Investment Philosophy
Why Goshawk?
Philosophy
The two teams joining forces to manage the Goshawk funds both have long track records of superior investment returns ahead of inflation, equity indices and their peers after all costs.
Our funds generally comprise of between thirty and sixty shares, selected from developed and emerging markets around the world. While the portfolio is very different from equity indices, it tends to have a similar valuation to the index but lower volatility.
The portfolios focus on industries with superior growth potential. This analysis, focusing on long term share price trends, gives a stable framework for the portfolio.
Our stock selection is tailored to each sector and the team’s long experience in investment. In most sectors, long term share price trends follow growth in underlying cash flows. However, some excellent investment opportunities come from finding companies with strong balance sheets or hidden assets.
Greater detail can be found in our Valuation Model document, available on request.
Quality
We seek high quality companies with strong fundamentals, stable sectors, and growth opportunities. This focus can help us deliver superior returns over the long term.
- We use roadmaps to analyse sectors and identify areas with secular growth
- We utilise our own proprietary artificial intelligence engine as an intelligent filter, which continues to learn from our process and inputs
- ESG is integral and integrated into our process and more detail can be found in our Responsible Investing documents, available upon request
Secular Themes
The portfolios principally invest in global themes which give our stocks a following wind and focusses on industries which have high and sustainable barriers to entry.
- We tend to invest in varied themes to build diversification but with a consistent focus on quality criteria.
- Theme generation comes from a combination of a view on the macroeconomic landscape, our experience along with sector research
- All of these themes are analysed through a long term “roadmap” documents.
- Themes evolve and are curated by ongoing developments but currently include areas such as Healthcare Costs, Materials that Matter, Digital Infrastructure and Diagnostics.
Valuation
The central plank of our valuation process is to derive two independent measures, one from the Cash Flow Statement and the other from the Balance Sheet.
- The former informs the price embedded in today’s share price for future growth and the latter calculates a Franchise Value for the whole business, which is essentially a price to replicate the franchise.
- The two independent valuation methods allow for an assessment of “value for money” across the cycle.
