Quality global franchises often have strong disciplined business models which can provide some certainty in uncertain markets. They tend to create enduring competitive advantages, such as strong brands, patents, licences and copyrights and high barriers to entry. This means they tend to create some certainty around their profitability and cash flows.
Given the recent uncertainty in markets, many investors are looking for investments that are likely to perform well in a lower return world and have good defensive characteristics.
We believe the Investec Global Franchise Fund neatly fits that requirement. The types of companies it invests in have proven how their competitive advantages have helped them secure pro tability and income streams over the long term.
As the chart below shows, the Investec Global Franchise Fund has participated meaningfully in strongly rising markets, outperformed in moderate markets, displayed excellent defensive characteristics in falling markets and, most importantly, provided strong outperformance over the long term. The Fund has achieved this with relatively low levels of volatility since inception.
The Investec Global Franchise Fund takes a differentiated approach to investing in quality companies.
- Is a high conviction 25-40* stock portfolio of some of the world’s leading companies
- Seeks to provide consistent, reliable growth through an actively managed portfolio of quality companies
- Avoids leveraged and capital intensive businesses, so holds no banks or resource stocks
- Has a strong track record with very attractive risk characteristics
- Managed by a top team with a long history of employing the Quality investment approach.
Clyde Rossouw is co-Head of Quality at Investec.