SOLUTIONS > GROWTH STRATEGIES
Global Value ESG Model
Utilizing our proprietary quantitative ESG methodology, companies are ranked on their commitment to environmental & social change, governance policies, culture, profitability, and shareholder alignment. Portfolios are comprised of securities selected based on our fundamental research and/or quantitative approach.
Key Features
UTILIZES OUR PROPRIETARY ESG APPROACH
Our proprietary quantitative ESG system ranks companies on their commitment to environmental & social change, governance policies, culture, profitability, and shareholder alignment. Learn more.
VALUE APPROACH
Our most important pillar is our value investment philosophy.
Global
Our “go anywhere” approach provides more opportunities.
Strategy Overview
The Global Value ESG Model is generally for clients whose principal objective is long-term capital appreciation.
The Model utilizes our proprietary quantitative ESG methodology to rank global large cap equities. Portfolios are comprised of securities selected based on our fundamental research and/or quantitative approach. Our proprietary TRACTM system is used in an effort to optimize buy and sell decisions for targets and portfolio holdings.
Key Details
| Inception | May 1, 2021 |
| Investment universe | Global large cap |
| Style | Value |
| ESG Approach | Generation PMCA ESG Methodology |
How we find great companies doing great things
GOVERNANCE SCORE
Review of board diversity, board tenure, and number of independent directors
ENVIRONMENT & SOCIAL IMPACT SCORE
Analysis of environmental and social impact achievements, including weightings in leading ESG ETFs, UN Sustainability rankings, and environmental and social impact awards
CULTURE SCORE
Analysis of remuneration policies, management salaries, and employment opportunities
VIRTUOUS CYCLE SCORETM
High profitability and return on invested capital to fuel social and environmental investments
SHAREHOLDER ALIGNMENT SCORE
Emphasis on management teams that are aligned with shareholders, have ownership of shares, and exhibit prudent capital allocation
Investment Process
1. SECTOR EXCLUSIONS & ESG RANKING
SECTORS EXCLUDED FROM UNIVERSE:
- ENERGY MINERALS
- CHEMICALS
- TOBACCO
- NON-ENERGY MINERALS
- FIREARMS
- UTILITIES
Our Commitment to Sustainable Investing
ESG RANKING METHODOLOGY:
25%
20%
20%
20%
15%
2. STOCK SELECTION: A HYBRID APPROACH
FUNDAMENTAL PICKS: STOCK IDEAS FROM OUR INVESTMENT TEAM
Generation employs fundamental research and subscribes to a value investment philosophy. We analyze a company’s operations, finances, and valuation to assess its risk and reward potential.
We believe a value strategy offers two advantages:
- A stock purchased below our estimate of its intrinsic or fair market value offers the potential for outperformance as the stock ascends to fair value.
- Stocks trading below their fair value offer a “margin of safety”; that is, downside risk is mitigated because these stocks are detached from their fair value.
WHAT DO WE LOOK FOR?
+ Good business franchise
+ Strong balance sheets
+ High return on capital
+ Proven management team
+ Competitive advantages
QUANTITATIVE PICKS: TOP-RANKED STOCKS ACCORDING TO OUR PROPRIETARY RANKING METHODOLOGY
Our Global ESG Value strategy utilizes our proprietary ranking methodology that ranks companies on combined valuation, business quality, financial strength, and momentum metrics.
VALUATION
Stocks are ranked on valuation ratios such as P/E, EV/EBITDA, P/CF, and our own proprietary valuation ratios.
QUALITY
Stocks ranked on performance metrics such as return on equity, return on invested capital, etc.
FINANCIAL STRENGTH
Stocks ranked on debt-to-equity, interest coverage, Piotroski F Score, etc.
MOMENTUM
Stocks ranked on relative performance over the last 12 months.
3. PORTFOLIO CONSTRUCTION
FUNDAMENTAL PICKS
Fundamental ideas that rank in top-half of ESG rankings become candidates for inclusion.
QUANTITATIVE PICKS
Quantitative picks are added after portfolio populated with fundamental picks.
PORTFOLIO
Portfolio is comprised of fundamental and quantitative picks.
4. PORTFOLIO MANAGEMENT
CONTINUOUS MONITORING
Positions are eliminated when their ESG ranking falls to the bottom half of the universe or they adopt business lines (e.g., firearms) that would place them in excluded sectors.
PORTFOLIO OPTIMIZATION
Stocks are sold as they approach their estimated fair values, when our outlook has changed, or when sell signals are triggered in our proprietary trading systems. Our proprietary trading systems help optimize the timing of our buys and sells.
Learn more about our Global Value ESG Model
Global Value ESG Model
Utilizing our proprietary quantitative ESG methodology, companies are ranked on their commitment to environmental & social change, governance policies, culture, profitability, and shareholder alignment. Portfolios are comprised of securities selected based on our fundamental research and/or quantitative approach.
Overview
-
UTILIZES OUR PROPRIETARY ESG APPROACH
Our proprietary quantitative ESG system ranks companies on their commitment to environmental & social change, governance policies, culture, profitability, and shareholder alignment. Learn more.
VALUE APPROACH
Our most important pillar is our value investment philosophy.
Global
Our “go anywhere” approach provides more opportunities.
-
Inception
May 1, 2021
Investment Universe
Global large cap
Style
Value
ESG Approach
Generation PMCA ESG Methodology
-
The Global Value ESG Model is generally for clients whose principal objective is long-term capital appreciation.
The Model utilizes our proprietary quantitative ESG methodology to rank global large cap equities. Portfolios are comprised of securities selected based on our fundamental research and/or quantitative approach. Our proprietary TRACTM system is used in an effort to optimize buy and sell decisions for targets and portfolio holdings.
How we find great companies doing great things
GOVERNANCE SCORE
Review of board diversity, board tenure, and number of independent directors
ENVIRONMENT & SOCIAL IMPACT SCORE
Analysis of environmental and social impact achievements, including weightings in leading ESG ETFs, UN Sustainability rankings, and environmental and social impact awards
CULTURE SCORE
Analysis of remuneration policies, management salaries, and employment opportunities
VIRTUOUS CYCLE SCORETM
High profitability and return on invested capital to fuel social and environmental investments
SHAREHOLDER ALIGNMENT SCORE
Emphasis on management teams that are aligned with shareholders, have ownership of shares, and exhibit prudent capital allocation
Investment Process
-
SECTOR EXCLUSIONS & ESG RANKING
The following sectors are excluded: Energy Minerals, Chemicals, Tobacco, Non-Energy Minerals, Firearms, and Utilities.
ESG RANKING METHODOLOGY
The ESG Rank is composite score comprised of the following: 25% Environmental/Social Score, 20% Shareholder Alignment Score, 20% Governance Score, 20% Virtuous Cycle Score, 15% Culture Score
-
Portfolios are comprised of securities selected based on our fundamental research and/or quantitative approach.
FUNDAMENTAL PICKS: STOCK IDEAS FROM OUR INVESTMENT TEAM
Generation employs fundamental research and subscribes to a value investment philosophy. We analyze a Company’s operations, finances, and valuation to assess its risk and reward potential.
We believe a value strategy offers two advantages:
- A stock purchased below our estimate of its intrinsic or fair market value offers the potential for outperformance as the stock ascends to fair value.
- Stocks trading below their fair value offer a “margin of safety”; that is, downside risk is mitigated because these stocks are detached from their fair value.
QUANTITATIVE PICKS: TOP-RANKED STOCKS ACCORDING TO OUR PROPRIETARY RANKING METHODOLOGY
Our Global ESG Value strategy utilizes our proprietary ranking methodology that ranks companies on combined valuation, business quality, financial strength, and momentum metrics.
-
FUNDAMENTAL PICKS
Fundamental ideas that rank in top-half of ESG rankings become candidates for inclusion.
QUANTITATIVE PICKS
Quantitative picks are added after portfolio populated with fundamental picks.
PORTFOLIO
Portfolio is comprised of fundamental and quantitative picks.
-
CONTINUOUS MONITORING
Positions are eliminated when their ESG ranking falls to the bottom half of the universe or they adopt business lines (e.g., firearms) that would place them in excluded sectors.
PORTFOLIO OPTIMIZATION
Stocks are sold as they approach their estimated fair values, when our outlook has changed, or when sell signals are triggered in our proprietary trading systems. Our proprietary trading systems help optimize the timing of our buys and sells.