The first stage in the decision process is country allocation. We make five year earnings projections for the equity markets in our universe. This framework allows us to determine the relative value across markets and from this we derive our country allocation strategy.
The Investment Strategy Committee, of which the senior investment professionals are members, makes the country allocation decisions. Detailed strategy papers, based on the committee members' ongoing analysis are presented for discussion at regular meetings.
Pyrford's process is a mixture of country allocation and stock selection, with a recognition that a greater proportion of long term performance and risk reduction will come from the country allocation decision.
Pyrford measures relative value in equity markets in the following way:
Current Dividend Yield + Forecast Long Term Earnings per Share Growth (expressed in real terms).
The process involves integrating many sources of information with emphasis on our in-house research expertise.
We do not invest in any country which does not satisfy our minimum requirements in relation to accounting standards, investor protection and political stability.