In this episode, we discuss Mawer’s EAFE large cap portfolio with Ian Turnbull, an equity analyst at Mawer. Ian explores the portfolio's diversification benefits, offering exposure to resilient, high-quality companies in 21 markets such as the Nordics, Switzerland, and Singapore. The team targets proven companies with strong moats and global leadership. Key holdings include Wolters Kluwer, BAE, and Chugai. AI's potential in healthcare R&D is highlighted, though regulatory hurdles persist. The team emphasizes balancing risks, leveraging themes like pharma innovation, defense, electrification, and AI, and addressing geopolitical uncertainties for a resilient, long-term portfolio.

Key Takeaways:

• The EAFE Large Cap portfolio provides diversification, mitigating risks like U.S. concentration and valuation fragility. It offers compelling opportunities in smaller, well-performing countries like the Nordics, Switzerland, and Singapore. The team’s bottom-up approach targets high-quality companies, emphasizing resilience and long-term potential across 21 diverse markets.

• Mawer defines large cap as the top two-thirds of the MSCI EAFE Index ($11B market cap), favoring proven, resilient companies with established moats, economies of scale, and global leadership, tested through cycles and challenges.

• Highlighting a few key holdings, Wolters Kluwer’s successful shift from print to digital boosted recurring revenue, customer stickiness, and margin expansion, with AI enhancing value creation and growth.

• Another top holding, BAE, benefits from stable government funding and high capital returns. With new management and growing defense spending, it offers strong growth potential, especially in Europe, amid rising geopolitical tensions.

• Chugai, a top holding in Japan, was once a distributor for Roche but has evolved into a key R&D engine, developing successful treatments like Hemlibra. Its GLP-1 partnership with Eli Lilly offers strong upside potential.

• AI in healthcare R&D promises faster drug discovery, optimizing early-stage processes and reducing costs, benefiting companies with strong R&D cultures while still facing regulatory limits in clinical stages. Valuation in pharma is complex, especially with competition in GLP-1s.

• The EAFE Large Cap team focuses on creating a resilient portfolio by balancing risks, seeking contradictions between holdings, and ensuring exposure to key themes like pharma innovation, defense, electrification, and AI, while monitoring geopolitical risks and tariffs.

Host: Rob Campbell, CFA,

Mawer Institutional Portfolio Manager

Guest: Ian Turnbull, CFA,

Mawer Equity Analyst

For more details and full transcript visit: https://mawer.com/the-art-of-boring/podcast

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit Mawer at https://www.mawer.com.

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In this episode, we discuss the U.S. mid-cap landscape with Jeff Mo, manager of the U.S. mid cap equity strategy at Mawer. Jeff touches on risk management, emphasizing disciplined adherence to investment philosophy and the benefits of balancing risk and return through natural contradictions, like pairing discretionary consumer-focused SharkNinja with countercyclical firms such as FTI Consulting. Additional topics include preemptive risk management, maintaining an all-weather portfolio, and leveraging a robust inventory process to adapt.

Key Takeaways:

• In a hot market, risk management means resisting the temptation to chase speculative trends or high-growth fads without competitive advantages. Instead, it requires disciplined adherence to an investment philosophy—prioritizing quality businesses with strong fundamentals and sustainable value.
• Purposeful diversification includes inherent contradictions, ensuring steady wealth creation across interest rate cycles by balancing companies benefiting from both low- and high-rate environments.
• Despite recent market volatility and election-related uncertainties, the focus remains on maintaining an all-weather strategy. The team continues to evaluate companies based on fundamentals and earnings, with no drastic portfolio adjustments needed during this time.
• Inventory is crucial for risk management, providing a range of high-quality, pre-analyzed options. Mawer’s extensive, multi-stage inventory process ensures quick access to companies with competitive advantages, allowing for strategic, timely decisions based on evolving market conditions.
• To illustrate natural contradiction, Jeff shares details on specific holdings. SharkNinja's competitive edge lies in its rapid product development, allowing market share growth despite its consumer discretionary risks. To balance, the portfolio includes companies like FTI Consulting and CACI, which thrive in different market conditions, providing stability through natural contradictions.

Host: Rob Campbell, CFA
Mawer Institutional Portfolio Manager

Guest: Jeff Mo, CFA
Mawer Portfolio Manager

For more details and full transcript visit: https://mawer.com/the-art-of-boring/podcast

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore.

Visit Mawer at https://www.mawer.com.

Follow us on social:

LinkedIn - https://www.linkedin.com/company/mawer-investment-management/

Instagram - https://www.instagram.com/mawerinvestmentmanagement/

In this episode, we discuss key trends and positioning in credit markets with Brian Carney, lead portfolio manager of the Mawer global credit opportunities strategy. We touch on the year’s strong performance driven by tighter spreads, higher yields, and emerging risks such as low risk premiums and the U.S. election. Topics include corporate issuance, fallen angels, and public-private credit convergence. Emphasizing capital preservation, Brian highlights portfolio positioning in high-quality, short-duration securities, such as North American bank bonds, while avoiding high-yield exposure.

Key Takeaways:

• Credit markets have performed well this year, driven by tighter spreads and higher benchmark yields, but risk premiums are historically low. Brian suggests investors prioritize capital preservation over chasing yield, avoiding high-yield bonds and long-dated credit. Post-U.S. election, vigilance is key amid potential policy-driven market shifts.
• Trends in the past quarter include fallen angels, commercial real estate risks, and potential high-yield defaults.
• An actively managed, absolute return credit strategy offers diversification, income, and potential capital appreciation while protecting against adverse credit and interest rate moves. It’s ideal for long-term investors seeking alternatives to passive strategies and opportunities in volatile or distorted markets.
• Brian recommends investors view absolute return credit as a long-term allocation, not for market timing. Market dislocations are brief, and panic often prevents opportunistic moves.
• Mawer’s portfolio is managed bottom-up, focusing on individual credit assessments to mitigate risk and seize opportunities. It prioritizes short-duration, high-quality holdings, avoids high yield, and ensures diversification with a maximum issuer cap of 10%, balancing downside risk and concentrated positions.
• Optimism abounds for long-term credit opportunities and future discussions on continued progress.

Host: Kevin Minas, CFA, MBA, CAIA

Mawer Institutional Portfolio Manager

Guest: Brian Carney, CIM
Mawer Portfolio Manager, Fixed Income

For more details and full transcript visit: https://mawer.com/the-art-of-boring/podcast

This episode is available for download anywhere you get your podcasts.

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Founded in 1974, Mawer is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore. Visit Mawer at https://www.mawer.com.

Follow us on social:
LinkedIn - / mawer-investment-management
Instagram - / https://www.instagram.com/mawerinvestmentmanagement/