Our investment philosophy is based on the conviction that long-term, stable and superior earnings growth drives long-term investment returns and risk-adjusted out performance. By identifying sensibly priced high quality companies that can grow earnings faster than the market on a sustainable basis, we believe we will be able to achieve superior returns for our clients.
Also central to our philosophy is the belief that compounding wealth requires preserving capital in down markets.
We are benchmark agnostic. We consider the benchmark index to be a poor representation of the high quality investment opportunities available and do believe that fund managers should be allowed to avoid portfolio anomalies arising from benchmark-dictated constraints.
A Disciplined Investment Process
Vontobel employs a disciplined investment process that is predicated on long-term investment objectives. We believe that the best way to achieve capital appreciation and out perform the market over the long-term is by investing – at attractive prices – in well-managed businesses with consistent operating histories, solid financial performances, favorable long-term economic prospects and, in most cases, free cash flow. We employ a fundamental investment strategy that relies on bottom-up analyses to help us to identify high-quality companies. Our investment process begins with quantitative screening. We gauge companies’ future earnings and cash flows, analyze their strengths and weaknesses, and assess industry dynamics. We generally expect to hold stocks for three to five years.
Advantages of Our Investment Discipline
High quality businesses with favorable and durable economics can provide investors with a conservative means of generating above-average returns over a full market cycle with an acceptable level of investment risk. Our discipline tries to have the same consistency and predictability in our investment results as the companies we seek to buy have in their operating results.
Vontobel practices a fundamental bottom-up approach that integrates elements of growth investing (growth and stability of earnings) with a strict valuation discipline in a longer term context.