How quality leads to growth when you find the right niche

One of the pillars of Elston Asset Management’s Emerging Leaders Fund is “above-average quality leads to above-average growth”, which for portfolio manager Justin Woerner means a higher focus on value factors – like profitability, returns and gearing - to support Elston's Emerging Leaders strategy.

‘If you look at a lot of the research houses, they would bucket us in the ‘growth’ manager … but it’s the quality metrics and characteristics of these companies which leads to the superior growth in the portfolio.’
With a concentrated portfolio of around 20 businesses, that lean toward quality can also help to provide added portfolio diversification and protect against risk, especially when it comes to selecting small-cap stocks.

In this wire, Woerner highlights how quality leads to growth and provides an example of a standout addition to the portfolio that's right under the nose of breakfasting Australians everywhere.

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