Invesco International Select Equity ADR SMA

Invesco International Select Equity ADR SMA

Equity - International and global equity

At a glance

Objective

Seeks long-term growth of capital


Universe

ADRs of companies in the MSCI All Country World ex-US Index with market caps of $1 billion. May include developed and emerging markets, as well as non-benchmark companies and small- and mid-cap companies.


Team
  • Portfolio managers, Jeff Feng and Matt Peden with Invesco since 2009
  • Supported by 3 dedicated analysts
  • Emerging markets expertise
  • Concentrated, high conviction portfolio

Philosophy

We view ourselves as business people buying businesses and consider the purchase of a stock as the purchase of an ownership interest in a business. We seek to invest in a concentrated selection of companies that represent our highest-conviction ideas driven by independent thought.

The two key questions that we ask ourselves are:

  • Is this a great business?
  • How much is it worth?

Our view is that markets are inefficient over the short term, and thus we take a long-term view (typically three to five year investment horizon).

Process

Step 1:
Fundamental research
  • Determine business quality according to F-O-R-S:
    Free cash flow;
    Organic growth;
    Returns on invested capital;
    Sustainable competitive advantage
  • Determine management quality
Step 2:
Valuation
  • Typically purchase at a discount to intrinsic value
  • Willing to pay a fair price for an exceptional business
  • Will not compromise on quality for valuation
Step 3:
Risk management
  • Focus on downside risk
  • Foster sharing of ideas through discussion and debate process
  • Weekly review of the portfolio's diversification/ concentration by industry and geography
Step 4:
Construction
  • Concentrated portfolio
  • Sector and geographic diversification
  • Benchmark agnostic