Portfolio Manager Nick Thakore's disciplined, risk-
conscious approach to investing

• Focuses on companies poised for growth and increased market share
• Favors stocks trading at compelling valuations
• Seeks an information advantage by "out-analyzing" the competition

Nick discusses his investment strategy

You've been investing for 17 years. What have you learned about finding opportunities in changing markets?

In difficult markets I try to capitalize on investor skepticism. In the downturn that began in 2008, people were assuming scenarios for many companies that proved to be far too pessimistic. I kept my focus on the companies themselves, investing in those that I thought would grow faster than the market over time.

This has been a very emotional market. It's important to keep your discipline, stay open–minded and objective, and not get distracted by the "noise." And when the market is strong, I try to be more cautious, looking for stocks to sell when others may be getting too caught up in the rally.

How do you manage risk?

An important part of my approach is looking for stocks that are trading at attractive valuations. I'm trying to find growing companies, but I am also trying to minimize what I pay for them. If I find a compelling growth story but I don’t believe the stock is reasonably priced, I won’t invest in it. This is important particularly if the growth we’re predicting fails to materialize. This "valuation sensitivity" has helped my fund in up and down markets.

It's important to keep your discipline, stay open–minded and objective, and not get distracted by the 'noise'.

What other strategies help in dealing with volatility?

It’s important to be anticipatory rather than reactionary, such as when sovereign debt markets were signaling a possible problem but equity markets did not seem that alarmed. In the case of sovereign debt concerns, I was able to make some adjustments to the fund’s risk profile ahead of the concerns hitting stocks.

What else sets your approach apart?

Most growth fund managers will tell you owning companies that are growing at a faster rate than the competition often translates into solid stock performance. But predicting which companies and sectors will deliver that rapid growth can be difficult. That's why I spend the bulk of my time striving to "out–analyze" my peers, extensively researching where those growth opportunities lie and what catalysts for change are likely to develop.

Are you still optimistic about stocks in today's market?

Although risks remain, I believe earnings expectations are still reasonable, and in my view there is still room for many companies, particularly in cyclical sectors, to grow their margins. When you consider global growth, along with all of the signs that the economy has gained traction, I believe there are substantial opportunities to make money in stocks today.