Duck

Duck

Markets Can Be Random,
But Quality Is Recognizable

Mongoose

Invest in quality — and those who can identify it. At William Blair, our definition of “quality” goes further, including sustainable competitive advantages as well as sound fundamentals.

Duck

Duck

Markets Can Be Random,
But Quality Is Recognizable

Mongoose

Invest in quality — and those who can idenitfy it. At William Blair, our definitaion of “quality” goes further, including sustainable competitive advantages as well as sound fundamentals.

Cash flows are more difficult to manipulate than earnings. Therefore, we believe cash flows are a true measure of a company’s ability to generate growth.

Spiro Voulgaris, Partner
Senior Quantitative Analyst, Systematic Equity
Portfolio Manager

From Quality Is Durability

Cash flows are more difficult to manipulate than earnings. Therefore, we believe cash flows are a true measure of a company’s ability to generate growth.

Spiro Voulgaris, Partner
Senior Quantitative Analyst, Systematic Equity
Portfolio Manager

From Quality Is Durability

We look for a lot of things when we start our due diligence on a companya long runway for growth, big competitive moat, and high value proposition to the customer.

Jim Jones, CFA, Partner
Research Analyst, U.S. Growth Equity Team

From Our Analysts Talk Quality

We look for a lot of things when we start our due diligence on a company—a long runway for growth, big competitive moat, and high value proposition to the customer.

Jim Jones, CFA, Partner
Research Analyst, U.S. Growth Equity Team

From Our Analysts Talk Quality

It’s helpful to understand where a company is in its corporate lifecycle because each stage brings with it different risks as well as opportunities.

Ryan Dimas, CFA, CAIA
Portfolio Specialist, Global Equity Team

From Diversifying Across the Corporate Lifecycle

It’s helpful to understand where a company is in its corporate lifecycle because each stage brings with it different risks as well as opportunities.

Ryan Dimas, CFA, CAIA
Portfolio Specialist, Global Equity Team

From Diversifying Across the Corporate Lifecycle

Offensive Quality Drives
Long-Term Growth

WILLIAM BLAIR QUALITY INVESTING VIDEOS

Our portfolio managers and analysts discuss our unique approach to identifying quality companies.

Our focus on durability is important, as it allows our businesses to participate in up markets. But just as important, it provides the ability to protect capital in more difficult environments.

Dan Crowe, CFA, Partner
Portfolio Manager, U.S. Growth Equity Team

Our quality philosophy is unique because it is multipronged. We look at quality from a growth lens, not only being able to protect the core today, but also being able to reinvest, reinvent, and then grow for the long term.

Alaina Anderson, CFA, Partner
Research Analyst, Global Equity Team

Our quality philosophy is unique because it is multipronged. We look at quality from a growth lens, not only being able to protect the core today, but also being able to reinvest, reinvent, and then grow for the long term.

Alaina Anderson, CFA, Partner
Research Analyst, Global Equity Team

Many investors diversify a portfolio based on market cap or where a company is domiciled. As part of our quality analysis, we also focus on where companies are in their corporate cycle to further diversify a portfolio by growth stages.

Ryan Dimas, CFA, CAIA
Portfolio Specialist, Global Equity Team

 

Emergent Growth

Expanding Growth

Sustained Growth

Revenue Growth

Higher

Medium

Lower

Market Penetration

Rapidly growing market share

Expanding market share—and entering new, more promising markets

Dominant market share

Positioning

Single product/service

Differentiators vs. competitors

Market-leading offering

Innovation

Disruptive offering

Innovation integrated into core offering to extend market leadership

Defend market share through integrating innovation into core offering

Financials

High levels of investment as a percentage of revenue

Strong cash flow generation supports high reinvestment levels

Focus on cost control—and returning the resulting excess profit through dividends and buybacks

Lifecycle stages are provided for illustrative purposes only and are not intended as investment advice or as projections of future returns. Characteristics reflect typical traits of each lifecycle, traits of companies within each lifecycle may differ.

WILLIAM BLAIR STRATEGIES

Global Leaders Strategy

Concentrated portfolio of leading high-quality companies across the globe in terms of products, services, and execution.

International Leaders Strategy

Concentrated portfolio of leading high-quality international companies in terms of products, services, and execution.

Emerging Markets
Leaders Strategy

Concentrated portfolio of leading high-quality emerging market companies in terms of products, services, and execution.

Large Cap Growth Strategy

Concentrated portfolio of structurally-advantaged, large-cap quality growth companies that the team believes are more durable than the market expects.

Small-Mid Cap Core Strategy

Portfolio of high-quality small- and mid-cap companies across a broad universe that seeks to provide attractive long-term investment returns with lower levels of risk.

Large Cap Growth Strategy

Concentrated portfolio of structurally-advantaged, large-cap quality growth companies that the team believes are more durable than the market expects.

Small-Mid Cap Core Strategy

Portfolio of high-quality small- and mid-cap companies that seeks to provide attractive long-term investment returns with lower levels of risk.

WILLIAM BLAIR BLOG POSTS

Modeling Quality: Focus on Sustainable Value Creation

Traditional quality metrics, such as earnings quality and financial strength, are not the key drivers of our investment philosophy.

Why ESG Matters in Emerging Markets

The January 2019 collapse of a Brazilian mine tailings dam underscores the critical but underappreciated value of ESG considerations in emerging markets.

Applying AI to
Traditional Industries

In our continuous search for durable growth drivers, we are finding that AI has open-ended potential across many areas.

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Any statements or opinions expressed are those of the author as of the date of publication, are subject to change without notice as economic and market conditions dictate, and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC.

This content is for informational and educational purposes only and not intended as investment advice or a recommendation to buy or sell any security. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions.

Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Forecasts, estimates, and certain information contained herein are based upon proprietary research and should not be interpreted as investment advice, as an offer or solicitation, nor as the purchase or sale of any financial instrument. Statements concerning financial market trends are based on current market conditions, which will fluctuate. William Blair does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax questions and concerns.

Investing involves risks, including the possible loss of principal. Equity securities may decline in value due to both real and perceived general market, economic, and industry conditions. The securities of smaller companies may be more volatile and less liquid than securities of larger companies. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Investing in the bond market is subject to certain risks including market, interest rate, issuer, credit, and inflation risk. Currency transactions are affected by fluctuations in exchange rates; currency exchange rates may fluctuate significantly over short periods of time. Different investment styles may shift in and out of favor depending on market conditions. Diversification does not ensure against loss. Any investment or strategy mentioned herein may not be suitable for every investor. Past performance is not indicative of future results.

The MSCI ACWI IMI Index is a free float-adjusted, market capitalization-weighted index that captures large, mid, and small cap representation across developed and emerging markets. The MSCI ACWI ex-US IMI Index is a free float-adjusted, market capitalization-weighted index that captures large, mid, and small cap representation across developed and emerging markets, excluding the U.S. The Value and Growth Indices are a subset of the Index that adopt a framework for style segmentation in which value and growth securities are characterized using different attributes. Multiple factors are used to identify value and growth characteristics. The MSCI ACWI Small Cap Index is a free float-adjusted, market capitalization-weighted index that captures small cap representation across developed and emerging markets. The MSCI Emerging Markets Index is a free float-adjusted, market capitalization-weighted index that is designed to measure the equity market performance of emerging markets. The MSCI World Index is a free float-adjusted, market capitalization-weighted index that is designed to measure the equity market performance of developed markets. The Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid ARM pass-throughs), asset-backed securities and commercial mortgage backed securities. The Russell 2000 Index is a market capitalization-weighted index designed to represent the small cap segment of the U.S. equity universe. Index performance is for illustrative purposes only. The indices are unmanaged, do not incur fees or expenses, and cannot be invested in directly.

Alpha is a measure of an investment's return in excess of the market's return, after both have been adjusted for risk.

Half-life is a statistical measure of the time required for the discrepancy between price and value to contract by half of its starting value. Fundamental value estimates are based on the Dynamic Allocation Strategies team's proprietary research.

P/E Ratio is a measure of valuation which compares share price to earnings per share, calculated using estimates for the next twelve months.

Standard deviation is a statistical measurement of variations from the average.

QUANTITATIVE MODELS—FACTOR DEFINITIONS

The William Blair Earnings Trend Model captures information about short- and medium-term changes in analyst estimates in an attempt to anticipate future estimate changes and stock performance. The score combines measurements of earnings revisions, momentum, and earnings surprise.

The William Blair Valuation Model combines varying metrics used to characterize the relationship between the stock’s trading price and its intrinsic value. By going beyond using only one or two measures, the model attempts to build a more holistic version of a stock’s worth vis-a-vis the market. The score combines measurements of earnings/cash flow based, asset-based, and model-based factors.