Global Franchise Strategy

Our proprietary investment approach focuses on best-of-breed quality companies that sustain high returns and compound shareholder wealth over the long term.

Strategy overview

The Strategy aims to achieve long-term outperformance primarily through investment in a concentrated number of high quality, attractively valued, well-run companies that have strong balance sheets and dominant market positioning. The Strategy seeks and continues to hold shares in businesses that we believe are more immune to global economic cycles.

Key features
  • Differentiated franchise philosophy, seeking best combination of Quality, Growth and Yield*
  • High conviction concentrated portfolio
  • Managed by a highly experienced and well-resourced team
  • Track record of long-term outperformance
    • Meaningful participation in up markets
    • Smaller drawdowns in down markets
    • Lower than average absolute volatility

* For Quality the main areas we look at are industry attractiveness, competitive position, business tail risk, returns on capital, cashflow dynamics and management. For Growth: sales, earnings and free cashflow growth.

Global Franchise explained

Portfolio Manager Clyde Rossouw introduces the Global Franchise strategy and explains the investment process.

We seek a purer expression of quality companies. We focus on fundamental research to identify companies that can offer durable, defensive and differentiated alpha.
Clyde Rossouw

Investment Approach

01

We believe few companies can consistently and reliably compound shareholder wealth at superior rates of return over the long term.

02

We believe that a concentrated portfolio of these exceptionally high-quality companies, when selected with an absolute value bias, will earn attractive returns with less than average absolute volatility.

03

We invest in businesses that display what we consider to be the best combination of growth, quality, yield and valuation.

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General risks. Past performance is not a reliable indicator of future results and performance targets may not be achieved; losses may be made.

Specific risks. Charges from capital: For Inc-2 and Inc-3 shares classes, expenses are charged to the capital account rather than to income, so capital will be reduced. This could constrain future capital and income growth. Income may be taxable. Concentrated portfolio: The portfolio invests in a relatively small number of individual holdings. This may mean wider fluctuations in value than more broadly invested portfolios. Currency exchange: Changes in the relative values of different currencies may adversely affect the value of investments and any related income. Derivatives: The use of derivatives is not intended to increase the overall level of risk. However, the use of derivatives may still lead to large changes in value and includes the potential for large financial loss. A counterparty to a derivative transaction may fail to meet its obligations which may also lead to a financial loss. Emerging market (inc. China): These markets carry a higher risk of financial loss than more developed markets as they may have less developed legal, political, economic or other systems. Equity investment: The value of equities (e.g. shares) and equity-related investments may vary according to company profits and future prospects as well as more general market factors. In the event of a company default (e.g. insolvency), the owners of their equity rank last in terms of any financial payment from that company. Style bias: The use of a specific investment style or philosophy can result in particular portfolio characteristics that are different to more broadly-invested portfolios. These differences may mean that, in certain market conditions, the value of the portfolio may decrease while more broadly-invested portfolios might grow.

Important information
This communication is provided for general information only should not be construed as advice.

All the information in is believed to be reliable but may be inaccurate or incomplete. The views are those of the contributor at the time of publication and do not necessary reflect those of Ninety One.

Any opinions stated are honestly held but are not guaranteed and should not be relied upon.

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