Waverton Global Equity Fund
The objective of the fund is to achieve returns in excess of the MSCI All Country World Index through investment in a focused selection of global equities
The Waverton Global Equity Fund is a focused long-only stock-picking fund investing in a concentrated list of 25-35 global best ideas.
The current fund managers have been managing the fund since July 2019 but the strategy has been in place since 1996. The strategy aims to identify competitively advantaged businesses which can grow cash flows for shareholders in the long term.
The investment philosophy is centred on the principle that a company’s value is tied to the long term growth and durability of free cash flow generation. The managers believe that identifying businesses where the market underappreciates these free cash flow prospects should lead to excess returns.
The investment process examines if a business has:
A value proposition to customers supported by a competitive barrier which enables pricing power (Sustainable competitive advantage)
An opportunity to grow free cash flow through revenue growth, margin expansion or invested capital rationalisation (Opportunity to grow future free cash flow)
A management strategy which is consistent with the free cash flow growth opportunity (Value enhancing management strategy)
An attractive valuation in relation to its opportunities and risks
The fund managers perform direct research and draw on the regional equity research capability across Waverton to identify these investment opportunities. Position sizes are allocated on a conviction basis and while being aware of the relative exposure versus the MSCI All Country World Index by style factor, region and sector, the portfolio’s construction is benchmark agnostic.