What we don’t own…

AXIAM’s investment strategy is clear. We buy shares in the best companies in the world. We invest in the top 50 consumer brand companies in the world.

But what about what we don’t own?

Our strategy excludes many asset classes and types of shares. Our approach predated the current market downturn by decades, and it is worth reflecting on how not owning certain assets has protected our portfolios.

We don’t own resource companies, financial institutions (unless they are owned through Berkshire Hathaway or as part of our South African clients’ retirement funding portfolios), property, high yield bonds, companies that don’t produce free cash flow and companies that have high debt to equity ratios. We don’t own companies that only flourish during positive economic cycles, for example, travel businesses.

The companies we own have survived during the worst economic environment the world has experienced.

  1. These companies produce products and services that human beings continue to need and desire. Humans need liquids, food, clothing, hygiene, medication, communication, entertainment and work productivity tools daily.
  2. When commodity prices collapse, our companies can manufacture and distribute their products at a lower cost. When many commodity companies are struggling to survive, our companies’ costs decline.
  3. When demand for commercial property collapses, our companies have the power to renegotiate or cancel leases on office, warehouse and retail space. Our companies may need less office space if working from home proves productive.
  4. When the world returns to normal many of the smaller competitors of the companies we own will no longer be there.

Our investment thesis was shaped long before the current crisis and will not change because of the crisis. We continue to analyse the most significant brand owners in the world to ensure that their brands remain relevant and desired by consumers. We stay focused on the very few great companies, and we continue to build concentrated portfolios for our clients. Our focus is to protect the wealth of our clients and empathise with the many that have suffered through this crisis and will continue to suffer.

Scroll to Top