Quality Investment Style

 

We invest in corporate excellence. Our investment style is traditional, timeless and has its own performance and risk character. We believe that a clear, disciplined and systematic analysis offers the key to sustainable investment success. In both the bond and equity classes, our analysis is based exclusively on proprietary research and proprietary analysis tools, such as corporate earnings alpha and the HQAM Financial Conditions Check. At the heart of our philosophy are investments in companies which are leaders in terms of their financial solidity, business model, market position and management.

 

BOTTOM-UP, BEST-OVERALL APPROACH

We pursue an entirely bottom-up and index-independent best overall approach. Not every sector is equally able to generate quality companies, whether this is due to its regulatory framework, or simply as a result of structural change.
 

 

Quality companies

 

are characterized by a robust financial foundation, a strong balance sheet and conservative financing

As such, they are rarely dependent on credit, and have genuine options which they can use strategically
 

deploy capital profitably and effectively in areas in which they enjoy a competitive advantage

As a result, from their core operations they generate attractive, sustainable, cash-based returns on capital which exceed their costs of capital
 

serve attractive markets with their proven business models

As a consequence, they benefit from a strong market position and above-average profitability
 

are led by competent and stable management teams

They are thus more able to withstand challenges and to manage industry life cycles
 

integrate social and environmental concerns into business operations

Such companies create value for share- holders and all other stakeholders over the long term, thus ensuring the sustainability of the company itself.
 

At any given time, a subset of these quality companies will also display attractive valuations

Exclusive focus on “Quality at attractive valuation”

 Source: BCG, HQAM

 

For further information on the quality investment style read Wikipedia entry:

Quality Investing