Global Equities

Global Leaders strategy

Investing in 30 leading value creators

Simple yet unique approach

Investing actively in 30 value-creative and diversified “global leader” stocks with sustainable practices and growth opportunities

Core expertise

Experienced and stable senior investment team with more than USD 4.5 bn in AUM, of which over USD 2 bn for the global leaders strategy

All-weather strategy

Able to stay invested over the market cycle thanks to upside participation and downside protection.

Our approach

Focus on stocks whose potential CFROI^® resilience has not been fully identified by the market

Our approach seeks to identify companies that can maintain high and sustainable returns over a much longer period than the market would usually expect. Strong brands, technology or innovation leadership, as well as leading market shares are some of the attributes of such companies, which enable them to build high and sustainable entry barriers. This, in turn, will help those companies beat the conventional expectations of eroding returns over time because of rising competition or industry disruption.

Shares of these “global leaders” are able to surprise the market positively by maintaining a positive spread between their Cash Flow Return on Investment CFROI® (Source: Credit Suisse HOLT) and their cost of capital (CoC) over a much longer period than the market would usually expect. They have historically outperformed the overall equity market.

A concentrated yet diversified portfolio

Academic research has shown that beyond 30 stocks, the marginal impact of each additional stock to diversification is minimal.

Portfolio risk per number of holdings

Source: Credit Suisse HOLT; UBP; Elton, E. J., & Gruber, M. J. (1977) “Risk reduction and portfolio size: An analytical Solution”. Meir Statman, analysis based on an equally weighted portfolio of random NYSE stocks.

“Whereas stocks were selected randomly in the studies, active managers can add value by avoiding large sector or country biases and constructing a portfolio with exposure to different growth drivers. This has proven to be an efficient solution to lower portfolio volatility and limit the impact of sector and style rotations. Therefore, maintaining 30 names at all times in UBP’s Global Leaders Equity strategy diversifies risk sufficiently."

Martin Moeller, Senior Portfolio Manager and Co-Head of the Swiss & Global Equity Team

Key benefits

Simple yet unique and consistent investment process:
Based on proprietary forecasts, identifying and investing in companies with superior levels of value creation
All-weather strategy:
Proven resilience during downsides, and upside participation

Diversified portfolio:
Diversified and balanced exposure to shield from sector or style rotations, with relative performance historically driven by stock selection
Holistic ESG approach:
ESG assessment integrated throughout the selection and investment process, with strict carbon footprint and global norms exclusion criteria.

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Positioning in the current context

2024 Outlook

Context: Constructive but with some persisting uncertainties. GDP growth recovery ahead, but requires business sentiment to improve.
Positioning: Strong fundamentals and exposure to structural growth trends

Corporate earnings

Context: Remaining risks. Earnings recovery expected but orders and margins at risk

Positioning: Visible and resilient earnings growth

Inflation & interest rates

Context: Easing but sticky inflation.
Volatile yields leading to sector and factor rotations

Positioning: Strong pricing power

Meet the Swiss & Global Equity team

“Our team is experienced and has been very stable over time with very little turnover in key members. We have been following the same investment philosophy and analytical process around the CFROI® concept since 2006, consistently striving for value creation.”

Eleanor Taylor Jolidon, Senior Portfolio Manager and
Co-Head of the Swiss & Global Equity Team

CFROI® - Source: Credit Suisse HOLT

INSIGHT

Building an efficient equity portfolio of global leaders today

Research has shown that 30 stocks is enough for a portfolio to efficiently diversify risks – and this without even taking into account the added benefits of active stock selection.

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