Security Selection
Picking the Companies that Make Up Your Portfolio
Fisher Investments applies investment themes through the portfolio construction process, believing the majority of long-term portfolio performance comes from macro decisions. Individual securities are selected to leverage Fisher’s top-down views, which can provide significant value.
Fisher Investments' Security Selection Process Involves:
Identifying Macro Drivers
Fisher Investments will analyse economic, political, and sentiment drivers to shape portfolio themes and weights. This analysis is applied throughout the individual security selection process.
Prospect List Definition
Basic quantitative screening helps minimise risk and narrow the security prospect list and involves the following steps:
- Screen out any securities with insufficient liquidity or solvency issues.
- Then screen securities based on Fisher Investments’ macro views including valuation and/or style preferences.
- Lastly, conduct an outlier analysis to exclude securities with categorisation, pricing, business activities and/or other characteristics outside of the peer group. This step identifies securities that best leverage Fisher Investments’ higher-level themes.
Strategic Attribute Identification
Fisher Investments seeks firms with underappreciated competitive or comparative advantages relative to peers.
Security Selection
Fisher Investments narrows the prospect list based upon fundamental research, which includes:
Strategic Attribute Preferences
Identifying which attributes best leverage Fisher’s portfolio themes.
Attribute Execution Analysis
Determining if the firm’s management has a cohesive, executable plan for exploiting its strategic attribute(s).
Relative Valuation Analysis
Examining current valuations relative to peers, historical trends, and the market.
Operational Risk Assessment
Analysing operational red flags to understand potential risks unrelated to valuations or day-to-day management.
From Opportunity to Reality
The opportunity set for global equities is vast. Learn how Fisher Investments distills the investment universe to build custom portfolios.
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