High quality businesses with durable competitive advantages supporting strong cash returns on capital that will compound over time
Companies trading at a discount relative to our view of intrinsic value based on their fundamental economic prospects to ensure that we are the beneficiaries of future accumulated returns
Improving operating performance
Upward momentum to operating performance that is not fully factored in by the market, offering a catalyst to realise value
Increasing investor attention
Businesses that are receiving increasing investor attention as a sense check to guard against potential behavioural biases
This consistent, compelling philosophy has underpinned the 4Factor approach since inception, giving us four clear characteristics on which we measure stocks. The first two characteristics are grounded in traditional finance and highlight the type of asset we want to invest in. The second two are momentum factors which exploit market inefficiencies caused by the behavioural tendencies of investors.
From a broad universe, our differentiated, disciplined process begins with a sophisticated screen which objectively highlights potentially interesting ideas in accordance with our philosophy. Our team of investment specialists then focus their fundamental research on these investment opportunities to identify the most compelling, high conviction investment cases for inclusion in the portfolio.
4Factor strategies seek to deliver long-term outperformance relative to their benchmarks through a combination of disciplined idea generation and thorough fundamental analysis.
At Ninety One, we are committed to investing for a better tomorrow, with sustainability as a key part of our purpose as an active investment manager.
The blossoming area of sustainable investing, driven by laudable intentions, may have further fueled behavioural biases in equity markets.
We believe these biases are creating new opportunities for our 4Factor investment approach. Our integration of ESG into the investment process helps us analyse real world outcomes and aims to generate alpha for our clients: