Selecting Quality Stocks in Cyclical Sectors

Director of Research

The three pillars of the Fundamental Growth and Core Equity team’s philosophy are quality, sustainable growth, and reasonable valuation. Within this framework, we have consistently identified high-performing stocks in high-growth industries supported by secular growth trends — such as e-commerce and software.

Although our equity portfolios are concentrated, we still seek diversification across industries; this raises the question of how and when do we invest in companies whose growth is more dependent on cyclical economic factors. This question is particularly topical at present, given the potential for economically-sensitive stocks to relatively outperform against the backdrop of the global recovery from the pandemic.