US Focus
Growth
Verus U.S. Focus Growth
Purpose
The Verus U.S. Focus Growth strategy seeks to achieve long-term growth by building a concentrated portfolio of outstanding businesses with competitive advantages and the potential for sustained superior growth.
Investment Objectives
1. Concentrated Portfolio – “High Active Share”
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Portfolios are constructed with a select group of high-quality companies characterized by strong balance sheets; abundant free cash flow; strong ROW (>20%); stable to improving margins; and real, organic revenue growth.
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Best Ideas Portfolio – impartial to index sector weightings and index position weightings.
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The Focus Growth strategy invests in ~ 20 companies
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Long Holding / Compounding Period – “Time Arbitrage”
2. Long-term focus on company fundamentals and competitive advantages.
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Portfolio returns are generated through the compound earnings growth of competitive advantaged companies owned for many years – Share prices follow earnings growth.
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Conviction: the flagship Focus Growth portfolio has invested in a total of ~ 100 companies since inception.
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Average holding period is approximately five years.
3. Risk Management – “Don’t lose mentality”
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Only invest in financially superior/competitively advantaged businesses – margin of Safety.
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Strict and disciplined focus on long-term preservation of capital.
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Portfolio construction parameters include position size limits and sector weight limits.
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Currency, policy, and political risks are considered in general and specifically with regard to investing outside of the United States.
4. Weighing Machine vs. Voting Machine
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No market predictions – fully invested at all times.
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Unemotional selling – an absolute return mentality.
5. Outcome Orientation
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Absolute return mentality seeking double-digit returns with lower levels of risk.
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More than 28 years of evidenced success through consistent application of the Polen Capital investment process.