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Investment Strategy

SKAGEN Global invests in undervalued companies from around the world with identifiable catalysts to trigger their revaluation over a reasonable period of time. The fund is actively managed and employs an unconventional investment strategy based on three pillars:

1. Unconstrained mandate

A broad footprint means the portfolio’s sector, geography and market cap exposure may change materially over time, depending on where the portfolio managers find the best investment opportunities in terms of company fundamentals. This flexibility, combined with the portfolio managers’ ability to adapt to different market environments in a forward-looking way, offers a distinct competitive advantage.

2. Long-term perspective

A multi-year horizon guides the financial analysis and investment decisions of the portfolio managers who evaluate stocks based on long-term forecasts rather than quarterly results. This creates an environment conducive to finding investment opportunities in companies with an underappreciated ability to compound in value.

3. Partnership approach

Close alignment of interest is sought between company management and shareholders which places a high value on strong (or improving) corporate governance. The portfolio managers believe that thorough analysis of both quantitative (e.g. share ownership, management incentives) and qualitative (e.g. competence, integrity) factors cannot easily be replicated by a computer, which therefore provides SKAGEN Global with a distinctive edge.

Portfolio Characteristics

SKAGEN Global’s investment approach is benchmark agnostic and the portfolio managers have the freedom to invest away from the index in their highest conviction ideas to generate the best possible risk-adjusted returns.

SKAGEN Global typically contains a concentrated portfolio of 30-50 mid / large cap companies and select small cap positions with the top 35 holdings representing 80-90 percent of assets. The fund targets companies with a robust (or improving) business model where the long-term value creation potential is not yet reflected in its share price. This may be due to short-term noise but where management can get the company back on track without relying on external factors.

Holdings must have downside protection, typically from their core earnings, cash flow growth and / or cost restructuring coupled with a solid balance sheet. To further reduce risk, the fund maintains a sensible balance between sectors, which have a soft portfolio limit of 30 percent, and geographic regions. Its investment horizon is at least 3-5 years but can be significantly longer as the portfolio managers attach greater value to fundamentals than short-term trends.

 

Read the Investment strategy PDF for SKAGEN Global

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Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager's skill, the fund's risk profile and management fees. The return may become negative as a result of negative price developments.