Focused Portfolios

Rule #2 - Invest with Conviction

Focused investing improves returns and lower risk

From experience, Sigma’s investment team firmly believes that a Focused Portfolio of undervalued businesses increases the probability of achieving the return objective. Including a business in a portfolio should be driven by high conviction in the underlying investment idea. Diversification for the sake of reducing short-term portfolio volatility relative to an index can actually dilute long term returns. As stock pickers we are focused on allocating capital to our best ideas while ensuring adequate diversification and risk-controls are adhered too.

As a famous investor once said:

“Wide diversification is only required when investors do not understand what they are doing.” – Warren Buffett

Through a Focused Approach we have achieved far better outcomes for our clients and ourselves over time.  While our results may deviate from benchmarks in the short run, over time fundamentals prevail, with returns compensating for patient investors.
Sigma's Investment Philosophy, Approach and Process document provides a detailed explanation of our approach to Focused Investing.
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