WS Keyridge Global Equity Fund

Essential features of the Fund

• The Fund invests at least 80% of its assets worldwide (including emerging markets) in equities, including real estate investment trusts (REITs).

• It can invest across geographic regions, industry sectors and market capitalisations without limitation.

• Exposure is predominately in large capitalisation companies but invests tactically in small and midcap when opportunities arise.

• It may also invest up to 20% of the assets by value in debt securities (such as corporate bonds, government and public securities), money market instruments, deposits and cash.

• Investments in collective investment schemes is limited to 10% of the assets by value.

• May use derivatives for the purpose of efficient portfolio management.

• Up to 25% of the Fund’s holdings by value may be used to generate additional income from stock lending.

How the Fund is managed

The Fund uses a blend of top-down macro views and bottom-up stock selection to identify investment ideas in which we have the highest conviction. It is flexible, pragmatic and mindful of prevailing macroeconomic and market conditions, for example; employment, inflation and gross domestic product.

• Fundamental analysis

  Specific holdings are determined through research that is undertaken by the Keyridge’s equities team, including company visits and conferences. The choice spans a variety of industries, services and geographical locations, allowing the manager to gain targeted exposure.

• Sector selection

  Sector allocations are important in order to ensure balance and diversification. Typically, macro and market views are considered in order to balance the portfolio across factors such as growth, cyclicality and defensiveness. Additionally, the desired exposure to trends such as in bond yields and commodity prices are key considerations. This approach to portfolio construction aims to deliver a diversified source of return from both a capital and income perspective.

• Stock selection

  Typically across companies of all sizes, from large well-knowns to smaller scale operations. The stock selection process itself takes into account several factors. These include the company’s market position, quality of its brand and underlying assets, how it fits in with current market and economic trends, and the specific drivers behind earnings and dividend growth. The managers will also conduct a thorough analysis of a company’s valuation, being sure to understand its earnings forecasts and any changes to a company’s strategy or management team. The stock selection is the result of collaboration between the investment managers and the regional specialists resulting in high conviction ideas from around the world. Each regional specialist recommends individual stocks based on their view of their respective market, with the investment manager making the final decision.

Reasons to recommend

• Top-down macroeconomic style

  The Fund is heavily influenced by the economic backdrop and its impact on stocks, sectors and markets. We all live in the real economy and it impacts everything we do. Similarly, our economic view is used to determine risk stance, sector positioning and the type of stocks held. Generally, companies with low debt, strong cash flow and a high return on equity are favoured although this varies with the economic cycle.

• Strong contrarian bias

  The Fund constantly seeks misunderstood investments that have underperformed the market or sector. This often provides us with good entry points to invest in companies we already like which are purchased after the thesis has been re-validated.

• Style agnostic

  The Fund will invest across all sectors, stocks and styles dependent on investment opportunity, macroeconomic backdrop and valuation. It will not be unduly biased to any one thematic or style but instead respond to investment opportunities as they present. The co-managers typically have skillsets in different sectors and styles which, in combination, we believe will provide the best, balanced outcomes.