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The Art of Uncovering Superior Growth


THE ART OF UNCOVERING SUPERIOR GROWTH

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Joel Rubenstein
Senior Portfolio Manager
New Capital

Despite the persistent low-growth environment globally, US growth stocks had a stellar year in 2017. New Capital, the funds arm of EFG Asset Management and the winner of this year’s Top Mutual Fund Award in the US Large-Cap Growth Equity category, is confident that the secular bull market in the US, especially in the growth universe, is poised to continue. Joel Rubenstein, Senior Portfolio Manager, told BENCHMARK his firm’s effective strategy and what could be in store for growth investors in 2018 and beyond.

BENCHMARK (BM): Your actively managed growth strategy adopts a bottom-up process to identify stocks with potential. Can you give us more details on how you derive these high-conviction ideas?
Joel Rubenstein (JR): Sure. At New Capital, the majority of our ideas are sourced from our proprietary industry work, which includes attendance of sector-specific events such as the Consumer Electronics Show and the meetings of the American Society of Clinical Oncology. We also review pertinent trade journals to understand trends, market share shifts, and the movement of industry talent, which helps us identify new stock ideas.
All potential additions to the portfolio are then filtered through our proprietary investment process, which includes both qualitative and quantitative measures. We have employed this process for the past 15 years, and it has generated consistent alpha over the long term.
BM: In terms of sector allocation, you are around 35% invested in the technology sector. Is this a vote of confidence in the sustainability of the tech rally? What other sectors do you find attractive?
JR: Our sector weightings are a by-product of our stock pickings and reflect our underlying confidence in the individual constituent securities in the portfolio. While the technology sector accounts for the largest absolute weight in our portfolio, it reflects a slight underweight relative to the benchmark Russell 1000 Growth Index. Our largest overweight sector exposures against the index at year-end 2017 were industrials and financial services. We expect both sectors to benefit from an acceleration in US GDP growth and rising interest rates.
BM: Your large-cap growth portfolio also includes small-cap ideas. Do you expect an increase in your exposure to small-caps? What is your outlook on US large- and small-cap growth stocks?
JR: You’re right, our large-cap growth portfolio also includes the team’s best mid and small-cap ideas. At year-end 2017, small-caps accounted for around 6–7% of our large-cap growth portfolio, and we expect this percentage to stay between 6 and 8% in upcoming quarters.
We remain bullish on the prospects for growth stocks due in part to the stimulatory effects of the US tax reform, which is expected to drive higher capital expenditure, increased M&A activity, and an acceleration in GDP growth. We also believe that synchronized global growth, higher energy prices, and a relatively weak dollar should fuel growth for many companies in our portfolios.
While some of these catalysts are already factored into equity prices, we believe there is a strong likelihood for earnings estimates to increase substantially this year, including a realistic opportunity for S&P 500 earnings growth to exceed 20% compared to 2017. For the growth stocks in our portfolio, we expect earnings growth to exceed that of the broader market, given our expectations for market share gains and the companies’ ability to drive leverage with their superior financial models.
BM: Besides political and geopolitical risks, what other investment risks should investors look out for in 2018? How do you manage these risks?
JR: Aside from political and geopolitical risks, we are also paying close attention to central banks’ decision-making and company specific risks. On the former, we remain abreast of the US Federal Reserve’s policy as well as our companies’ direct exposure to interest rate risk; on the latter, the first step in our process is to screen companies on the basis of quality, which serves as a robust risk mitigation technique.
We also have the ability to increase the cash position in our portfolio, which can potentially protect downside during volatile periods in the stock market. Furthermore, we have a stop-loss policy in place to automatically review any positions that have gone down more than 20% from their original cost basis. BM

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洞悉優越增長機遇的藝術

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高級投資組合經理
Joel Rubenstein
創凱基金

管環球經濟增長持續放緩, 美國增長型股票卻在2017 年獲得驕人的成績。今年榮獲「美國大型增長型股票類別最佳表現基金」的創凱基金(瑞士盈豐資產管理旗下的基金公司)有信心美國股市——尤其是增長型股票領域——的強勢會持續。在這次訪問中,創凱基金高級投資組合經理Joel Rubenstein 與我們分享其基金的致勝策略,以及增長型投資者應在2018 年及以後留意哪類投資產品。

《指標》:Joel,你管理的主動式增長策略透過由下而上的投資流程識別具有潛力的股票。你可否與我們分享更多關於選股的細節?
Joel Rubenstein (JR):當然可以。在創凱基金,大部份投資意念都是來自團隊的行業研究工作,其中包括出席如消費電子展覽或美國臨床腫瘤學會會議等行業活動。我們亦會透過閱讀相關的行業期刊以了解行業趨勢、市場份額變化以及人才流動的情況。以上種種都有助我們發掘新的投資意念。
首先我們會初步選出一些有潛質加入投資組合的股票,然後便按照獨有的投資流程,以定性和定量的條件篩選股票。我們實施這選股流程已經15 年,事實證明這種方法有效持續產生主動回報(α)。
《指標》:在行業配置方面,我們留意到基金的投資組合持有約35%科技股。這是否反映你們有信心科技股的強勢可以持續?你認為還有哪些行業具吸引力?
JR:我們的團隊著重挑選股票,投資組合反映我們對個別持股的信心,行業權重只是相應的結果。在我們的投資組合內,科技股所佔權重的確最高;但相對於基準羅素1000增長指數而言,基金其實稍稍持輕科技股。截至2017年底,相對基準指數而言,工業和金融服務股才是基金最為持重的行業。我們預計美國GDP加速增長和加息都會令這兩個行業受惠。
《指標》:你管理的大型增長投資組合亦持有小型股票。你預期未來會否加持小型股?你如何看美國大型和小型增長股票的前景?
JR:你說的不錯。此基金亦持有我們團隊最看好的一些中型股票和小型股票。截至2017年底,小型股票佔基金組合約6-7%,我們預計這比例會在未來幾個季度維持於6-8%之間。
我們亦繼續看好增長股的前景。相信美國稅制改革將會帶來刺激作用,譬如是提高資本支出、促進併購活動和令GDP加速增長。此外,我們認為環球同步增長、能源價格上升以及美元相對疲弱都會對基金中不少持股的增長有利。
儘管我剛才提到的個別因素已反映於股價當中,我們認為今年的盈利預期很可能大幅走高,其中標普500指數的收益增長大有機會較2017年上升20%。至於基金投資組合內的增長股,由於預期這些公司的市場份額將會增加,加上考慮到它們可以利用其卓越財務模型進行槓桿,我們有信心基金持股的盈利增長將跑贏大市。
《指標》:除了政治和地緣政治風險外,投資者還應留意哪些可能在2018 年出現的投資風險?你又如何管理這些風險?
JR:除了政治和地緣政治風險,我們亦會密切關注各央行的決策和個別公司的風險。針對前者,我們會特別留意美國聯儲局的政策以及基金持股直接面臨的利率風險;而我們投資流程的首個步驟——對公司進行定性篩選,正是減低投資組合受個別公司風險拖累的有效措施。
我們也可因應情況提高投資組合的現金比例,在股市波動期間,這有助控制跌幅。此外,我們為投資組合制定了止蝕機制,基金會自動審查任何跌穿買入價20%的倉位。 BM

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