Ocean Equity

Investment Philosophy

An investment philosophy represents a set of core beliefs about how investors behave and markets work. To be a successful investor, you not only have to consider the evidence from markets but you also have to examine your own strengths and weaknesses to come up with an investment philosophy that best fits. Investors without core beliefs tend to wander from strategy to strategy, drawn by anecdotal evidence or recent successes, creating transaction costs and incurring losses as a consequence. Investors with clearly defined investment philosophies tend to be more consistent and disciplined in their investment decisions.

Our investment philosophy is formulated around people, products, and services. People ultimately drive businesses for the betterment of society by providing choice via differentiated products that have the potential to deliver better societal outcomes. We think it is critical that businesses serve a societal requirement and responding to this ever-shifting obligation requires careful, strategic thought and capital allocation. This strategic thought process encompasses making the right investment decisions at the outset and, critically, holding onto these businesses for the long-term; both of which require strong analytical skills and patience.

Investment Process

Our investment process is formulated around the identification of very high-quality businesses. Typically such business would have high, sustainable and expanding gross and operating profit margins, low or no debt, and robust and growing competitive positions. This allows our businesses to reinvest excess cash back into the core business at attractive rates of return to deliver compound growth. We believe this is the holy grail of investing. Furthermore, we like management to have been in the business or sector for at least 10 years as this can create powerful outcomes in terms of capital allocation, staff retention levels and importantly the successful navigation of uncertain economic environments. Time invested in the market in high quality businesses, coupled with attractive economics, has the potential to be very rewarding for long-term minded, patient shareholders.

Fund Features

• Emphasis on total return (TR) via blend of capital and dividend growth
• Focus on quality companies with high returns on capital and strong cash flows
• High conviction, low turnover – ‘buy and manage’ approach
• 30 – 40 holdings
• Investing across the market cap universe
• Preservation of capital is paramount over the business cycle
• Predominantly UK and up to 20% Overseas from a listing perspective

Investor Profile

The fund may appeal to investors who:

• Plan to hold their investment for the long-term
• Are prepared to accept the risks associated with the volatile nature of equity related investments
• Want total return through a blend of capital and income growth

Key Details

Benchmark CBOE UK All Companies

IA Sector UK All Companies

Launch Date 14 May 2018

Holdings 35

Prospective yield 2.2%

Div ex dates 1/5 & 1/11

Div pay dates 30/6 & 31/12

The Fund aims to achieve capital and income growth, and to provide a return (after fees, charges and other expenses payable out of the Fund) in excess of that of the CBOE UK All Companies Total Return Index over the long-term.

Ocean Equity was launched in 2018 and has achieved a double AA rating from Citywire, a 5 Crown rating from Trustnet and 5 Star ratings from both Morningstar and Lipper.