Consistent philosophy
Long-term focus of owning enduring business models over multi-year periods.
Sustainable process
Seeks durable, competitively advantaged companies capable of participating in rising markets and weathering disruption.
Security concentration
Emphasis on fundamental, active stock selection driving risk and return.
Quality-first investing is the best path to durable compounding
Quality-first investing has numerous advantages:
- Quality is more persistent than growth, so focusing on a small subset of durable businesses can increase odds of success
- It exploits inefficiencies and has historically generated outperformance with less severe drawdowns
- It can offer meaningful compounding benefits
Quality-first investing is easy to talk to but hard to do:
- Behavioral tendencies make execution difficult which creates an exploitable inefficiency
- A thoughtful analytical framework is required to mitigate common behavioral mistakes
- Requires the right 'order of operations' - quality first, then growth
Long-term wealth creation
- Over the past two decades, large-cap growth stocks have provided some of the strongest returns to investors, both on an absolute and risk-adjusted basis.
Exposure to quality
- A focus on only the most dominant businesses may enhance sustainability and consistency of returns.
Conviction
- By owning 35 to 50 durable growth companies, the strategy attempts to concentrate our largest active weights in companies where conviction is greatest.
Our investment process centers on our fiduciary duty and accountability to clients, never losing sight of the fact that we’re being entrusted to manage money on others’ behalf. Our team conducts rigorous fundamental research to identify companies we believe possess sustainable competitive advantages, the essential characteristic that enables persistent and superior levels of long-term profitability and growth. The portfolio consists of 35 to 50 companies that offer the best return potential alongside a portfolio construction framework that controls for risk and emphasizes stock selection as the primary driver of risk and return over time.
Screen for potential signs of franchise strength
- Filter for strong or improving profitability
Analyze economics of competition and sustainability of growth
- Focus on structural origin of profit and growth drivers
Find timely stocks with appropriate catalysts
- Superior business model
- Attractive industry prospects
- Timeliness
Construct the portfolio
- 35 to 50 stocks with superior business models
- Emphasize stock selection over other risk factors
For more information on our equity capabilities
Risks
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 is increased because each investment will have a greater effect on the strategy’s overall performance.
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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