NS Partners European Equity

Highlights

• Unique Investment Philosophy: Emphasizes inflection points in liquidity conditions and stocks with improving economic profitability
• Differentiated Investment Process: Designed to steer fundamental stock selection to countries with a favourable market environment
• Focused Risk Management: Employs a factor risk model designed to avoid unintended country, sector or company exposure

Objectives

• Long-term growth through investments in equity securities listed on European stock exchanges
• Return Objective: MSCI Europe Net Index + 2%-4% per annum over a market cycle
• Risk Objective: 2%-4% average tracking error per year over a market cycle

Investment Philosophy

• Country selection matters – excess money moves both asset markets and economies
• Economic profitability drives stock selection – securities generating high or improving economic profitability relative to the market will outperform
• Peer review discipline – revalidate, continually test convictions, ensure tight capital discipline

Investment Process

• Macroeconomic and Liquidity Analysis
  • Changes in liquidity conditions influence security prices
• Country Selection
  • Country weights based on conviction, relative return opportunity and risk
• Stock Selection
  • Focus on securities expected to have improving economic profitability
• Portfolio Construction
  • Macroeconomic liquidity analysis provides the framework for portfolio construction
  • Portfolio of 40 – 60 securities
• Portfolio Risk and Review
  • Formal monthly meetings to peer review portfolio
  • Employ a factor risk model to avoid unintended country, sector or company exposure