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In contrast to the many thematic or style-driven global equity funds available in the market, the New Capital Global Equity Conviction Fund is a classic stock-picking portfolio – albeit run within EFGAM’s top-down macro and risk framework.
The team are looking for 40 to 50 high-quality stocks on a global basis. In basic terms, we focus on what a business is likely to be worth in three years’ time and value it accordingly.
This can lead to traditional ‘value’ plays where a stock is trading on a cheaper valuation than we feel it deserves, but the fund also owns businesses where the team believes a company’s growth potential is higher than consensus estimates.
Stockpicking on the Global Equity Conviction Fund is based on four pillars: the first three focus on various business risks, cashflow, management and growth, and the final one on valuation.
Cashflow is focused on a company’s track record of generating cash and how it uses this within the business, while management looks at the individuals tasked with doing that. We prefer management teams with real passion for their business, however, this is hard to quantify.
The third pillar looks at a company’s ability to grow its cashflow over time. Having assessed each business based on these factors, the final pillar, valuation, is about paying an appropriate price for the potential returns on offer.
Looking for companies that can deliver value to shareholders independently of market conditions.
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Issued by EFG Asset Management (UK) Limited. Registered in England and Wales 7389736.Registered Office: Leconfield House, Curzon Street, London, W1J 5JB. Authorised and regulated by the Financial Conduct Authority.
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