Clas Olsson

Earnings, quality and valuation are at the core of this manager's discipline.

Diana Cawfield 11 February, 2011 | 7:00PM
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Clas Olsson credits a three-step discipline for the award-winning performance of Invesco International Growth Class, which won in its category at the Canadian Investment Awards gala in December.

"We consider ourselves to be quality-growth managers," says Olsson, "who use an investment process that we refer to as EQV: earnings, quality and valuation. We've always had a focus on strong balance sheets, so these are companies that don't risk going out of business."

The first step in the investment process is seeking companies with good earnings power throughout the business cycle, with potential for earnings growth. In the second step, the focus is on the quality of the company, based in part on the cash flow the business generates and how management reinvests that cash. The Invesco team's third step entails making sure they don't overpay for growth and that the risk-reward ratios are attractive.

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About Author

Diana Cawfield

Diana Cawfield  Diana Cawfield is an award-winning writer who has been a regular Morningstar contributor since 2000. Her numerous publication credits include the Toronto StarAdvisor's Edge and Chatelaine, as well as the Canadian Securities Institute's online educational services.

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