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Research & Stock Selection(i) ECONOMIC RESEARCHVartan & Son has acquired the services of the experienced economist, John Clarke, who provides the Partnership with a highly detailed view of economic events and provides opinions of where the economy is heading. John Clarke was the Chief Economist with Norwich Union Investment Management from 1990 to 1999. During this time he was responsible for all macro-economic research at Norwich Union and for the provision of the house view on the global economy. He was a member of the Company’s Asset Allocation Committee, with responsibility for their main with-profits funds. Prior to joining Norwich Union, John spent five years in the Government Economic Service in various posts at HM Treasury and the Department of Employment, rising to the rank of Economic Advisor.
(ii) STOCK SPECIFIC RESEARCHThere are an increasing number of publications that give stock research and Vartan & Son take as many of these as possible. We also have close links with Investment Banks who kindly furnish us with research on particular companies. Vartan & Son are increasingly forging links with local companies and getting to know the management of these as well as carrying out their own research on these companies. Vartan & Son also have close links with many Fund Managers who provide updates on individual stock selection and policy direction.
(iii) STOCK SELECTION CRITERIAStock selection is conducted as a combination of “top-down” and “bottom-up”, but always after initial consultation with the client. Experience has taught us that it is unwise to invest on a random-spread theory and our Portfolios have benefited materially from the successful identification of the sectors that are performing. We are not adverse to being “overweight” in sectors if it appears that they are likely to out-perform. We are traditional enough to believe that there are benefits to be had from a widely-based Portfolio, but the increasing volatility of the Markets means that top performance will be achieved from being not only in the right companies, but also in those companies within the right sector. The “weighting” of the Indices and the development of the tracker/hedge funds has increased volatility and often causes polarisation which, at times, leads to chronic distortions. We believe that this makes stock selection and hands-on management more important than ever before. Overseas exposure us usually obtained through well-managed Unit/Investment Trusts, but recent improvements in communications, combined with reductions in dealing costs, have widened the scope for direct overseas investment. It is essential, however, (in our opinion) that any investment overseas must be well and constantly researched, as well as being freely marketable.
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