Quality Portfolio Update
Quality stocks are built for the long-term. The stockmarket is in a bubble environment, not dissimilar to the late 1990s dotcom boom. During that time, quality lagged the market, only to be revitalised when the bubble burst. This seems highly likely to be repeated.
Many of the companies in the ByteTree Quality portfolio have recently reported earnings, continuing to serve customers, compete for market share, innovate, and invest. The overall picture has been positive. The portfolio is made up of large-cap, high-return, low-volatility companies with double-digit sales and free cash flow growth, valued well below the market on a free cash flow or dividend yield basis. These are averages of all the positions, equally weighted (i.e. volatility reflects each stock’s volatility, not the portfolio’s as a whole).
Portfolio Stats
|
Metric |
ByteTree
Quality |
|
Market Cap |
$130bn |
|
ROIC |
14% |
|
Volatility |
23.5% |
|
Revenue growth |
9.5% |
|
Free Cash Flow growth |
10% |
|
Free Cash
Flow/EV yield |
6.8% |
|
Price/Earnings ratio |
16x |
|
Dividend yield |
3.5% |
|
Dividend Per Share growth |
3% |
General - Your capital is at risk when you invest, never risk more than you can afford to lose. Past performance and forecasts are not reliable indicators of future results. Bid/offer spreads, commissions, fees and other charges can reduce returns from investments. There is no guarantee dividends will be paid. Overseas shares - Some recommendations may be denominated in a currency other than sterling. The return from these may increase or decrease as a result of currency fluctuations. Any dividends will be taxed at source in the country of issue.
Funds - Fund performance relies on the performance of the underlying investments, and there is counterparty default risk which could result in a loss not represented by the underlying investment. Exchange Traded Funds (ETFs) with derivative exposure (leveraged or inverted ETFs) are highly speculative and are not suitable for risk-averse investors.
Bonds - Investing in bonds carries interest rate risk. A bondholder has committed to receiving a fixed rate of return for a fixed period. If the market interest rate rises from the date of the bond's purchase, the bond's price will fall. There is also the risk that the bond issuer could default on their obligations to pay interest as scheduled, or to repay capital at the maturity of the bond.
Taxation - Profits from investments, and any profits from converting cryptocurrency back into fiat currency is subject to capital gains tax. Tax treatment depends on individual circumstances and may be subject to change.
Investment Director: Charlie Morris. Editors or contributors may have an interest in recommendations. Information and opinions expressed do not necessarily reflect the views of other editors/contributors of ByteTree Group Ltd. ByteTree Asset Management (FRN 933150) is an Appointed Representative of Strata Global Ltd (FRN 563834), which is regulated by the Financial Conduct Authority.
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