In selecting investments, Portfolio 21 uses a bottom-up approach, concentrating on the specific characteristics of individual companies from the global universe of securities. From this broad and inclusive opportunity set, we focus on companies that we believe have good growth potential and excellent environmental practices, applying financial, social and environmental criteria appropriate to a company’s economic sector and industry.
Our analysts and portfolio managers conduct in-depth research using information provided by corporate documents and through direct engagement with company managements. We also seek relevant information from a diverse group of third parties, including non-governmental organizations, government agencies and independent research companies.
Companies able to sustain success over the long term share certain defining characteristics. We have found that these characteristics apply whether the company is an established global market leader or a smaller regional player with a new or better product.
We believe that valuation is an important aspect of security selection, and we analyze a company’s stock price relative to its history, the market and its peers in our effort to avoid overpaying for excellent companies.
Our security selection process is the main driver of portfolio construction; we concentrate on owning the best companies as opposed to mirroring the market index. Portfolio management is geared to provide exposure to opportunities throughout the world and across economic sectors. Through this diversification, coupled with our high quality security selection, we seek to control risk.
Diversification does not assure a profit or protect against a loss in a declining market.