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Equity process

Our equity investment process is designed to harness our best research ideas in the portfolios we build for our clients. By ensuring that our people work within this structure, we can repeat our investment process - and repeat good performance.

Equity process

Value chain analysis
Our research starts with understanding a company’s business model, competitive advantage, and future strategy. To do this, we gather as much information as we can through proprietary and secondary research, as well as face-to face meetings with company management.

Proprietary research
Our proprietary research portal allows us to disseminate and aggregate our research, as well as present all our research across all desks in a consistent manner. Combined with external data and prices, it allows portfolio managers to make decisions based on the best available information.

View of management
As one of the largest investors in the UK stock market, we have invaluable access to senior management of UK companies, from large corporates to smaller, growing companies. This access allows us to gain an insight into the strategy and business model of each company.

5 year forecasts
We take a five year view, allowing us to take a view throughout an economic cycle. For every company we research, we build a detailed financial model including forecast five year profit and loss, balance sheet and cash flow.

Team review
Once we have thoroughly researched a company, the manager must then convince the whole team of their recommendation. They present their findings at our weekly stock meetings where the team challenges the assumptions underlying the research. After this the stock is rated as a buy, hold, or sell.

Portfolio construction
Portfolio construction is the combination of the best efforts of our research process and the objectives of our clients. Our portfolio construction process focuses on capturing our best research ideas by building portfolios from the bottom up. We expect stock selection to be the main driver of portfolio performance and risk. Risk management is also an integral part of portfolio construction.

 

 

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Scottish Widows Investment Partnership Limited (SWIP) is registered in England and Wales, Company No. 794936. Registered Office is at 10 Fleet Place, London EC4M 7RH. Tel: 0131 655 8500.
SWIP is authorised and regulated by the Financial Services Authority and is entered on their register under number 193707 (www.fsa.gov.uk).