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The Global Team is responsible
for all country, sector and stock decisions. The team presents their country/sector notes
as well as views on market valuations at monthly meetings. They evaluate long-term factors
such as forecast country/sector profit growth and structural domestic demand for equities,
and medium-term variables that include likely changes in short rates and fiscal policy.
These can include liquidity conditions, excess money growth, exchange rate implications,
upside and downside profit surprises, valuations relative to potential and the effect of
technical (supply/demand) factors. Country ratings and sector allocations are determined
at this meeting.
Individual stocks are researched on a fundamental basis to identify those that meet the
country and sector objectives. New Star conducts research using a combination of company
visits, broker research, analyst meetings and financial databases. Stock candidates are
further analyzed using Economic Value Added (EVA) methodology to understand the factors
driving company profitability, highlight companies that should be avoided and make
cross-border comparisons. Managers prepare recommendation notes that define the stock's
role in the country/sector strategy and its growth potential relative to its peer group.
Portfolio managers are responsible for stock selection within their region of expertise
based on a combination of country, sector and stock-specific considerations.
New Star actively manages currency to reduce risk and add value if a client's mandate
allows. The Currency Team researches and establishes the firm's views on currency and
effectively provides an internal currency overlay service.
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