Hand-picked stocks during a time of crisis
Uncertain markets and price slides provide opportunities for acquiring stocks at the right price. Within the sub-fund, Global StockPicking, the portfolio manager's task is to identify companies with great potential - and he has carte blanche in stock markets all over the world.
The task is just as simple as it is difficult for the team behind Danske Invest Global StockPicking: Find approx. 40 companies with a great potential all over the world. There are no limits as to neither sector nor geography.
The result is a portfolio characterised by large growth companies, but also a portfolio in which there is room for small niche companies which are suddenly turning up and which short-lived price slides have pushed down at an attractive price.
High quality requirements
”We have high quality requirements for the companies in which we are investing. The companies must have a sustainable business model, a competent management board and a good earnings potential,” says chief portfolio manager John William Olsen from Danske Capital who is the sub-fund's investment adviser.
Large growth companies such as Colgate-Palmolive, Kraft Foods and Nestle are forming the stable foundation of the portfolio. The sub-fund’s strategy is to identify companies with strong brands and business models which at the same time are attractively priced. In this context the large fluctuation in the stock market may be an advantage for us, explains John William Olsen. Moreover, at the moment the sub-fund has by and large no exposure to emerging markets, as the risk is too high, he states. However, this underweight position is not permanent, he stresses.
Look beyond the present crisis
“We typically invest in new companies when short-term factors are squeezing stock prices and are offering opportunities for long-term investors like ourselves. In general we are of the opinion that in light of the macroeconomic situation, large stable growth stocks still appear to be relatively inexpensively priced. The game is to look beyond the present crisis and dare having confidence in the companies, even though it may look rather cloudy right now, he explains. This is in particular holding through for the cyclical companies within which new buying opportunities are occurring,” says John William Olsen.
”Moreover, another stockpicking strategy within this sub-fund is to look for slightly more risky stocks with a large long-term potential. We are looking for markets where the nervousness among investors has pushed down the price of cyclical high-quality companies. If we have confidence in a company’s business concept and there is basis for identifying a large potential, we are prepared to invest,” says John William Olsen.
The stocks of Global StockPicking are typically held in the portfolio for 4 years, and the investments are typically not distributed on more than 40 companies. Since 2004 the average annual return has been 4.2% against 2.7% for the MSCI World Index.
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