Nikko Asset Management’s Global Equity team is based in Edinburgh, Scotland. The team comprises of portfolio managers/analysts, with an average of 21 years' industry experience. The team’s flat structure is designed to maximise their ability to capture their best ideas in client portfolios and to minimise any behavioural biases that may prevent them from achieving the best results for clients.
Significant diversity of background and combined breadth of experience through a variety of market cycles and crises across global investment markets enables them to ‘join the dots’, applying their knowledge to think laterally and pragmatically to find the best available investment opportunities.
The team believes that superior returns on capital over the long term will deliver better performance. The common feature of the ideas that make it into a client's portfolio is what the team class 'Future Quality'. Future Quality means any company where the growth in future cashflow, its sustainability and the level of returns to investors is not reflected in the share price today. The team assesses companies to understand the quality of management, the quality of the company franchise, the quality of cashflows and balance sheet.
The team believes that effective execution of the process relies on a culture of focused collaboration to achieve one goal: high conviction portfolios that aim to achieve the best outcomes for clients.
It is this combination of extensive experience, future quality and effective execution that offers a compelling and differentiated outcome for our clients.
* As at Jul 2018
In a world awash with potential investment prospects, the team’s depth, balance and diversity of experience through a variety of market cycles helps them to quickly identify the real opportunities and focuses their research efforts.
Our values form the foundation of our process
It is our belief that no one formula or person holds the key to creating value. It’s all about the team and the dynamic in which we generate ideas and implement them.
We invest for Future Quality
Investment Style and Process
Our strategy is high conviction and benchmark-unconstrained, with an active share of typically 85%–95%. Our team selects a concentrated portfolio from listed companies across the globe. Investment opportunities are not defined by the prescriptive nature of benchmarks. The team believes that alpha can be sourced from any company across the geographical and market capitalisation spectrum. Team members are fundamental, long-term investors who focus on bottom-up stock selection with an element of top-down input.
Each element of the team’s four-step investment process is designed to produce optimal outcomes, from idea generation through fundamental research to peer review and finally to portfolio construction. This process is disciplined, accountable and transparent, relying on open debate within the team and robust risk controls to build efficient, high conviction portfolios.
The team identifies businesses with, or with a path to, high and sustainable returns, which are under-appreciated by the market. We describe these as ‘future quality’.
The process delivers a high active share, differentiated global equity portfolio that aims to provide superior returns through a disciplined and clear investment process.
William Low, Global Equity - Thought Leaders Series: Part 1
Watch William Low, Head of Global Equities discuss the role of pragmatism and free-thinking and how these concepts can be applied to investing in our evolving and increasingly complicated world.
William Low, Global Equity - Thought Leaders Series: Part 2
Watch William Low, Head of Global Equities discuss how investment opportunities can spring from unexpected places and how a pragmatic approach can be applied across all areas of life.
Global Equity Quarterly Report - Q3 2018
It is more important than ever to focus on the discipline behind how you select businesses rather than being influenced by the overdue burst of volatility and profit taking. For us that discipline is to invest only in companies that will attain and sustain superior returns on capital over the next five years and longer. Companies that can do this and ideally with growth drivers that are independent of the general economic cycle are what excites us.
In the AI Age, Active Managers Making Smart Human Decisions Will Win
This paper discusses why artificial intelligence (AI)-based investing will likely become a new solution for investors, and why active managers will need to excel at being ‘human’ in order to be a complementary and differentiated alternative.
ESG in the Investment Process
This white paper details how and why the Global Equity Team integrates ESG factors into our investment process.
Investing for the Long Term: 'Future Quality' Companies
The Nikko Asset Management Global Equity team philosophy is based on the belief that investing in ‘future quality’ companies will lead to outperformance over the long term. This paper draws on academic evidence to outline the three fundamental concepts which underpin our definition of ‘future quality’ investments.
Why Active Investing Needs Star Teams
This paper examines how company and economic analysis is used and implemented efficiently within fund management teams, and how decisions feed into portfolio construction.