John Maxwell, portfolio manager of the Ivy International Core Equity Fund, gets the best out of global stock markets through a combined top-down and bottom-up investment strategy that focuses first on positive, long-term macroeconomic trends, and then matches up attractively valued stocks from across the world that Maxwell believes have the potential to flourish as a result of those macro dynamics.
His current themes are: The rise of the emerging markets consumer; solid and durable dividend yields; and M&A activity and infrastructure, a key requirement for emerging market nations and which, in developed markets, needs serious revamping.
Maxwell uses a combination of country analysis and industry dynamics to look for companies with a good, competitive position and strong prospects for free cash flow that fit under the umbrella of those themes.
“These main themes, except for M&A, which can only be played in a cycle, are long lasting,” Maxwell said.
The emerging markets consumer theme, for instance, has a long way to go, “moving from manufacturing to the Internet and then to luxury goods and beyond,” Maxwell said, and historically, dividends have made up more than half of total market returns, “so with rates as low are they are, we believe that dividends continue to be important.”