Global High Conviction
API’s Global High Conviction strategy invests in industry leading companies from around the world. We employ a value-oriented active approach that combines our quantitative stock selection model with the team’s fundamental knowledge of global equities to create a 25-30 name portfolio from a universe of 2,000 securities. An active risk target of 4-5% pa to the strategy benchmark means we expect periods of significant deviation from broad markets. This strategy is available in IMA format.
Our multi-factor quantitative model looks for assets that show a superior combination of value, momentum and quality characteristics.
Value: Multiple factors to identify companies with more favourable expectations on cashflow, earnings and dividends.
Momentum: Companies with evidence of a catalyst are better prospects: superior short-medium term volatility adjusted relative performance and earnings revisions signify market awareness of improving prospects.
Quality: Companies that are better able to withstand adverse developments: sensible balance sheet leverage, stable earnings growth and sustainable returns on equity.
We verify the quantitative results with sensible fundamental analysis which assesses the following attributes:
Accounting: The nature and content of Financial Reports & Accounts. Is there any evidence of ‘aggressive’ accounting or changes in accounting reporting?
Strategic: Is our Quant model being ‘fooled’? Is there evidence of a decline and impairment of assets and thus a good reason for the share price to appear cheap? How distressed are the target asset’s competitors? Are there new market entrants or departures?
Governance: Is there sufficient separation of executive functions? The nature of asset share classes, particularly non-voting share attributes? Appropriate service provider independence?
We create an ESG score for the portfolio and monitor this relative to the strategy benchmark.