ACM GI, Global Growth Trends Portfolio
Managed on a team basis, the ACM GI Global Growth Trends portfolio aims to provide long-term capital growth through investment in a global portfolio of equity securities. The managers will typically invest in companies with strong earnings growth potential in the fastest global industries.
The portfolio consists of six sub-portfolios: communications & information technology; healthcare; capital goods/infrastructure; energy; consumer growth; and finance. It is managed by the equity research team of Alliance Capital, rather than by a single portfolio manager, enabling the fund to take advantage of ACM's extensive research strength.
The investment style is based upon a disciplined bottom-up investment process, with stock selection performed by the sector specialists. In their stock selection, each sector specialist will focus on their own investment criteria. For example, the financial specialist considers valuations and, increasingly, earnings growth prospects, while the technology specialist has focused more on earnings momentum than valuations. The remaining four sector specialists, healthcare, capital goods/infrastructure, energy and consumer growth look for investments offering growth at the right price.
The investment committee meets every quarter to decide sector weightings and allocate assets between the six sub-funds. The director of research and regional research heads in the US, Europe and Asia are responsible for making sector decisions. The fund is not constrained by sector or country restrictions and tends to have a bias towards the US.
In terms of portfolio composition the manager expects to include the best ideas generated from the sector specialists, focusing on leadership companies in each industry which ACM has identified as having strong prospects for future earnings growth. There are no formal restrictions placed upon the number of stocks included in the portfolio but historically the fund has typically featured between 100 and 140 stocks. The fund will usually be fully invested and will not hold more than 10% in cash at times of excess volatility in the market.
The fund is geared towards aggressive monetary and fiscal policy delivering a positive effect on the economy, but it expects equities will remain relatively volatile in the near term. An overall 'V' shaped recovery is predicted, however the timing of the recovery continues to depend on the geopolitical situation. Any further terrorist attacks or military action could extend the timing of a recovery even further.
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