Investment Philosophy
Stock selection, a spirit of origin
Stock picking consists of selecting stocks according to their own characteristics and not their membership of a sector or an index.
Our investment process is rigorous and based on in-depth and autonomous financial research. This enables us to think independently, remain realistic and have varied investment ideas adapted to market conditions.
Our range of equity funds is deliberately narrow and all of our funds have a single objective: performance.
We are equity markets specialists and this is where we focus.
Our approach is based on fundamental analysis and is divided into 3 steps:
1. Understanding through financial analysis
Above all, we seek to understand the companies in which we are likely to invest: discover the particularities of their businesses, the barriers to entry, what is at the origin of their success or their difficulties, their strategy, their management.
We systematically assess executives on qualitative and quantitative criteria to assess their motivation and skills to ensure that the company is managed to create value for all its shareholders, and therefore for our investors.
The objective of this analysis is to identify the risks and opportunities of each potential investment.
2. Using our judgement to value companies
We draw conclusions from the analysis phase to value a company. This work includes forecasting its financial results and analyzing its current and future financial structure.
The attention we give to valuation is indeed an essential characteristic of our portfolio management mission.
Our valuations also take into account non-financial criteria such as the quality of corporate governance.
Our conclusions are the result of our independent research.
3. Act according to our convictions
After having explored each case in detail, we translate the two previous steps into investment decisions.
We buy companies that we consider undervalued regardless of current investment fads and we sell overvalued companies even if their short-term future looks clear. In short, we structure portfolios according to the convictions resulting from our work.
Once invested, we remain vigilant and proactively follow-up on all our investments: frequent contact with management teams, field visits and regular reviews of our investment theses are part of our daily life.
Discipline, both in buying and selling, is essential to our process. Portfolio management requires constant focus and our collegial approach enables us to meet this requirement.
A specific feature: stock picking applied to long short management
Long / short management makes it possible to associate long positions with short positions within the same portfolio. A long position wins when the share price rises; conversely, a short position wins when the share price falls. In concrete terms, this involves buying stocks in companies that we believe are undervalued while selling others that we believe are too expensive.
Moneta Long Short aims to differentiate itself in terms of risk/return since it is positioned between long only equity funds and diversified funds. It provides partial market exposure with less volatility and significantly reduces the downside risk compared to a long-only equity fund.
"While a traditional manager will be forced to exclude companies deemed too expensive from his investment universe, we can sell them and try to take advantage of a downturn. This strategy multiplies the possibilities of generating performance."