Public Equity Mandate > ROI Canadian Top 20 Picks Fund > Sceptre’s Approach

ROI Canadian Top 20 Picks Fund

Sceptre’s Approach

Sceptre’s investment approach is to select companies offered at good value and then assess them for their growth potential. Sceptre then applies a disciplined monthly ranking system to continually stay on top of their select companies.

FINDING THE BEST OF THE BEST:
Sceptre’s Active Investment Process
1.
    Original Research –
    Looking for Value and Growth Potential
  • Gather research from all sectors and companies of interest (the largest 100 TSX stocks)
  • Hold regular meetings with the best “street” analysts – preferably with opposing views
  • Interview company management
  • Review all research internally
3.
    Concentrated
    Portfolio Construction
  • Number 1 ranked stocks
  • Typically 20 stocks
  • Equally weighted
  • Rebalanced at least monthly to reflect changes in ranking and/or market performance
2.
    Monthly Ranking
  • Each manager ranks all stocks based on potential to add value to the portfolio
  • Rank 25 stocks in each of the four categories, numerically from 1 to 4 (best to least potential)
  • Managers debate rankings and arrive at an overall team ranking
  • Rankings reflect outlook for relative returns over next 4 – 12 months
    What Sceptre Looks for in a Company
  • Good quality, profitable
  • Clean balance sheets, no debt
  • Strong cash flow and cash allocation
  • Attractive valuations and strong earnings growth
  • Management with a strong track record

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