Fisher Funds offers a broad range of investment solutions allowing investors to tailor an investment strategy suitable to their stage in life and investment goals.
Whilst our products cover the entire risk and return universe there are some common guiding principles that link them together.
Purpose
We are a specialist investment manager. Investing is all we do; it is our area of expertise.
People
As Fisher Funds has expanded its product range we’ve built a team of experts who provide investors with a unique skill set, a track record of strong performance and investing experience. Our nine strong investment team is hand-picked and contains many of the best investment professionals in New Zealand. Collectively the team has more than 100 years investing experience.
Our “best of breed” approach ensures that you benefit from experienced, informed decision making by seasoned investment professionals.
Potential
Our focus is on what a company can be, not what it is. Whilst it’s easier to look in the rear view mirror, investing is about the road ahead. What are the key strategies a business is pursuing? Do we think these are achievable? Are there competitive pressures?
This is where our research really comes into play. We only invest after completing a thorough analysis of each business, its competitors and management. This approach is as valid for our infrastructure and fixed interest investments as it is for our share market investments.
Profits
The key for any company to be successful is profits. It is the reason people go into business after all. Over the long run, profit or earnings growth is the ultimate driver of a company’s share price and delivering a return for investors. It is also helps fuel (or pay for) continued expansion and development of the business. Similarly, with fixed interest investments, we need to know that the government or company behind them will have the ability to meet interest payments and repay capital when it’s due.
Process
Fisher Funds has generated attractive long term returns over many years. We have done this by having a well thought out, disciplined investment approach. Whether you invest for growth or income, our investment approach is research driven. Whilst we consider market perceptions of investment opportunities, we rely heavily on our own “hands-on” research. Over time we have found that there is no substitute for conducting our own company visits and meeting and developing good relationships with management teams. This is the best way to understand investment potential and at the same time identify any possible risks.
All of our investment decisions are governed by and answerable to an Investment Committee.
Active Investment Managers
Fisher Funds is what’s known as an active investment manager. Rather than simply track an index or copy the market, our portfolios are hand-picked and are designed to optimise returns for investors in line with investment objectives.
We have broad asset allocation guidelines that we work within but we have the ability to make adjustments at any time on behalf of investors if we feel that the investing climate is changing and we want to enhance returns or reduce risk. We continuously assess the relative merits of one investment against the rest of the portfolio, and against other prospective investments.
Investing Timeframe
The decision to invest can be complex. One of the most important considerations is your investment timeframe. Investing typically requires a long term approach. Markets can move up or down from day to day on very little information however it is the long term view and performance that ultimately dictates. We think in terms of 3 – 5 years so that each of our investments is given enough time to perform, but our portfolios are flexible enough to meet the needs of investors whose circumstances change within shorter timeframes.
Our investing approach depends upon the risk and return profile of the investments.
Growth investments We favour successful growing companies
Our Growth Funds focus their investments in the shares of growing New Zealand, Australian and other International companies that have the potential for substantial business growth. Our approach is all about gaining an information advantage. Many New Zealand, Australian and International companies are world class in product, but remain largely ‘undiscovered’ by the world’s investing community, partly because they are focused more on the doing than the telling. Such companies are often too small to be noticed by larger investors and can remain undervalued in spite of achieving real earnings growth. Fisher Funds’ objective is to identify overlooked, growing companies that have the ability to double their profits over a 3-5 year period. If we buy and hold such companies, we know that their share prices will ultimately follow suit.
It is not our intention to buy shares in new or unproven companies, nor do we look for bargain stocks. We look for quality. Once we buy shares in a company, we generally hold them for the long term, unless the fundamental reason for buying no longer exists. After all, if you find a great business, why would you not want to hold on to it forever? We are mindful of price, and we seek to avoid overpaying for growth. But we are careful not to sell at the first sign of success, only to miss years of subsequent performance.
We strive to know more about our Portfolio companies than anyone else
We are close to all our Portfolio companies, visit them regularly and get to know the management teams well. Before investing we like to first meet the management and we pride ourselves on the relationships that we have established with the management teams of many successful businesses.
Our favourite companies will be our largest investments
We are stock pickers who invest in companies on the basis of their individual merits. The company that we like the most will have the largest position in the Fund. Our portfolios are concentrated, typically having between 10 and 30 stocks in each of the New Zealand and Australia Funds at any one time and 30 to 40 internationally. We do not want too many holdings, diluting our efforts and knowledge, but we want enough to reduce the risk if something goes wrong. We believe there will always be companies that will do well, irrespective of the economy or market environment. We are constantly searching for these businesses.
We have the ability to invest in both listed and unlisted companies. However you can generally expect that at least 90% (by value) of the Growth Fund portfolio will be investments in listed companies. Although we like the idea of buying an unlisted company at a relatively low price, we are mindful that the listed environment gives us greater protection and ensures that we get regular information about each company.
Income investments Get the big picture right first
Our portfolio construction process starts by forming a detailed understanding of the global economic environment. This helps set the basic portfolio parameters, including duration, geographical preferences, sector weightinhgs and credit quality. Our investment team utilise a vast array of global resources in which to build this picture. These include both the first-hand knowledge we gain from our extensive travel as well as the use of proprietary analytical tools. In short, this initial phase aims to highlight the markets where our investments have the best chance of success.
Then comes the detailed analysis of potential investments
Driven by independent fundamental research we aim to identify investments that offer attractive long-term value and high current income for our desired level of risk. Our credit analysis focuses on three major areas, the borrower's solvency (ability to meet long-term obligations), liquidity (ability to meet short-term obligations), and projected profitability. As part of this process we have developed a set of strict, pre-defined fundamental requirements that borrowers must meet in order to be considered for potential investment.
Putting the pieces together
The Fund has the flexibility to allocate its investments among a broad spectrum of government, corporate, mortgage-related and other debt securities. Once an attractive investment opportunity has been discovered the portfolio manager will assess all fixed interest securities on issue by that borrower in order to optimise the potential return from that investment, for our given level of risk. This selection process combines our fundamental understanding of the borrower, the technical aspects of security and our macroeconomic outlook.
Infrastructure investments Focused top down investment approach
We look globally for industries where there are attractive tailwinds providing new opportunities within specific sectors and geographies. Our operational experience and involvement allows us to identify a trend early and invest before the space becomes too popular.
We believe returns are driven primarily by being exposed to favourable “mega-trends” that support a long term investment perspective. Not all infrastructure sectors are equally exposed to favourable overriding trends.
Strong and reliable cash flows drive returns
We aim to invest our time and money in companies with strong, predictable cash flows that drive
investment returns throughout the investment cycle. In many cases, monopoly or dominant positions help provide strong pricing power and protect earnings against inflation and other economic headwinds.
Well placed to pick stocks
Managers with operating experience and expertise are the best placed to pick stocks within a specific sector and identify assets that are the best in their category. Detailed analysis of investment targets, supported by input from operational personnel, improves decision making. Infrastucture is a sector that is typically occupied by government and investors with access to large pools of capital – we expect that individual investors will benefit from associating with parties who are experienced and well connected with such ‘big picture’ participants.
We believe that regardless of the current market or economic environment, there will always be companies that will do well, particularly in the infrastructure sector which is a necessary ‘backbone’ of many economies.
Long term investors can achieve superior returns
Infrastructure investments are typically long term in nature – roads, bridges, ports and rail systems often cannot be constructed in a matter of months. We base our investment analysis on long term trends and are not distracted by every earnings announcement or market fluctuation. Once an investment is undertaken, we will persist until either the trends are fully valued or new information allows us to form a better view.
