A combination of ‘top-down’ and ‘bottom up’ analysis


Initially our portfolio managers seek to identify thematic trends in the market – to provide a top down filter. We seek to identify those themes that will filter the stock universe to identify sectors and companies that will benefit from that theme. Once a sector or asset class is identified, we employ a rigorous bottom up stock selection process to identify our preferred stocks.

1. Theme/Sector Identification

  • Investment themes may be generated from changes in technology, demographic or behavioural changes, industry structures, regulatory environments or specific asset situations.
  • Investment theme identification is demanding and strongly research-driven (broker reports, proprietary research, press, company reporting and meetings).

2. Company Analysis Stock Selection

Key company analysis stock selection criteria are:
  • Financial strength - strong balance sheet/low or no gearing; and
  • Strong industry position and structure - operational factors and market analysis, Porter Analysis, capability of board and management to deliver; and
  • Attractive pricing relative to earnings potential - price risk and valuation analysis.

3. Portfolio Construction/Management

  • Each portfolio is constructed with consideration given to company operating, financial and valuation risks, news, flow/changes to underlying investment theme.
  • Ongoing visits/calls with management, attendance of investor days and AGMs, results presentations, talks with competitors/suppliers, broker and proprietary research.

Concentrated client portfolios of 20-25 stocks

The portfolio construction process is repeated as stocks are regularly reviewed. However, as we focus on long-term portfolio positions turnover is low, typically less than 25% per annum.