{"id":305453,"date":"2014-12-19T17:00:00","date_gmt":"2014-12-19T22:00:00","guid":{"rendered":"https:\/\/www.investmentexecutive.com\/uncategorized\/manager-monitor-tye-bousada-edgepoint-wealth-management-inc\/"},"modified":"2014-12-19T17:00:00","modified_gmt":"2014-12-19T22:00:00","slug":"manager-monitor-tye-bousada-edgepoint-wealth-management-inc","status":"publish","type":"post","link":"https:\/\/www.investmentexecutive.com\/news\/products\/manager-monitor-tye-bousada-edgepoint-wealth-management-inc\/","title":{"rendered":"Manager Monitor: Tye Bousada- EdgePoint Wealth Management Inc."},"content":{"rendered":"
Tye Bousada, co-manager of the $2.9-billionEdgePoint Global Portfolio<\/a>, is unconstrained in seeking the best investment opportunities.<\/p>\n “Over 57% of the businesses that we own in our portfolio aren’t even in the MSCI World Index,” says Bousada. “That speaks to being able to go out there and come up with those unique insights, looking different from the crowd.”<\/p>\n Bousada, a portfolio manager and co-founder of Toronto-based EdgePoint Wealth Management Inc., has co-managed the fund, with portfolio manager and co-founder Geoff MacDonald, since 2008. The duo is also responsible forEdgePoint Canadian Portfolio<\/a>,EdgePoint Canadian Growth & Income<\/a> andEdgePoint Global Growth & Income<\/a>.<\/p>\n They jointly accepted the award for Morningstar Foreign Equity Fund Manager of the Year at theMorningstar Awards gala in November. Bousada credits the five-member investment team, including himself, for the recognition. “It’s definitely not just the Geoff and Tye show.”<\/p>\n Bousada has a hard time “pegging our style into value or growth” in the team’s bottom-up investment discipline. Using quantitative and qualitative analysis, the focus is on identifying a business that is going to be bigger in the future, without paying for that growth today. The team considers strong balance sheets and strong free cash flow to be essential.<\/p>\n With no constraints across sectors or geography, says Bousada, the team spends an “enormous amount of time” focusing on diversifying by different ideas whose performance will be non-correlated with each other.<\/p>\n “Most people define risk as volatility,” says Bousada, “but the real risk we face is if our proprietary insights are wrong. We’ve made mistakes, but when we make mistakes, they’re isolated to that one business idea.”<\/p>\n EdgePoint portfolios tend to be concentrated in about 30 names. An individual stock usually does not exceed a 6% weight in the portfolio.<\/p>\n The stock-specific strategy has resulted in a current weighting of about 72% in the U.S. “You can’t just look at our geographic allocation,” says Bousada, “and assume that the head office in the U.S. reflects the business.”<\/p>\n For example, one of the fund’s largest holdings is Wabco Holdings Inc. (NYSE:WBC<\/a>), a provider of electronic and mechanical products for commercial trucks and car manufacturers. “Wabco is classified as a U.S. business,” says Bousada, “but over 50% of their revenue is generated from outside the United States.”<\/p>\n In an economic climate where safety regulation is increasing, “Wabco’s in the sweet spot,” of being able to offer the technology in a growing market and benefit from the greater importance placed on safety, Bousada adds. “So there’s this tailwind; they’re going to be in a position to grow their business irrespective of what happens to the economy over the long run.”<\/p>\n