Global Equity

McLean Budden may be broadly classified as a large capitalization, core manager with the security selection process being entirely bottom-up driven. We create a portfolio of eighty to one hundred securities as selected by our four-member Global Equity Group.

Decision Making

The four-member Global Equity Group together with twelve portfolio managers/research analysts cover global equity markets with specific research responsibilities divided according to areas of expertise.  Fundamental research includes:

        ·      performing original research

        ·      evaluating external reports

        ·      attending industry functions

        ·      interviewing management

 Our fundamental research assesses a number of factors including an estimate of earnings (or cash flow if applicable) as well as a conviction level concerning the stability of these earnings.  Each week this earnings forecast is combined with an estimated price/earnings multiple and the current price to arrive at price targets and total return expectations for the 250 stocks we monitor.  A full array of industry-specific valuation measures are utilized to arrive at target prices.  The stocks are then ranked according to potential return over the next year.

 The key criteria for our security selection are:

        ·      earnings growth

        ·      management quality

        ·      financial strength

        ·      business potential

        ·      earnings stability

        ·      return on equity

We also utilize a quantitative check in which stocks are run through a regression analysis.  Any significant variations from our forecasts are identified and the assumptions reviewed.  In most instances, our fundamental research is confirmed but the discipline of this quantitative check process is important.

Investment Process

Portfolio Composition

Our commitment to specific securities and industry sectors depends on the earnings potential of the particular companies we follow.  We rank the risk-adjusted returns according to each company's return potential, share liquidity and our assessment of the likelihood of the security attaining the projected return.

The group identifies leading companies with the potential for long-term capital appreciation. Specific issues will normally comprise 1% to 4% of the aggregate portfolio value.  While the process focuses on selecting specific companies, stock selection is also influenced by the desired weightings in the broad market sectors.

Following are our sector risk control parameters:

*              or +/- 10%, whichever is larger

The Economic Sectors are classified according to the following:

 The portfolio uses the following risk control parameters designed to ensure additional diversification:

• no single security will comprise more than 4% of the Fund
• individual security weights will vary by no more than +/- 3% of the weight in the MSCI World Index

• industry sector risk controls are the greater of 50 – 150% of the MSCI World Index weight, or +/- 5%

Regional allocation will normally vary within the following ranges:

 *              or +/- 5%, whichever is larger

The four members of the Global Equity Group have research responsibilities and have the capability and experience to conduct independent research and assess the validity of views offered by outside analysts.  Twelve portfolio managers/research analysts assist them by providing continuous independent research.  Internal research responsibilities are allocated on a global sector basis and focuses on large capitalization multinational companies.  Meetings with management occur on a periodic basis, most often at industry conferences

The decision to buy or sell a security is the result of the bottom-up investment decision-making process.  When buy or sell targets are reached, the portfolio must add or trim its exposure unless the target is in the process of being revised.  Price targets are used primarily for adjusting security positions rather than, in the case of sales, completely eliminating the security. The degree of adjustment will depend on the size of the holding and simultaneous developments in the outlook for other securities being monitored.

Each week, the four-member Global Equity Group together with twelve portfolio manager/research analysts meet formally to review internal research and positions within the portfolio.  When a position moves by more than 0.5% away from the model target weight, a decision to rebalance to the target weight or to change the target weight is immediately triggered.

The quality of the balance sheet is another key factor used to trigger sell decisions

Fees

Segregated Fund Management

HNW Fees

Private Client

Individual Segregated Portfolios
(including combinations of individual securities and pooled funds)
First $2 million		1.00%
Next $8 million		0.50%
Next $15 million		0.35%
Above $25 million		0.25%
Minimum fee $20,000
* Assets invested in mutual funds will not be subject to this schedule.
Pooled Fund Portfolios
First $2 million		1.00%
Next $8 million		0.45%
Next $15 million		0.35%
Above $25 million		0.25%
Minimum fee for one fund $5,000
Minimum fee for multiple funds $10,000
* Assets invested in mutual funds will not be subject to this schedule.  Fees include
custodial services.

© Global Manager Research