The EdgePoint way to invest
We're long-term investors in businesses. We view a stock as an ownership interest in a company and endeavour to acquire these ownership stakes at prices below our assessment of their true worth.
We believe that the best way to buy a business at an attractive price is to have an idea about the business that isn't widely shared by others – what we refer to as a proprietary insight.
We strive to develop proprietary insights around businesses we understand. We focus on companies with strong competitive positions, defendable barriers to entry and long-term growth prospects that are run by competent management teams. These holdings generally reflect our views looking out more than five years. We firmly believe that focusing on longer periods enables us to develop proprietary views that aren't reflected in the current stock price.
Our approach is deceptively simple. We buy good, undervalued businesses and hold them until the market fully recognizes their potential. Following this approach requires an ability to think independently, a natural curiosity necessary to search out new ideas and a commitment to embrace the thorough research required to uncover opportunities the market doesn’t fully appreciate.
Fixed-income investing at EdgePoint
We approach fixed-income investing in the same way we do equity investing. We’re long-term investors who seek to acquire ownership stakes in quality businesses at prices below our assessment of their true worth. On the fixed-income side, we look for securities that provide us with an attractive return through coupon payments and/or capital appreciation while focusing on the borrower’s (or bond issuer’s) ability to meet its debt obligations, or the payment of periodic coupons and the return of the original principal at maturity.
Fixed-income managers tend to manage to the index and don’t deviate materially from duration, sector or credit ratings. At EdgePoint, we have the ability to look different and have shown that we aren’t afraid to look different. While we’re aware of the index, we don’t let it influence our investment approach.