5 questions about... Echiquier World Equity Growth
Launched 10 years ago, Echiquier World Equity Growth invests in growth, where it is located. Managed by David Ross and supported by Rolando Grandi and two analysts, this conviction fund respects a proven discipline: since its creation, the fund has recorded a cumulative performance of 233%, compared to 168% for its index of reference, the MSCI ACWI NR EUR1.
What is the approach of Echiquier World Equity Growth?
The fund’s investment approach revolves around a long-term perspective driven by a focus on megatrends. Current priorities are 3 trends: digital transformation, financial disruption, and the rise of new economic centers in emerging markets. By resisting short-term thinking and instead concentrating on the long-term, the fund is able to search the world for the best investment opportunities. Echiquier World Equity Growth is a flagship fund for LFDE’s stock-picking process guided by fundamental analysis and applying it on a global universe of large capitalization companies without geographical constraints2 .
How are the stocks selected?
After identifying megatrends, the next step is to select the leading companies benefiting from each megatrend. The goal is to find growth wherever it exists! Based on this, the best 20-25 investment ideas are selected to build a concentrated portfolio consisting of four types of companies: global growth companies that dominate world markets, established blue-chip growth franchises, regional leaders and economically-sensitive, cyclical leaders.
What should investors know about the fund?
The fund’s methodology has proven the value of its persistently applied discipline by achieving a record of consistent investment performance3. Echiquier World Equity Growth was created not only to bring a long-term focus and break free of short-term market sentiment, but also to provide portfolio diversification with its varied return sources. This long-term global view has led the fund to this day to achieving a high-quality track record of consistently outperforming its benchmark in both up and down markets.
How has Echiquier World Equity Growth evolved?
The investment discipline of Echiquier World Equity Growth has not changed: we still invest in long-term global growth leaders. Our choices stem from our convictions: the investments are picked for their growth outlooks and their capacity to continuously innovate and sustain their global leadership. In reaction to 2020’s volatility, we maintained our long-term focus to look beyond Covid-related market moves. This meant taking advantage of market panics in companies who had a temporary disruption in their business, such as DISNEY4 or medical equipment provider STRYKER. The fund also increased its exposure to emerging markets, which now account for 30% of the portfolio5, led by such companies as Brazilian bank ITAU UNIBANCO and Mexican retailer FEMSA. These choices have paid off: Echiquier World Equity Growth ended 2020 by outperforming its benchmark by 9.8%, as the fund posted a strong return over the full year of 16.4% (vs 6.7% for its benchmark).
How do you see 2021?
The fund will continue to rigorously apply its investment discipline and engage with companies, assessing them as a strategic owner would. Remaining as fund favorites are the leaders of the digital transformation, such as MICROSOFT, e-commerce leaders like ALIBABA and AMAZON, and digital payment leaders, such as VISA. Moreover, the arrival of vaccines against covid, combined with fiscal and monetary stimulus policies, is generating opportunities: in our opinion, this is the case for manufacturing companies such as NIDEC in Japan, for example, or international travel and entertainment giants. We believe that all of them will benefit from a post-Covid economic recovery that is expected to be very strong in 2021.
1All data in this document are as of 31/12/2020. Past performances are not a guarantee of future results and are not constant over time. The fund is invested mainly in equities, and carries the risk of capital loss, equity risk, currency risk, discretionary management risk, interest rate and credit risk.
2 These are not prospectus constraints.
3 Past performances are not a guarantee of future results and are not constant over time.
4 The securities and sectors mentioned above are given by way of example. There is no guarantee they will remain in the portfolio over time.
5 This is not a constraint, it can evolve over time.
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