We believe growing companies exposed to longer-term secular growth drivers and which trade at a discount to intrinsic value will outperform.
Our approach works as stocks exhibiting underappreciated or undervalued growth tend to re-rate (in terms of their valuation) over time. Valuation re-ratings do not depend on a strong equity market; a re-rating represents a stock achieving a comparable valuation vs its competitors or peers, given the rates of growth on offer.
Our thematic approach means that we are focusing on businesses which are in a growth or expansion phase, which will boost earnings, or those which benefit from strong competitive positions or moats within their own industry. We also understand that the impact and persistence of investment themes is likely to vary over time, which we reflect in our portfolio positioning.