Our common investment language
As a diversified, global investment group, with wide-scale resources across continents, unity in how our investment ideas and research analysis are documented and communicated is essential.
We use five key questions to frame our investment ideas – providing a common investment language that is used across all asset classes:
- What are the key drivers?
We must be able to identify and understand the most important factors that drive the market price of an investment. The emergence of new drivers is of critical interest. - What is changing?
We focus on and understand the dynamics of these key drivers (e.g. competitive environment, demand shifts, management changes, earnings). - What expectations are priced in?
We analyse what expectations for the future are currently being priced into the investment by the market. - Why will the market change its mind about these expectations?
We need to be confident that the changes we are predicting (which are not expected by the market) will be sufficient to cause the market to re-price the investment. - What is the trigger?
We need to know that the triggers for a re-pricing exist and are within our investment timeframe.
Put together, these questions comprise our company’s common investment language, and we refer to them in each of our regional offices and across every asset class. They are the key to generating consistent investment insights that can be easily understood across all asset classes.
How we apply it
To ensure we can share investment insights across teams and global locations, we have established a global communications platform, based on regular meetings, video conferences, a variety of in-house analysis and information management systems. These meetings and systems provide a forum for analysts across geographies and asset classes to exchange market information and ideas. By using our common investment language, we ensure these insights are rigorously tested and presented in a way that can be easily understood and exploited by our investment teams.
For example, our views of a Canadian mining stock might come from a meeting with its company management in Montreal, a competitor interview in the US or a macroeconomic analysis of China completed in Edinburgh. The more pieces of corroborating evidence we can amass, the greater the conviction we can take on an investment position and the more value we can add for our clients.
Next steps
