Our Philosophy
Armytage is a Value manager with a fundamental investment approach designed to identify quality businesses trading at a considerable discount to valuation.
The process is guided by the following core beliefs:
Equity markets are not perfectly efficient and the true value of a business is not always reflected in its share price;
Undervalued stocks can be identified through active research and insightful analysis;
Capital preservation is critical to wealth creation; and
A relative-value approach to investing delivers a more consistent and superior risk-adjusted outcome than deep-value.
The companies that Armytage typically invests in are those with strong and reliable management, good profit and dividend growth expectations, reasonably predictable future profits and cash flows, and a very clear business model. In contrast, Armytage tends to avoid investing in businesses that lack pricing power in their relevant market, or those that are higher risk, early-stage research and development or exploration based companies.
A Three Stage
Investment Process
Intensive bottom-up research is the cornerstone of the entire process supplemented by top-down economic and thematic views. The process is disciplined and consistently applied using a number of proprietary qualitative and quantitative techniques to ensure that targeted companies have been thoroughly scrutinised.
Stage 1: Defining the Investment Universe
The first stage of the process is to narrow the number of stocks in the investment universe by applying a number of screens. This approach systematically eliminates companies that do not meet certain minimum standards, allowing the investment team to focus more intensely on companies of potential interest.
Stage 2: Bottom-up Fundamental Company Research
Armytage’s research programme is focused on understanding the key drivers of business performance and returns, namely people, operations, products and services and market dynamics. For companies remaining in the investment universe, Armytage undertakes a detailed assessment of executive management, interviews competitors and suppliers, reviews financials and forms a clear view on the outlook for the company’s industry.
Stage 3: Portfolio Construction
Risk management and capital preservation are key themes underlying the portfolio construction framework. With a focus on actively managing down-side portfolio risk for investors, Armytage constructs an efficiently diversified portfolio of high quality, undervalued companies, and invests for the long term (typically at least 3 to 5 years) in an effort to maximise after-tax returns.
During the portfolio construction stage, the Armytage Australian Equity Income Fund and Strategic Opportunities Funds also employ a lower risk options overlay to enhance the portfolio’s overall yield and reduce volatility relative to the market, providing a stable platform for the delivery of strong and consistent distribution payments to investors.
Learn More
Read the Armytage Executive Team Profiles.
Please contact us if you would like to speak to a member of the Executive Team about our investment products and services.
Find out about our Australian Funds , SMA Portfolios, Individual Managed Accounts or International Funds.