quality stocks fund

performance

Long-term capital appreciation

volatility

+ 10%

Portfolio composition

Global, Unhedge

Investment style

Equity Growth Global

“The safest growth in the long term”

Investment Philosophy

The Quality Stocks Strategy is a concentrated quality stock and global portfolio with a performance objective of Eonia + 600 basis points on a complete economic cycle (between 5 and 10 years).

The portfolio is concentrated between 20 and 25 quality stocks of developed and emerging countries. We measure their quality by the security grade which the present and future growth of the business offers us.

The Quality philosophy seeks a sustainable growth, tolerating a similar volatility than stock market but avoiding over all permanent looses of capital on the companies we invest.

Stock price of a company may vary with certain volatility but what matters to us is that business fundamentals, earnings and cash generated for the shareholder in the long term maintain an attractive growth and durable. With a solid base of growth, market corrections or sector rotation, which sometimes rattle shareholders are transformed on buy opportunities which increase the price the market buys again. Growth stocks reduce negative volatility because the investors see them attractive without waiting huge falls and enhance positive volatility since their business expectations admit price increase more stable due to the lack of psychological barriers imposed by maximum prices reached in previous cycles. This imbalance is very beneficial for the investor in the long term, which accumulates composed performance over his more stable wealth.

METHODOLOGY ALTEX QUALITY model

The quality stocks selection goes through 5 stages of rigorous analysis:

  1. Fundamentals growth: from a universe of 26.000 stocks we filter until we get a group between 250 and 350 companies. In this phase we analyze a compelte economic cycle growth of fundamentals factors of balance sheet, income statement and cash flow. We remove companies with high debt or negative growth ratios, even for temporary and reversible situations as we do not want to assume risks related to  financial weakness of a company nor betting on recoveries that never come and become permanent losses of capital. We choose companies which have shown a sustained growth in a balanced and sufficient number of factors to allow their managers to easily address the expansion phase in which they are.
  2. Barriers of entry: We focus the investment universe on those companies which show a higher growth compared to their peers (between 100 and 200 companies). These companies with superior margins and growth than the average during long periods of time usually present intangible and difficult to replicate barriers of entry, making the investment safer and more  attractive. In this stage, factor normalization and time series regression  techniques are used to determine the degree of information that each factor contributes and enables the relative comparison between companies of different sectors and countries.
  3. Financial Consistency: although there is increasing control over the quality of the information published by listed companies we conduct a detailed analysis of the coherence of the different fundamental factors that we analyze. This allows to detect attempts of manipulation or makeup of data by the companies. We analyze up to 12 different alarms that can warn and force us to investigate in much more detail situations that if not treated systematically could go unnoticed.
  4. Valuation: For some it is the Holy Grail of investments, for us it is another reference. We consider it impossible and imprudent to trust a target price for an investment of a company when it has been calculated based on profit estimations, cash-flows, multiples of ratios… within several years. To avoid biases andvalue traps, we use several methods giving more weight to those that best suit the type of company we analyze. For growth companies any past reference becomes obsolete and the future is unknown even for the managers who run the company. What we look for in this stage is comparing the price we pay for the investments based on our subjective valuation and the one the market recognizes. We do not look to buy bargains if not excellent businesses at appropriate prices. We avoid extreme valuations both up and down as we look for businesses with visible and easily contrasted growth. What we most care about at this stage is to find coherence between price evolution and real business, analyze the maximum drawdown we can assume and deepen enough in the comprehension of the business to identify very quick when the company stops having the quality characteristics we look for. The loss of quality or potential growth is what will determine our decision of exit. The target price we keep calculating will not be a stationary number we hope to achieve but  a dynamic value that must be increasing in line with the company growth.
  5. Momentum: It is an essential requirement to start any investment. In addition to complying with all the previous requirements, we ensure that the business in which we invest is also perceived positively by the market. We search for companies which grow more than the average and that has to be a materialized on its price. If the comapny does not have it we keep analyzing and waiting until the price starts a bullish path to maximize the stability of the portfolio. Price momentum give us an additional  security margin to the comapny´s own growth.

After this phase we select between 20 and 25 stocks which offer the greatest growth potential with  a proven quality and with sufficient diversification to reduce sector and regional risk. We promote and actively seek a great differentiation between our portfolio and indexes (tracking error) by completely eliminating exposure to sectors that do not offer the characteristics we look for. We do not want to have a similar performance than the indexes, we want to overperform them in the long run. 

PERFORMANCE

Investment vehicle

Sigma Fund is a Luxembourg registered Sicav which was set up in April 1995. It is registered in the list established in article 72 (1) of the Luxembourg Law dated 30th of March 1998 concerning collective investment institutions and is submitted to the second part of the aforementioned law.

Sigma Fund Sicav operates as an umbrella structure comprising different compartments with a different portfolio composition each.

  • Investment Manager: Altex Partners Gestión, SGIIC, SAU
  • Custodian: Quintet Private Bank
  • Administrator: European Fund Administration
  • Auditor: KPMG
  • Daily Liquidity
  • Trades in : Luxemburgo
  • Performance
    Eonia + 400 basis points
  • Volatility
    4-6%
  • Portfolio Composition
    Multiactive (stocks, bonds, forex, derivatives, funds,ETFs)
  • Investment Style
    Global, Multistrategy, Flexible. 
  • Sensibility to market
    Medium. Maximize stability.
  • Risk profile
    Moderate
  •  
  • Performance
    Eonia + 600 basis points
  • Volatility
    5-10%
  • Portfolio Composition
    Multiactive (stocks, bonds, forex, derivatives)
  • Investment style
    Global, Growth. Equity hedged between 30% and 100%.
  • Sensibility to market
    Medium. Maximizes the capture of alpha versus market beta.
  • Risk profile
    Moderate
  •  
  • Performance
    Long-term capital appreciation
  • Volatility
    + 10%
  • Portfolio Composition
    Stocks
  • Investment style
    Global, Growth, Unhedge
  • Sensibility to market
    High. Maximizes long term growth.
  • Risk profile
    Very Tolerant
  •  
  • Performance
    Eonia + 400 basis points
  • Volatility
    4-6%
  • Portfolio Composition
    Multiactive (stocks, bonds, forex, derivatives, funds,ETFs)
  • Investment Style
    Global, Multistrategy, Flexible.
  • Sensibility to market
    Moderate. Maximize stability.
  • Risk profile
    Moderate
  •  
  • Performance
    Eonia + 600 basis points
  • Volatility
    5-10%
  • Portfolio Composition
    Multiactive (stocks, bonds, forex, derivatives)
  • Investment style
  • Global, Growth. Equity hedged between 30% and 100%.
  • Sensibility to market
  • Low. Maximizes the capture of alpha versus market beta.
  • Risk profile
    Tolerant
  •  
  • Performance
    Long-term capital appreciation
  • Volatility
    + 10%
  • Portfolio Composition
    Stocks
  • Investment style
    Global, Growth, Unhedge
  • Sensibility to market
    High. Maximizes long term growth.
  • Risk profile
    Very Tolerant
  •  

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Email: info@altexpartners.com
Telf: 00 34 91 383 61 30
Fax: 00 34 91 302 70 17

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