They will therefore analyse the threat of new entrants, and environmental and social factors.
The third step will be to confirm the investment story with company management teams. This is essential before an investment, as the team believes that the first thing that damages a business is the people
Once they have found investable companies, they will then assign each a valuation.
The resulting portfolio typically holds between 25-30 stocks. These will primarily be media, consumer discretionary and health care services companies. The managers deliberately avoid banks, utility, telecommunications and energy companies, as many rely on external factors.
Microsoft (9.5 per cent), Reckitt Benckiser (9 per cent) and Philip Morris (7.6 per cent) are the fund’s three largest holdings, with the top 10 accounting for almost 60 per cent of the fund.
In the past five years, the fund has returned 108.9 per cent to investors compared with 63.3 per cent for the IA Global sector average. It has an ongoing charges figure of 0.9 per cent.
Regardless of whether you believe in a V-shaped recovery or not – this fund offers investors the opportunity to be involved with some of the largest, sensibly run companies across the globe.
It also exemplifies the benefits of active management and how it can add value on the upside while retaining a strong emphasis on downside protection. The long-term performance figures really do speak for themselves.
Darius McDermott is managing director of FundCalibre