Part I: Can Economic Forecasts Help Predict the Market?
Investors should exercise caution when making portfolio decisions based on macroeconomic expectations, which may or may not prove accurate
Approach
We invest in companies worldwide with exceptional earnings growth, driven by a sustainable competitive advantage, superior financial strength, proven management teams and powerful products or services. Investing in only what we believe to be the best companies with long-term staying power supports our ability to deliver outsized returns and minimize risk.
We believe consistent earnings growth is the primary driver of intrinsic value and long-term stock appreciation. Accordingly, our efforts focus on identifying and then building concentrated portfolios of companies that we believe are capable of delivering sustainable, above-average earnings growth.
- Our long-term holding strategy is underpinned by a belief that short-term fluctuations may not reflect the true value of the underlying business and the return of the share price will match the growth of the earnings.
- We believe that superior earnings stability and financial strength serve as a “Margin of Safety” that typically results in less volatility during declining markets.
- Our focused approach is about investing in businesses around the world that we believe have an ability to compound their earnings year after year rather than merely hugging an index.
We are committed to pursuing a high conviction strategy designed to add value and grow the assets of our clients over the long-term.
—Damon Ficklin, Head of Team, Portfolio Manager & Analyst
Extending Our High Conviction Strategy
Our flagship Large Company Focus Growth strategy launched in 1989, recently celebrating its 30-year anniversary. Since then, we launched the Global Growth strategy in 2015 and the International Growth strategy in 2016. We are committed to the same process of uncovering the best companies, worldwide and across company sizes. We added our second autonomous investment team—the Small Company Growth Team—and launched the U.S. Small Company Growth strategy in 2017, the International Small Company Growth strategy in 2019, the U.S. SMID Company Growth strategy in 2020, and the Global SMID Company Growth Strategy in 2021. The addition of our Emerging Markets Growth Team and the launch of our Global Emerging Markets Growth strategy in 2020, and Global Emerging Markets Growth ex-China strategy in 2022, extends our capabilities to the developing world. All investment teams maintain the concentrated and disciplined investment approach that has resulted in a powerful relative performance record for the last three decades.
Related Perspectives
The Path to Compounding Is Not Without Obstacles
Buying & holding through the noise–putting short-term price declines into long-term context
Our centralized compliance, trading, distribution, marketing and technology teams all work together to support our investment process and the investors we serve.
We are interested in a company’s viewpoint and best practices for sustainability which complements our long-term approach.