The management of our international share funds is via our global equities business, PI Investment Management. The fund can be accessed via Perpetual's WealthFocus suite of products as well as through the Wholesale and Investor Choice products. The PIML team's investment philosophy is very similar to Perpetual's Australian Equity approach - a fundamental, conservative bottom-up approach to stock picking focusing on quality (strong balance sheets, earnings visibility and competitive businesses) and value.
Investment philosophy
We are active global investors, with a long-term, low turnover investment approach, focusing on quality companies with attractive valuations.
Investment style
- Active
- Benchmark independent
- Bottom-up
- Long term view
- Quality portfolio
- True global view - cross-country analysis
- Valuation is key
Portfolio characteristics
This investment style will typically result in the following portfolio characteristics:
- P/E less than market
- Dividend yield higher than market
- Low turnover
- High conviction portfolio (60-90 stocks)
- Mid-large cap portfolio in well regulated markets
- Tracking error not targeted, but typically 4%-6% pa (or higher)
Team
- Flat team structure
- Strong focus on single core product - skills
Approach
Idea generation
- Direct company contact
- Extensive investment experience
- Broker research
- Not intended to capture every opportunity
Quality assessment
- We are seeking consistency in a company’s performance over time
- The company is assessed for:
| Quality of business | Demonstrable competitive advantage, sustainable franchise |
| Recurring earnings | Good cash flow, return on equity, operating margins, dividend history |
| Sound management | Shareholder focused |
| Strong balance sheet | Minimise balance sheet risk |
Valuation analysis
- Valuation is the key driver for a stock’s inclusion in the portfolio
- Global cross border comparisons
- Value relative to historical price range
- Long-term horizon
Portfolio construction
- Weightings based on relative attraction of stocks that have satisfied value and quality criteria
- Strong focus on investment risk, rather than benchmark risk
- Prudent diversification by experienced team