Jensen Separately Managed Accounts



Jensen Quality Growth Strategy

Frequently Asked Questions

Why does Jensen believe in high ROE?

Our experience suggests that our requirement of consistently high Return on Equity (ROE) results in a universe of high-quality, profitable companies that are able to generate returns above their costs of capital in a variety of circumstances and economic environments. Further, we believe that our Jensen Quality Universe produces companies with sustainable competitive advantages, strong growth potential and stocks with a low beta relative to broad market indices.

How does Jensen define a quality business?

It is Jensen’s belief that great businesses consistently add value every day, but that the market does not reflect that value creation in a straight, incremental line each day. By first seeking those companies that are great businesses and then patiently waiting for the opportunity to buy them as attractive stocks, Jensen can take advantage of short-term volatility and inefficiencies in the market through active management.

What benefits come from owning quality companies for the long-term?

In our opinion, the current low growth environment cannot sustain high market returns and long-term investors should be rewarded by investing in high quality growth businesses, such as those included in the Jensen Quality Growth Strategy. These businesses continue to post relatively consistent growth in revenue, earnings, and free cash flow in spite of what feels like a perpetually uncertain global economic landscape. We believe long-term investors in these businesses have the potential to be rewarded when the consistency of these companies’ performance is reflected in their share prices. Our approach, including our insistence that a stock trade at a discount to our estimate of full value, allows us to properly balance the portfolio’s potential upside opportunities while seeking downside protection over the long-term.

How does retaining independence help us serve our clients?

The independence of our firm serves as another competitive advantage, and provides the framework to patiently execute our investment discipline without conflicting mandates such as growth goals or margin targets which may occur in firms with more of a short term focus.

Can Jensen provide protection on the downside?

With a long-term time horizon, we believe the consistency of performance of the businesses included in the Jensen Quality Growth Strategy allows us to predict with a reasonable degree of confidence the levels of future growth in free cash flows and earnings, which in turn drives our estimation of the full values of the businesses. We believe these factors will allow our Quality Growth Strategy to deliver shareholder value and downside protection to our clients over a complete market cycle.

How does Jensen view Institutional Client Service?

  • Depth of Team
    Our Client Service and Marketing professionals work together as a team with a focus on providing all clients with an exceptional level of service.
  • Access to the Investment Team
    Both our Client Service and Investment Teams are available to respond to client questions. These teams are dedicated in keeping you fully informed of developments and will address any questions you may have regarding our strategy.
  • Communication
    As it is important to keep our clients and their consultants up to date on our strategy, we offer quarterly performance, holdings, factsheets and commentary for the Jensen Quality Growth Equity Composite via our website. We also offer a quarterly conference call and periodically publish white papers on topics we believe are important to our clients.