Our Approach
The key characteristic that runs through all our strategies is our focus on stock selection, driven by bottom-up, fundamental analysis. Our research process aims to uncover stocks where we believe their full potential upside is not correctly priced by the market.
Income
The strategy aims to exploit the underestimated contribution of dividends to the total returns of stocks located in the UK, Europe and Asia. Most importantly, the team aim to avoid those high yielding stocks which may not be able to sustain their dividend in the coming years.
Outcome orientated
An outcome orientated suite of products which target returns of inflation plus 4% and invest in a concentrated portfolio of large-cap equity and investment grade fixed income. There is no inflation plus 4% index that could simply be matched through a passive approach. We believe this is a compelling return target and relevant to many clients’ long-term savings and pensions goals.
Sustainable businesses
We believe long-term ownership of companies which are building the future of our economy and can grow throughout the economic cycle is essential to achieving long-term wealth creation. Our objective is to find companies that will have enduring business models with dominant market positions, competitive advantage and the ability to self-fund growth through sustainable cash flow generation. These types of businesses will likely show greater resilience, compound long-term growth and demonstrate market leadership. It will often be the case that innovation and sustainability form two sides of the same winning coin, leading to outperformance through the investment cycle.
Long term themes
We look to build a connected understanding of the world by formulating views on the secular and structural trends shaping the future. Specifically focusing on those key trends which are accelerating and have large addressable markets.
Fundamental research
At the heart of what makes us better investors is the ability for our analysts and fund managers to have a greater in-depth of knowledge on companies and their sectors. Every investment decision is informed by rigorous analysis and a long-term focus. Our understanding of the key strengths of the business, risks, opportunities and financials helps shape our investment view of companies and sectors. This involves bringing together knowledge across the asset classes within LGIM as part of our research engagement framework.
