Strategies
Active Fundamental Equity
European Champions Strategy
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European Champions Strategy
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Strategies
Active Fundamental Equity
European Champions Strategy
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The investment team believes that in order to succeed, companies should exhibit sustainable pricing power, innovation and a leading and defendable market share. The team believes that companies with these attributes should deliver superior and sustained profitability, leading to higher than average investment returns over the long-term. For a stock to meet the team’s definition of a Champion, it should have a leading market position, high barriers to entry, and the potential for superior returns and consistent cash generation.
The team believes that their style agnostic approach to investing, unconstrained by limits on country, sector or market cap exposure, enables them to focus on identifying quality companies that can deliver sustainable, long-term investment returns.
Enduring Superiority |
Due to what the team believes to be the superior attributes of the companies in the portfolio, the team anticipate the strategy should be able to perform well in most market conditions. |
Stable, Highly Experienced Investment Team |
The team has built a successful track record of European equity investing, guided by extensive industry experience and a deep understanding of the local nuances and cultural differences within the European equity markets. European Champions is a natural extension of the team’s existing European equity offerings; the team’s experience of market cycles, sectors and stocks is applied consistently across all of their strategies. |
Long-Term Capital Appreciation Potential |
By investing in companies with what the team considers to be superior profitability, the team believes that the strategy can generate consistent long-term outperformance relative to the benchmark. |
1 | Proprietary Screening |
The team screens an investment universe of around 500 stocks, using proprietary screens. The screening process assesses each company’s long-term ROCE, ROE, gross margin and cash flow history before further analysis is conducted to generate a series of quartile rankings. Companies that rank highly following this screening process are researched further. |
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2 | Fundamental Analysis |
The team uses proprietary research to conduct detailed analysis, taking into consideration each company’s: The team believes that analysis of a company’s management is a critical component of the qualitative assessment. They seek out management teams with strong track records in operational and capital allocation. |
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3 | Risk Management |
Risk management is primarily considered at a stock level, with the team taking into consideration stock-specific risks such as de-rating, earnings disappointment, balance sheet risk and the risks associated with business model and industry change. Individual stocks are kept to a maximum absolute weight of 7% in order to manage stock-specific risk. |