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QV

Jensen Quality Value Fund

Process

We evaluate opportunities for the Jensen Quality Value Fund using fundamental research and various valuation tools. The Quality Value Fund’s targeted end result is approximately 50-80 companies that have persistently high business returns and are undervalued relative to their business performance.

Investment Process

Step 1

The Jensen Quality Universe™ + Market Cap

Our selection process pares down 4,000 publicly-traded U.S. companies, creating a focused universe of approximately 175 to perform further screening.

  • ROE greater than 15% for each of the last ten years as determined by the Investment Team
  • Market capitalization above $100 million
  • Primarily companies with market capitalizations less than the largest capitalization company included in the Russell Midcap® Index at the time of the Fund’s investment, although, to a limited extent, may include companies with higher market capitalizations
Step 2

Quality + Value Screen

Identification of each company’s value relative to its business performance.

  • Fundamental research and valuation tools are applied to the universe
  • Companies with strong fundamental businesses and attractive valuation are identified and monitored
Step 3

Portfolio Construction

A portfolio of approximately 50-80 companies which we believe are undervalued relative to their business performance.

  • Emphasizes approximately one-third of the universe based on our own internal  research and valuation
  • Position sizes vary based on analysis of potential return and risk characteristics

Sell Discipline

A company will be sold from the Jensen Quality Value Fund if:

  • It no longer meets one or more of the criteria of the investment process
  • Its fundamentals deteriorate, lowering ROE below 15% on an annual basis, indicating a possible loss of competitive advantage
  • The Investment Team determines that another qualifying company has a better opportunity to achieve the Fund’s objective