Fund manager Grant Bowers will manage the portfolio in the same way as he runs the offshore fund of the same name. He will select companies of all sizes, across a range of industries, with growth potential that is not reflected in their share prices. Stock selection will be based on in-depth primary research and bottom up company analysis.
Bowers will focus on three factors – growth, quality and valuation. In terms of growth, the focus is on companies that can produce sustainable earnings and cash flow. Quality refers to companies with strong and improving market positions, good management teams and financial strength. Valuation is also assessed to determine whether current stock prices reflect their future growth potential, within an acceptable level of risk.
When constructing the portfolio, Bowers will take into account how a change in the value of each stock would impact the risk profile of the fund and its ability to meet the fund’s investment objective.
The US is the biggest and most liquid market and should emerge from recession sooner than other regions because its central bank took steps to stimulate its economy earlier than other regions and is continuing to address economic issues. However, the market may have further to fall before conditions improve.