Our International Equity investment process is designed to build a concentrated portfolio from a universe of 2,000 publicly traded securities outside of the US. We believe in a Quantamental approach to build a bottom up portfolio.
Quantitative Model: We use proprietary quantitative models using multiple factors to find the companies that have the characteristics we are looking for while still trading at attractive valuations.
Fundamental Analysis: We start by validating the information that was unearthed in our quantitative work. We want to verify sustainability of the numbers that led us to choose the stock in the first place. We analyze income statements, balance sheets and cash flow statements as well as company specific factors, industry dynamics and macroeconomic factors in an effort to better understand the underlying business. We look for inflection points in a company’s businesses that have not yet been fully recognized by the market. We want to find stocks or perhaps even entire industries or countries which are likely to exhibit asymmetric returns, that is, offer compelling rewards versus a limited downside.
Portfolio Construction: We construct our portfolios through a bottom up stock selection process. While we hold concentrated portfolios, we also follow a broad diversification policy within each portfolio, with no one position allowed to account for too great a share of the portfolio. The tracking error for our portfolios is generally in the range of 3% to 7%. Our objective is to add alpha primarily through stock selection and deliver superior performance relative to our benchmark over a market cycle.