High Quality Stocks in Developed Markets

high-quality

This article originally appeared on Advisor Perspectives.

‘Quality’ is becoming widely accepted as an anomaly and is now being designated by many researchers as a fifth factor explaining investment returns along with the four widely accepted factors: beta, size, momentum, and value. This development is in sync with our long-held belief that quality is a distinct investment style.
In this article the authors, Baijnath Ramraika (CFA) and Prashant Trivedi (CFA), present a framework for superior risk-adjusted returns from high quality stocks.
The article makes the following key points:

  • Our definition of quality includes quantitative as well as qualitative variables with sustainability of competitive advantage as a key factor.

  • A simple three-factor quantitative process for selecting HQ stocks outperforms the publicly traded benchmarks and does so with lower risk.

  • A manually selected list of HQ stocks would have generated substantially superior performance even when compared to the performance of quantitatively selected quality stocks.

READ THE FULL ARTICLE HERE
Prashant K Trivedi

About The Author

Prashant K Trivedi, 54, is a B.Sc (Econ.) graduate from Wharton and also a CFA charter holder. He worked in SG Warburg from 1983 to 1991 in Japan, UK and Singapore. Since then he has been the CIO of his family’s office,the Chairman of Multi-Act Trade and Investments Pvt Ltd and the Chairman of Indian Card Clothing Co Ltd. His vast investment expertise covers Currencies, Fixed Income, Equities, Real Estate and Private Equity.

Baijnath Ramraika

About The Author

Baijnath Ramraika, 36, is an MBA from the Darden Graduate School of Business, University of Virginia, is a CFA charter holder, and is also a Chartered Accountant from The Institute of Chartered Accountants of India. Baijnath is a partner at Multi-Act Equiglobe (MAEG) and is a Sr. Portfolio Manager at Multi-Act.


Discover a better way of investing

Know why our clients believe that we help them to not only preserve their valuable capital but also generate more than adequate risk-adjusted returns.

Your Name (required)

Your Email (required)

Phone

reCaptcha (required)

Leave a Reply

20 + fourteen =

Portfolio Management Services (SEBI Registration No. INP000002965) are offered through Multi-Act Equity Consultancy Private Limited (CIN: U67120PN1993PTC074692), which is a wholly-owned subsidiary of Multi-Act Trade and Investments Private Limited; Investment Advisory Services (SEBI Registration No. INA000008589) are offered through Multi-Act Trade and Investments Private Limited (CIN: U65920MH1997PTC109513).