International Value Equity
Our International Value product seeks long-term capital appreciation by investing primarily in a diversified portfolio of equity securities of non-U.S. issuers. The product generally holds securities in Canada and countries across Europe, Asia and Latin America.
The firm operates an Investment Policy Group directed by our CIO and comprised of the portfolio managers, fundamental analysts, quantitative analyst, portfolio implementation manager and our President. The Investment Policy Group meets monthly to review macroeconomic trends, political trends and product portfolio structure, including regional and country allocations. Voting members are our CIO, portfolio managers, fundamental analysts and our President.
We screen a universe of about 1,800 large and mid-cap stocks. We then sort and rank this universe of stocks by region and industry sectors using proprietary valuation models unique to each sector. This reduces the universe to 500 value-oriented stocks. Next, we perform a financial analysis (cash flow, debt-to-capital and earnings estimate revisions) to cut the number of stocks to 200.
At this point, our team performs a fundamental analysis (reviewing operating trends, pricing power/volume growth, efficiency, etc.) and identifies a value catalyst. Our experts review this analysis and then construct a portfolio of about 150 of the most attractively valued securities within each industry sector.
Besides geographic diversification, we diversify across industry sectors and within sectors. We typically hold 150 securities to reduce company-specific risk. We seek to further reduce risk through a careful assessment of the quality of accounting, management and balance sheet.
What’s more, we maintain asset weightings in economic sectors that are within a reasonable range of our benchmark (MSCI World Ex USA) weights. Regional/over/underweights are driven by a top-down process. Sector over/underweights are driven by a bottom-up process
These diversifying strategies allow us to lessen our spread exposure to company or industry surprises that are out of our control, while positioning for profitability.
While we do not have a firm rule on the maximum exposure to emerging markets, our portfolio has always had a less than 10% investment in these markets.