At Afena Capital, our core competency is equity valuation. Our ability to measure the true worth (intrinsic value) of a company through an operating business cycle is what we are good at. The investment team operates under a single underlying investment philosophy applied through a robust and disciplined investment process.
Shares that comply with our philosophy are trading at less than their intrinsic value. We also take into consideration the quality of the business, the simple valuation metrics it is currently trading on and its prospective earnings dynamics.
We ensure the share is well researched by interrogating the analyst's research, models and assumptions. We try to determine not only how far a share is trading from its estimated intrinsic value but also the level of conviction we should have in that intrinsic value.
The portfolio managers can only buy shares that are on the house's "Buy List". This ensures that the individual portfolio managers comply with the house's philosophy at all times.
The construction of multi asset portfolios is underpinned by our belief that equities generate the best long term real returns versus bonds and cash. We also believe that equity valuation is the best indicator of when to be, or not to be, invested in the equity market. Therefore a quality and proven equity valuation competency can be used to construct a multi asset portfolio with a capital growth priority when valuations are favourable and capital preservation priority when equity valuations are unfavourable, thus generating significant alpha from asset allocation and equity stock picking.