The implementation of Gratry’s investment process resembles the construction of a three dimensional puzzle. The three dimensions are 1) Country; 2) Sector; and 3) Security. Our process combines top-down analysis of countries and sectors with bottom-up, fundamental security selection.
We analyze macro economic, monetary, and valuation factors when assessing the relative health and strength of a given sovereign market. A proprietary scoring system is maintained whereby each country receives a grade relative to its performance in these three main categories. Our country grades help guide our relative country weightings in the portfolio. Each country in our universe is reviewed every 4 weeks.
We invest predominantly in large capitalization companies that exhibit the following characteristics: revenue and earnings growth rates in excess of their peers; quality, meaning strong balance sheets and credit ratings, and credible management teams with a history of success in allocating capital; and reasonable valuations relative to their peers and future earnings growth rates.
Portfolios are prudently diversified and contain up to 40 securities. Our long-term orientation results in low average annual turnover.