TMBD–EQT · Global Equity

Equities Fund

A concentrated, high-conviction global equity portfolio targeting quality compounders — businesses with durable competitive advantages, high returns on invested capital, and pricing power through the cycle.

Strategy Quality Growth
Benchmark MSCI World
Inception Jan 2021
Est. Annual Return +12.6%
Active Share 74%

01 Strategy & Philosophy

📐 Buffett / Munger · Quality Factor · Moat Framework

The Equities Fund is built on the principle that truly exceptional businesses — those with durable economic moats, high returns on invested capital (ROIC), and strong free cash flow generation — compound wealth at rates that systematically exceed market-cap weighted indices over the long run.

This is supported by academic work on the quality factor (Asness, Frazzini & Pedersen, 2019) showing that quality stocks exhibit a significant risk-adjusted return premium. The portfolio holds 25–35 stocks, diversified across sectors and geographies, with an average holding period of 3–5 years. Position sizing uses a modified Kelly criterion bounded by a 12% maximum single-name weight.

02 Stock Selection Criteria

01 ROIC > WACC Only businesses that generate returns on capital consistently above their cost of capital — the fundamental test of value creation.
02 Economic Moat Network effects, switching costs, cost advantages, or intangible assets that protect margins over a 10-year horizon.
03 FCF Conversion Free cash flow conversion >80% of net income. Capital-light models preferred. Low capex intensity.
04 Management Quality Founder-led or owner-operator culture. Capital allocation track record. Skin in the game.

03 Simulated Performance

Cumulative Return vs MSCI World

04 Sector Allocation

Holdings 30

05 Representative Holdings

SecuritySectorROICWeight

06 Macro Positioning & Investment Thesis

Regime as at May 2026

In an inflationary, higher-rate world, the quality of a business matters more than ever — and three attributes the fund screens for become decisive: pricing power, high free-cash-flow conversion, and low dependence on capital markets. The portfolio is built to compound through exactly the environment markets now face.

Pricing Power The only true inflation hedge in equities

When input, energy and wage costs are rising — as they are with CPI at 3.8% and the Hormuz energy shock feeding through — the businesses that protect margins are those that can raise prices without losing customers. Pricing power is the single most valuable attribute in an inflationary regime, and it is precisely what an economic moat confers. The fund's concentration in companies with durable competitive advantages is, in effect, a portfolio of inflation pass-through.

ROIC > WACC Value creation when capital costs more

A higher cost of capital raises the hurdle every business must clear. Companies earning returns on invested capital comfortably above their weighted cost of capital keep creating value even as that hurdle rises; companies that only cleared it when money was free do not. By insisting on a wide ROIC–WACC spread, the fund is structurally tilted toward the businesses that thrive — rather than merely survive — in a higher-rate world.

Cash Generation Self-funding beats refinancing

High free-cash-flow conversion and low leverage mean the holdings fund their own growth and dividends internally, insulated from the rollover risk facing companies that must refinance debt at today's higher rates. This is the quiet advantage in an environment where the Treasury itself is wrestling with short-term funding costs: the fund owns businesses that simply do not need the bond market's permission to keep compounding.