SPW Global High Quality Fund
Investing in high quality companies for long-term growth
The objective of the SPW Global High Quality Fund is to produce compound total returns in excess of the MCSI World Index over the medium to long-term. We aim to do this primarily through taking high conviction positions in well managed, high quality businesses that are attractively valued.
Our investment approach employs quantitative and qualitative analysis that aims to invest in companies with the following criteria:
• Companies that can distribute excess cash flow to shareholders whilst maintaining high returns on capital should be able to successfully compound returns over the long-term
• Companies that have strong or dominant market positions and sustainable competitive advantages that are difficult to replicate
• A concentrated and actively managed portfolio of quality equities should achieve attractive long-term shareholder returns with less absolute volatility
• Investments are based on the most attractive risk/reward trade off
• We invest in companies with low levels of balance sheet leverage.
Our investment process is based upon a rigid, fundamentally driven and disciplined framework.
1. Generation of Stock ideas
We begin by carrying out a rigorous quantitative screening process of stocks based upon a range of metrics, we have meetings with company management and we interact with external research providers
2. Fundamental Analysis
Our detailed bottom-up company analysis focusses on capital structure, robust and sustainable competitive advantages and a strong and growing free cash flow trend over time. Our analysis helps us gain an in-depth understanding of the company’s value.
3. Portfolio construction
Our actively managed portfolio of stocks is constructed through a disciplined, high conviction methodology that is unconstrained versus a benchmark. We actively rotate away from businesses which are fully valued and invest in more attractively valued stocks once our investment thesis has played out. We believe that the most appealing long-term returns are driven by cash flow growth rather than valuations which keep moving up without underlying profit growth.
How to Invest