Our stock selection is the fruit of several factors.
Our managers steep themselves in their markets through internal and external research, conversations, conferences, meetings with analysts, economists, industry experts and with the management of companies. We run an internal ‘knowledge management system’ (which we call Delphi, as in the oracle). Delphi stores all this information and analysis, and makes it readily available to our fund managers.
Some of our fund managers also use proprietary stock-screening systems, which narrow down the number of stocks to be examined in more detail. These screens allow our fund managers to concentrate their time, knowledge and skills on the most promising investments.
We believe that, whatever markets are doing, opportunities for above average returns are available for active managers. In practice this means that we only buy a share if we believe that it is undervalued, and not because it represents a significant proportion of the index. We are benchmark-aware, not benchmark-driven.
The result is ‘high conviction’ portfolios, constructed to meet, or even to exceed, our clients’ expectations. Our portfolios quite frequently have a ‘look and feel’ which is markedly different from those of our competitors and of the relevant benchmark index.