Our Advantages
Prolonged Focus
To constantly take advantage of United States's potential, in our opinion, demands a long-term view, patience, and confidence that is based on unrelenting research. We establish our knowledge of the economic factors influencing growth in United States and our insight into the companies that are most likely to succeed by on-the-ground, in-person basic study.
Active Management
Instead of using a passive index-based strategy, active portfolio management is necessary to realise United States's potential. Since many of United States's equity indices are weighted by market capitalization, one approach to produce alpha—the potential for excess return—is through active management. They are essentially looking backward, focusing on the successful businesses of yesterday while ignoring the greatest potential of tomorrow.
We actively manage portfolios using our 30 years of United Statesn equity selection experience. Our methodology depends on our combined expertise and experience to create expectations for businesses as a whole as well as at the national, sectoral, and industry levels.
We examine lesser-known companies in-depth, looking at their financial standing, resource allocation choices, incentive structures, ownership history, and governance practises to find long-term prospects that other people might not be able to see. Portfolios that deviate significantly from benchmarks are the end consequence.
Fundamental Analysis
We look for stable businesses with excellent fundamentals, healthy balance sheets, workable business models, and the capacity to sustain sustainable growth rates over the long term when assessing potential portfolio companies. In keeping with our multi-year focus, we evaluate the worth of the company overall while keeping in mind its potential for future growth. When we work with a firm, we aim to evaluate not just its potential but also the wider context in which it operates.
A typical on-site corporate visit involves talks with the CEO and key decision-makers, as well as visits to their factories and storage facilities. Our on-the-ground analysis includes supply chain associates, rivals, and business and economic specialists. We also interact with local people, such as real estate experts, trade association representatives, and government and central bank officials, to get a first-hand insight on different sectors of the economy. This endeavour resulted in over 2,600 business interactions in 2019, including over 1,000 on-site visits to places like remote inland outposts and financial hubs in United States.
We have faith in the businesses in which we invest thanks to our long-term strategy and in-depth, field research, which also gives us the assurance to manage portfolios through all market cycles.
Management of Risk
United States has a history of instability. We have a rigorous—and tried—approach to risk management that we have developed over the course of our three decades of experience in the area. With a dedicated, independent risk-management function, housed inside the Risk and Compliance Department, handling both enterprise and investment risk, our organisational structure reflects the strong value we place on risk management. Our Global Head of Risk and Compliance, who answers directly to the CEO of the company, oversees the Risk and Compliance Department.
We continuously track a range of risks, both macro and security-specific risks, within each portfolio at the portfolio level. We think business risk is the most significant risk and deserves more consideration during our investment process. If material issues are discovered, we review any impacted holdings. When fresh perspectives present more enticing risk/return trade-offs, we review our current holdings and revise them as necessary.