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  • 07/05/2016

Bigger is better: Investec’s brand loyalty to worthy franchises meaningful pay off


Clear Thinking; Disciplined Investing

By Vered Zimmerman

Investec Asset Management (“Investec”)’s flexible investment culture allows for different styles of management to freely co-exist. This ability to capture value through a diverse range of philosophies, while adhering to the company’s risk guidelines, has underpinned its success at the BENCHMARK Fund of the Year Awards 2016, with Clyde Rossouw and Ken Hsia both winning Manager of the Year.

Clyde Rossouw is the Lead Portfolio Manager of Investec’s flagship GSF Global Franchise Fund (the “GFF Fund”) and is Co-Head of Quality team at Investec. He has also been a key member of the Global Franchise strategy since inception in 2007, pursuing a disciplined, long-term quality approach to equity.

When asked about investment philosophy, Rossouw explained that he and his team seek out quality companies which have long trading histories. These companies usually have high customer loyalty, strong brands and little or no debt. “We try to reduce uncertainty in an unpredictable market,” he explained, “and view these companies as more resilient in times of economic incertitude, having survived multiple economic cycles with their market position and competitive economics intact.”

According to Rossouw, such companies are unique: They typically have enduring competitive advantages in the form of intangible assets such as brands, patents, copyrights, licenses and distribution networks. This creates high barriers to entry and provides excellent long-term returns and resilience to investors.

The approach certainly works: the GFF Fund has participated meaningfully in up markets and delivered smaller drawdowns in declining markets.

The Spirit of Debate

The investment team’s strength lies in the way the investment philosophy is applied in practice. Given the unconstrained nature of the GFF Fund – there are no restrictions on the sector or geographical spread – so, the process begins with a broad definition of global equities that includes nearly 30,000 stocks.

This universe is then narrowed down by excluding smaller companies and those firms in areas of the market they believe to be capital intensive and lower quality, including the energy, materials, telecoms and utility sectors. Following this screening, roughly 800 stocks are left and are ranked based on four metrics: return on capital, profit growth, free cash flow conversion, and valuation.

During the second stage of the investment process, the team uses a bottom-up approach driven by proprietary fundamental analysis. The research agenda is set by Rossouw and Rob Forsyth, Head of Research, with input from the team’s investment specialists. Rossouw is very supportive of the company’s ‘freedom to create’ culture. He explained: “All research ideas are challenged and debated by the whole team. In doing so, we can draw on our diverse strengths and perspectives, enhancing the quality of conclusions.”

The final portfolio-construction stage of the process centers on maximizing the portfolio’s combination of quality, growth and yield, while minimizing the risk of a permanent loss of capital. The GFF Fund retains its focus, holding between 25 and 40 stocks, and as Rossouw observed: “I am willing to invest with conviction where real opportunities are identified. Moreover, it shows in our geographical diversification, with allocations in different countries across continents.”

Constant Vigilance

Remaining with the theme of global expertise, Investec prides itself on an ability to offer its investors a range of high-quality, regionally focused funds. One such vehicle is the Investec GSF European Equity Fund (the “GEU Fund”), which is managed by Ken Hsia. Hsia has worked at Investec for 12 years and has 22 years of industry experience. He is also the portfolio manager for all of the company’s European and UK small- cap strategies. Despite his relatively short spell managing the Investec GSF European Equity Fund, it has delivered excellent performance and is widely regarded by the asset management industry.

The 4Factor

“I work in tandem with our 4Factor Equities team, whose members all have direct performance accountability for a sector, region or particular strategy. Each sector has a designated global analyst, who is in a strong position to guide the strategy leader on stock selection. With everyone contributing their most powerful ideas, we construct our best-in-class European portfolio,” explained Hsia.

The 4Factor framework works in four stages. First of all, there is disciplined idea generation, with the team screening and scoring all European stocks with a market capitalization greater than $500 million to identify the highest ranking ‘good Ideas’. This is followed by a qualitative evaluation, where the team conducts in-depth fundamental company research to identify ‘best Ideas’ for inclusion in the GEU Fund. This critical second stage involves the fundamental research of a company, to build sufficient conviction to be held in the concentrated portfolio.

“We then look at these ‘best ideas’ and construct high-conviction, risk-aware fund,” said Hsia. He added, “The GEU Fund also has no benchmark constraints, which makes it very adaptable.”

The fourth stage is an ongoing process, ensuring portfolio integrity. Hsia leads a number of meetings on stock, portfolio, sector and process levels to ensure that the GEU Fund maintains the optimal risk/reward balance and each holding’s investment case remains robust and the rigorous sell discipline is met.

Company-Wide Monitoring

This team-level monitoring sits within Investec’s company-wide risk management process. Hsia elaborated on this: “As a company, we recognize that a properly structured investment process is the best form of risk control. Therefore, we identify where we are taking risks and ensure that this is consistent with our level of conviction in a particular stock. We also aim to identify unintended investment risks as projected volatility relative to our clients’ indices – a portfolio should exhibit sufficient, but not unduly large, tracking error to achieve its performance targets. Finally, we are always trying to identify weaknesses, evolve our processes and ensure that the risk within our funds is in line with expectations.

Commitment to Responsible Investing

Environmental, Social and Governance (ESG) integration is another priority for the firm, with both Rossouw and Hsia pointing out that ESG issues form an integral part of the investment process rather than exist as a separate procedure. To this end, Investec has a dedicated global ESG team that focusses on integration strategies, research and engagement efforts. BM

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清晰思維,紀律投資

Vered Zimmerman 撰文

天達資產管理(「天達」)靈活的投資文化讓不同的管理風格並存。憑著多元化的投資理念,同時堅守內部風險指引,締造投資價值。天達在2016年度《指標》基金大獎中創下佳績,其基金經理羅克穎和夏怡生更雙雙獲得是屆「年度最佳基金經理」殊榮。

羅克穎是天達旗艦基金 — 環球特許品牌基金的投資組合經理,同時兼任天達優質股票團隊聯席主管。自環球特許品牌策略於2007年成立以來,羅克穎一直扮演重要角色,協助基金以富紀律、重質素的方式作長線股票投資。

被問及投資理念時,羅克穎指他及團隊以優質並成立多年的公司為投資對象。這些公司一般擁有忠誠的客戶群和強大的品牌,而且負債水平低,甚至零負債。羅克穎解釋:「我們盡力在難以預測的市況中降低不確定性。這些公司在經濟不明朗時更具抗跌力,經歷過多個經濟盛衰週期,仍能保持市場地位和競爭優勢。」

羅克穎指出這些公司都有其獨特且持久的競爭優勢:一般而言,它們擁有的無形資產,如品牌、專利、版權、牌照和分銷網絡等,提高了行業的入場門檻,並為投資者提供卓越及穩健的長期回報。

此投資方式明顯奏效:環球特許品牌基金在大市上升時顯著受惠,在跌市中所呈跌幅亦相對較少。

鼓勵思辯

天達投資團隊的強項,在於他們實踐投資理念的方式。由於環球特許品牌基金不受投資限制約束,在行業及地域配置上不受限制,故在投資流程之始,就可廣泛地考慮近3萬隻環球股票。

隨後,流程將剔除小型公司和來自資本密集、質素較低板塊的公司,包括能源、原材料、電訊和公用事業等,以縮窄投資範圍。經過篩選後,獲選的大概800隻股票將按四個指標排行,即資本回報率、利潤增長、自由現金流轉化和估值。

在投資過程的第二階段,團隊通過天達獨有的股票基本面分析方法,貫徹公司的「由下而上」選股方針。研究議程由羅克穎及研究主管霍思博擬定,並由團隊的投資專家提供意見。羅克穎十分支持公司的「自由創造」文化,他說:「所有研究構思都得到整個團隊的充分質詢及辯論,此舉可集合團員的不同強項及觀點,提升討論結果的質素。」

構建投資組合的最後階段專注於最大化投資組合的質素、增長和收益率,同時旨在將永久資本虧損的風險減到最低。環球特許品牌基金集中其投資焦點,持有25至40隻股票,羅克穎稱:「我只投資於確信發掘到真正機會的股票,投資目標亦分布於環球各地,不同國家以至各大洲都有配置。」

保持警惕

天達對環球市場瞭如指掌,對於能為投資者提供一系列高質素的地區性基金,公司感到自豪。由夏怡生管理的天達歐洲股票基金,是公司其中一隻引以為驕的地區性基金。夏怡生加入天達已有12年,擁有22年行業經驗,他亦是公司旗下歐洲和英國小型股票策略的投資組合經理。

雖然夏怡生管理天達歐洲股票基金的時間相對較短,但此基金已取得相當出色的回報,並廣獲行業認可。

「四大動力」團隊

夏怡生指出:「我與公司「四大動力」股票團隊緊密合作,團隊中每一位成員均直接負責某一特定行業、地區或策略的投資表現。另外,每一個板塊都有指定的環球分析師,可憑豐富知識為策略負責人提供選股意見。我們匯集所有團隊成員最出色的投資主意,構建行內最優勝的歐洲投資組合。」

「四大動力」框架分為四個階段。第一階段為具有紀律性的投資主意構思,團隊就所有市值超過5億美元的歐洲股票作出篩選及評分,並選出排名最高的「好主意」。隨後,團隊將對經篩選股票進行定性評估,深入地研究公司的基本面,以確立可納入歐洲股票基金的「最佳主意」。此關鍵的第二階段須有貫徹的公司基本面研究,擁有足夠理據,才能將股票納入高度集中的投資組合。

他續指:「之後,我們會審視這些『最佳主意』,以建立高確信度及注重風險的基金。天達歐洲股票基金沒有追隨基準指數的限制,靈活性非常高。」

第四階段是一個持續的過程,要確保投資組合的完整性。夏怡生主持多個層面的會議,包括股票、投資組合、行業和投資流程會議,確保歐洲股票基金維持最佳的風險及平衡回報、所有持倉的投資理據保持穩健,以及在出售股票時符合嚴格的沽售紀律。

公司整體風險監察

團隊對基金風險的監控,是天達整體風險管理流程的一部分,夏怡生詳細說明此點:「作為一間公司,我們明白經過妥善規劃的投資流程是最好的風險控制措施。因此,我們精確辨識風險來源,並確保風險承擔符合我們對某一股票的確信度。我們亦致力辨識意料之外的投資風險,即相對於客戶指標的預期波幅,因為我們認為,投資組合涉及一定程度的追蹤誤差實屬合理,但不應為了達到目標回報而衍生過大的追蹤誤差。最後,我們亦會不斷嘗試辨別弱點、改善我們的流程,並確保基金所承擔的風險符合預期。」

堅持責任投資

將環境、社會和企業管治(ESG)評估融入投資過程,是公司的優先考慮。羅克穎和夏怡生均指,ESG是投資過程的一個重要組成部分,而非僅僅一個單獨程序。為此,天達另設專門負責ESG的環球團隊,專注負責ESG共融策略、研究及參與合作項目。 BM

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