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Perpetual's Global Equities

Our Philosophy

Perpetual Investment Management's investment philosophy is based on the belief that markets are not fully efficient in valuing individual stocks. Market overreaction to good and bad news leads to periods of over or undervaluation of stocks, when compared with their long-term fundamentals. Inefficiencies can also partly be attributable to funds being allocated to particular stocks, sectors or regions simply due to their weight in indices.

We seek to maximise returns over the medium term by investing in companies that are trading for less than their fundamental value. Using a benchmark-independent approach we actively seek good quality companies with sound balance sheets and strong earnings capacity that we believe the market has undervalued.


Our Process

With investment skill and good judgement, we tend to concentrate on stocks with superior prospective returns.  We conduct research and evaluation of individual stocks by a compact team who create high portfolio entry barriers (for each stock) and maintain the quality of debate and decision-making. 

We believe we can generate superior performance outcomes when we:

  • Exploit opportunities created by benchmark-centric investor behaviour.
    We do not use the benchmark index as our starting point to build portfolios. The risk inherent in the benchmark can reach extreme levels (like the technology bubble in the late 1990s and its subsequent collapse). Benchmark-centric investors are prone to risks within the index. Instead, we buy and sell stocks purely on their individual merit so we avoid these situations. What’s more, when investors follow benchmark-relative behaviour, they often provide us with compelling investment opportunities.
  • Exploit opportunities generated by short-term investor behaviour.
    We take a genuinely long-term view on stocks and are prepared to screen out short-term market noise. Momentum generated by short-term considerations often moves valuations of stocks away from the fundamental assessment in the long term. This gives us opportunities to buy quality stocks at discounted valuations and, conversely, to take profits on those stocks whose valuations have risen unsustainably.

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For further information please contact piresearch@perpetual.com.au

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