven fundamental research is at the heart of our investment process. The team’s research includes bottom-up, primary research along with top-down macroeconomic analysis.
Opportunity screen
- Proprietary multi-factor screen identifies a universe of approximately 400 statistically inexpensive securities for further consideration, based on valuation and quality factors.
Fundamental research
- Development of “quick look” research on qualifying companies to create an investment list of approximately 130 securities.
- The team develops price targets for ideas from its investment list through a combination of financial statement analysis, proprietary valuation work, and direct contact with company management.
Macroeconomic overlay
- Used to inform portfolio positioning and sector allocation, this part of the investment process seeks to identify long-term trends and themes and their potential effects on individual sectors and industries.
For more information on our equity capabilities
Risk
The value of the portfolio may fall as well as rise, and you may not receive back the amount invested.
As a class, equities carry higher risks than bonds or money market instruments.
Because the strategy expects to hold a concentrated portfolio of a limited number of securities, the strategy's risk may be increased because each investment has a greater effect on the strategy's overall performance. We maintain a diversified portfolio representing a number of different industries, which helps to minimise the impact that any one industry could have on the portfolio.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis, and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and can be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Strategy’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries. These disruptions could prevent the Strategy from executing advantageous investment decisions in a timely manner and could negatively impact the Strategy’s ability to achieve its investment objective. Any such event(s) could have a significant adverse impact on the value and risk profile of the Strategy.
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