Sustainable Growth Advisers

Risk Management

Our approach is structured to control three absolute risk factors:

Reducing business risk by investing selectively in companies with low volatility of operating results.
Reducing human risk by having a team approach to research and portfolio management.
Reducing price risk by being disciplined with valuation and position sizing.

We implement additional measures at the portfolio level:

Limit individual company exposure to 8% (in most portfolios).
Limit industry exposure to 25% of the portfolio.
Limit sector exposure to 40% of the portfolio.
Never own a neutral conviction company for diversification or active risk objectives.
Review the portfolio for diversification of alpha drivers and exposure to macroeconomic factors.