We are pleased to announce another important milestone in our club's life. Namely, the partners recently launched a second portfolio that consists of 'quality' stocks only. We defined the differences between our growth and quality stock portfolios as follows:
The growth stock portfolio's aim is to achieve the highest absolute returns in the long-term. The portfolio primarily consists of small and mid-capitalization companies with high growth potential that are also subject to higher volatility.
On the contrary, the quality stock portfolio's aim is to still achieve above market returns, however the return target is lower than the growth stock portfolio's. The portfolio primarily consists of large capitalization companies that have less growth potential, however their dominant market position and in most cases their above-average dividend yield provide more stable returns even under volatile market conditions.
In terms of the companies that the two portfolios invest, please see an infographics here.
This is another big milestone, because if we get to become a hedge fund, we will be able attract a more diverse investor base with different risk profiles.
Hopefully we will indeed get there soon; stay tuned!