Vontobel’s Quality Growth boutique launched a global equity income strategy based on its proven, fundamental research-driven investment philosophy.
“For nearly two decades, we have been investing in high quality growth companies –franchises with high and stable returns on equity, strong balance sheets and strong free cash flow generation. These are the types of businesses that we feel can sustain and grow dividends over time. So a natural synergy exists between our traditional focus on quality growth investing and our Global Equity Income Strategy,” said co-portfolio manager and director of Research Igor Krutov.
“When constructing our Global Equity Income portfolio, we look at the total return of each individual security and then create a portfolio that balances dividend yield and earnings growth.” added co-portfolio manager Ramiz Chelat.
In their whitepaper “Generating Equity Income through a Quality Growth Approach“, Igor Krutov and Ramiz Chelat analyse the interaction between dividend yield and quality and found strong evidence of the benefits of a quality focus. Among high dividend yielding stocks, better quality companies as a group produced higher returns with less volatility than lower quality names. This combination of high dividend yield and quality can be an attractive long-term solution for investors.