In focus

The Value of Growth


Good growth investing should focus on businesses able to earn sustainable, superior Returns on Invested Capital (ROIC) with meaningful opportunities to reinvest at comparable rates. Over time, the compounding effects of such entities will most likely more than compensate the investor for any degradation in near term valuation multiples. A business growing its invested capital per share ten-fold could see that capital valued half as richly on exit and still return the investor a handsome five-fold return.


Topics:

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.