You asked, we answered - Wellington Management is back in the spotlight!

Hi, mooers!

In a recent conversation, we put Wellington in the hotseat and have distilled what we believe are their best of their insights for you!

Wellington's true competitive advantage globally is the depth and breadth of its investment platform. The firm has over 1,000 investment professionals around the world and at the core of that is its proprietary research — its global industry analysts (GIAs). Each GIA is responsible for a specific industry, is a specialist in his/her field and has developed investment frameworks that have proven most relevant to his/her particular philosophy, process and industry.

As of 31 March 2023, Wellington Management had 54 GIAs in total, and the technology sector was covered by 11 GIAs with an average experience of 18 years, analyzing subsectors like semiconductors, software and cloud technology.

Both the Wellington US Quality Growth Fund and Wellington Multi-Asset High Income Fund are available on Moomoo. The investment team for these two funds works closely with the GIA platform, leveraging its deep research in making investment decisions.

In the investment team’s view, consistent alpha generation requires high active share and downside protection, both of which are as important as upmarket capture. Reducing the impact of market declines can have a significant benefit for long-term investment performance.  Selecting high-quality stocks can help reduce downside exposure; in times of market stress, quality companies generally have cleaner balance sheets and will typically continue returning capital to shareholders via dividends or share buybacks, which enhances their appeal.

Moreover, the Wellington US Quality Growth Fund has a flexible stock-ranking approach, where factor weight (valuation, growth, quality and capital return) is adjusted in a disciplined way observing Wellington’s proprietary Global Cycle Index. The Global Cycle Index is Wellington Management's proprietary index, which tracks global economic activities with various macro quantitative inputs. Generally speaking, in positive trend, Wellington’s US Quality Growth Team will allocate more weight on valuation and growth, and less weight on quality and capital return. In negative trend, the team will allocate more weight on quality and capital return, and less weight on valuation and growth.

One unique aspect of Wellington is that it does not have a chief investment officer (CIO). From its global network of investment boutiques to its private ownership model, Wellington is independent by design. By debating new ideas and sharing research across asset classes, regions and investment disciplines, its investors can potentially uncover hidden insights, risks and opportunities. Wellington has built an integrated investment ecosystem combining nearly 50 independent investment teams and 1,000+ investment professionals under a single management framework.

The diversified nature of the strategy is such that the investment team aims to avoid situations where a single sector, stock or risk factor is materially driving the returns and risks of the portfolio. The team has managed to distribute income1 (please refer to dividend records on Moomoo page) since inception (1 Feb 2022) because the Fund’s sources of income generation are diversified to avoid overreliance on a single market or investment style. The team believes investors want consistency of income with some capital growth but don’t want their portfolio managers to take an unnecessary risk of capital loss to get there.

The Fund’s primary emphasis is on bottom-up stock selection, so stock selection is expected to be the source of alpha. There may be short-term headwinds to the approach from time to time, especially in a period during which low-quality stocks outperform, but the investment team remains confident in its alpha generation capability with its robust and disciplined investment process.

Wellington’s sole focus on investment management for its clients allows it to concentrate on its goal of exceeding its investment and service expectations. Its private ownership model (Wellington Management is not publicly listed) also provides stability, allowing it to focus on long-term results, aligns its interests with those of its clients, and helps the firm to recruit and retain outstanding talent.

Applying the Wellington US Quality Growth Fund’s consistent philosophy and process, the investment team’s goal remains to own companies that rank most attractively based on four factors: growth, quality, valuation upside and capital returns to shareholders. Looking ahead, the team finds some themes particularly attractive:

Information technology: accelerated digital transformation and growth of cloud infrastructure are benefiting payments and software services providers, while data analytics companies quicken and improve decision-making processes.

Financials: companies are experiencing increased demand for investment products. Meanwhile, high-quality insurers are positioned to benefit from rising interest rates as asset values rise with inflation.

Health care: health care insurance providers are expected to benefit from ageing populations and unmet needs.

We are so sorry that Moomoo SG has not provided access to any of Wellington's funds that concentrate on long-term investment grade bonds from the developed market as of yet. Please stay tuned!

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See you next time!