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Investment Process

Pella's investment process is composed of 12 inputs, which are divided into four stages: Incubation, Discovery, Exposure, Audit ('IDEA')
INCUBATION

Filter investment universe to 1,800 stocks 

Filter

Identify and follow specific stocks 

Source

Analyst prepares  introductory report on targets

Introductory Report

Outlines companies key drivers

Additional exploration of the company 

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CIO makes ultimate investment decision

DISCOVERY

Initial Report

Extended Report

Decision

AUDIT

Portfolio Adjustment

Portfolio Monitoring

Stock Monitoring

React if the outcomes of monitoring call for action

Ensure portfolio is balanced and compliant

Track performance of company versus thesis

EXPOSURE

Implement

Limits

Segments

Consider impact on whole portfolio

Ensure portfolio complies with exposure limits

Stock's placement is partly driven by its segment

Segmentation Strategy

Pella's Segmentation Strategy is a critical part of its process and involves dividing all companies in the portfolio in three segments (Core, Cyclical, and Innovation) to facilitate broad exposures in a risk-controlled manner

Weight
Return profile
Medium-Term Growth
Core
60-80%
Stable
5-15%
Cyclical
0-30%
Cyclical
>15%
Innovation
0-20%
Variable
>15%

Core

Cyclical

Innovation

Portfolio Weight

60-80%

0-30%

0-20%

Return Profile

Stable

Cyclical

Variable

Medium-Term

Growth p.a.

5-15%

>15%

>15%

The "Core" of the Fund represents over 60% of the portfolio and targets companies offering stability and growth, forming the bedrock of the portfolio

"Cyclical" companies represent a maximum of 30% of the Fund. These companies benefit from powerful shorter term cycles, allowing the portfolio to respond to changing economic dynamics

"Innovation" offers exposure to innovative, fast growing, and distruptive businesses in a risk controlled way with a maximum of 20% of the fund allocated to this segment