IT Asset Management is well known for an active disciplined industry-driven fundamental investment style that results in relatively concentrated portfolios (less than 50 holdings).

INDUSTRY-DRIVEN FUNDAMENTAL STYLE:
Everything starts with the industry. In technology industries, where established situations can change very quickly, we believe that starting from the industry is critical. Only a team with a strong knowledge and operational experience in the industry is able to understand, analyse industry trends and thus select the most promising stocks. IT Asset Management conducts its own analysis, models its own scenarios and builds its own view of the most important trends in the technology industry, independently of what the sell-side or the media says.

ACTIVE FUND MANAGEMENT :
The weight of a stock in the benchmark never influences our decision process: we are active stock-pickers. We believe that a benchmark is a necessary tool to measure fund performance, but should not be used to construct a portfolio. To do otherwise is to end up shadowing the index (and then why not buy a tracker?). As indexes reflect history and past leaderships, active management aims, among other things, at investing in the new leaders.

A CONCENTRATED PORTFOLIO :
Because IT Asset Management makes investment choices based on its own analysis, the number of holdings is relatively limited, fifty at the maximum. We do not believe that 'diluting' ones choices for risk management alone brings any value for the investor.

A DISCIPLINED AND CONSISTENT APPROACH :
Long-term performance requires consistency and discipline. Thus we have built from the ground up our own investment methodology. Consistency, i.e. knowing and being able to explain why the Fund owns any given stock with a given weighting, has been a consistent focus. Being able to explain how performance was derived is equally important. Discipline, i.e. sticking to one's style and always striving to improve it, strongly differentiate our approach.

INFORMATION TECHNOLOGY

GOOD STOCKS IN A GOOD NEIGHBOURHOOD :
What are the themes that will drive the industry over a 3 to 5 year basis? We do not try to be everywhere, but instead to focus on the most promising areas, where we are able to both anticipate industry changes and to understand how other investors perceive these. We then work on selecting the best stocks that will benefit from these themes by looking at criteria such as : managements capability, technology differentiation, business model, financials, sales and marketing abilities. To put it simply, we want to own the best stocks in the best neighbourhoods because they are most likely to outperform.

DYNAMIC MANAGEMENT OF HOLDINGS :
The Information Technology sector is more volatile than the overall equity market, thus we manage holdings on a dynamic basis. When a stock price goes beyond our designated target price, we start taking profit. When a stock drops below, unless something new makes us alter our model or view of the company, we strengthen our position. This has proved very effective in improving the performance/volatility ratio.

VALUATION IS KEY :
We believe everything has a price. This is why we build our own financial models for each company we are interested in, in order to determine a fair value for the stock. The weight of a stock in the portfolio directly depends in the potential price appreciation and the quality of the stock. By quality, we mean 'How much do we trust the company?' in order to avoid going into so-called 'blue chips' where past good performance may hide potential future damage. The higher the quality, the better the price appreciation potential, the larger the weighting.

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BIOTECHNOLOGY

STRONG SECTOR GROWTH :
The IT Fund Biopharma (the Fund) focuses on biotechnology, a high growth and dynamic industry. In less than 30 years biotechnology has grown from a collection of scientific ideas into a global investment sector containing more than 450 publicly trades companies. It is a remarkably innovative and fast moving field that continues to produce some of the highest growth companies worldwide.

A VOLATILE & HIGHLY NEWSFLOW DRIVEN SECTOR :
The capitalisation of a biotech company can vary rapidly & significantly as investors constantly react to a stream of daily newsflow. A significant percentage of biotech newsflow provides information for company events that are binary in nature - i.e. drug X from Company Y was or was not approved for sale by the Federal Drug Agency (FDA). The volatility in the biotech sector results from the difficulty investors derive in valuing a company prior to such important new information - i.e. news that if negative will result in zero future revenues, or if positive can result in peak sales exceeding $1billion. Therefore, the most critical investment issue for our Managers is to be able to identify and make accurate predictions for the outcome of upcoming events in the biotech sector.

A SELECTIVE, DATA-DRIVEN APPROACH :
Given the volatility caused by newsflow in the biotech space we tend to be very selective in choosing stocks and view portfolio construction as a risk reduction exercise. Our goal is to use our understanding of the science and our commercial experience to conduct extensive due diligence on potential investee companies. Portfolio allocation is then based on the amount & quality of the information obtained through our due diligence process. The overall goal of our investment process is to optimise the portfolio's exposure to positive events where the Manager can be more predictive and to avoid investing in companies with drugs that ultimately fail.

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