As of 10/31/2019
Total Net Assets:$9,480,532,413.31
Inception Date: 01/01/1994
Number of Stocks: 29
Percent of Net Assets in Stocks: 96.34%
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.
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.
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.
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.
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.