June 18, 2019 | U.S. Growth and Core Equity

Quality Is Durability

Speakers

Dan Crowe, CFA, Partner

Portfolio Manager

Spiro Voulgaris, Partner

Senior Quantitative Analyst

Featured Funds

WSMDX

Small-Mid Cap Growth Fund
View Fund

WBCIX

Small-Mid Cap Core Fund
View Fund

Featured Funds

LU0995404943

U.S. Small-Mid Cap Growth Fund
View Fund

LU1890055632

U.S. Small-Mid Cap Core Fund
View Fund

Featured Strategies

Small-Mid Cap Growth
View Strategy
Small-Mid Cap Core
View Strategy
Our high-quality investment approach focuses on durability—a company’s ability to sustain its business model and generate enduring growth.

So traditional quality metrics that investors look at would be balancing strength, stability of the business, often backwards-looking aspects of the business, as opposed to the ability for the business to sustainably grow going forward. 

Our focus for our clients is on long-term investment returns. And therefore, the durability of the business franchise, the durability of their growth, and the durability of their corporate performance is important to us. 

We need a management team with a long-term record of success, a management team who we view as aligned with us as shareholders, who shares the same principles that we do in terms of long-term value creation. 

From there, we look at the qualitative aspects within the business. Are there sustainable advantages that the company can maintain over time? We focus on a company’s ability to price a product to the value it creates for its customer as opposed to the competition. 

The key attributes that we look for in assessing whether the company has the solid financial attributes are a strong balance sheet, recurring revenue, above-average margins, and very importantly, high returns on investment capital. 

Return on invested capital is a measurement of a company’s ability to deploy their capital profitably over time. 

In a nutshell, we’re looking for stocks that can generate cash flows and reinvest those cash flows at a rate greater than the cost of capital to achieve stable and enduring growth through time. 

Cash flows are more difficult to manipulate than earnings. Therefore, cash flows, we feel, are the true measure of a company’s ability to generate growth and to generate what we call sustainable value creation. 

We believe William Blair’s focus on durability is important as it allows our businesses to participate in up markets, but just as importantly, during more difficult environments, the ability to protect capital.

Filmed April 2019 

The views and opinions expressed herein are those of the speakers as of the date of publication, are subject to change without notice as economic and market conditions dictate, and may not reflect the views and opinions of other investment teams within William Blair. Factual information has been obtained from sources we believe to be reliable, but its accuracy, completeness, or interpretation cannot be guaranteed. This material may include estimates, outlooks, projections, and other forward-looking statements. Due to a variety of factors, actual events may differ significantly from those presented. This video has been provided for informational purposes only and should not be considered as investment advice or a recommendation of any particular strategy or investment product, or as an offer to buy or sell any securities or related financial instruments in any jurisdiction. Investment advice and recommendations can be provided only after careful consideration of an investor’s objectives, guidelines, and restrictions. Investing involves risks, including the possible loss of principal. Equity securities may decline in value due to both real and perceived general market, economic, and industry conditions. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. Individual securities may not perform as expected or a strategy used may fail to produce its intended result. Different investment styles may shift in and out of favor depending on market conditions. Any investment or strategy mentioned herein may not be suitable for every investor. Past performance is not indicative of future results.

Copyright © 2019 William Blair. “William Blair” refers to William Blair Investment Management, LLC. William Blair is a registered trademark of William Blair & Company, L.L.C.

Subscribe Now

Want the latest insights on the economy and other forces shaping the investment landscape?

Subscribe to our Investing Insights newsletter. 

Moderated by Hugo Scott-Gall, Partner

Want More Insights?

The Active Share podcast explores less obvious insights in a world that’s always changing.

Listen Now

Contact Us

Our active ownership culture creates long-term client relationships by aligning with your interests and helping you achieve successful investment outcomes. Contact us to learn how we can partner with you.

Contact Us

Contact Us

Our active ownership culture creates long-term client relationships by aligning with your interests and helping you achieve successful investment outcomes. Contact us to learn how we can partner with you.
Contact Us

Contact Us

Our active ownership culture creates long-term client relationships by aligning with your interests and helping you achieve successful investment outcomes. Contact us to learn how we can partner with you.
Contact Us

Any investment or strategy mentioned herein may not be appropriate for every investor. There can be no assurance that investment objectives will be met. Products and services listed are available only to residents of this jurisdiction and may only be available to certain categories of investors. The information on this website does not constitute an offer for products or services, or a solicitation of an offer to any persons outside of this jurisdiction who are prohibited from receiving such information under applicable laws and regulations. Nothing on this webpage should be construed as advice and is therefore not a recommendation to buy or sell shares.

Please carefully consider the William Blair Funds’ investment objectives, risks, charges, and expenses before investing. This and other information is contained in the Funds’ prospectus and summary prospectus, which you may obtain by calling 1-800-742-7272. Read the prospectus and summary prospectus carefully before investing. Investing includes the risk of loss.

The William Blair Funds are distributed by William Blair & Company, L.L.C., member FINRA/SIPC.

The William Blair SICAV is a Luxembourg investment company with variable capital registered with the Commission de Surveillance du Secteur Financier (“CSSF”) which qualifies as an undertaking for collective investment in transferable securities (“UCITS”). The Management Company of the SICAV has appointed William Blair Investment Management, LLC as the investment manager for the fund.

Please carefully consider the investment objectives, risks, charges, and expenses of the William Blair SICAV. This and other important information is contained in the prospectus and Key Investor Information Document (KIID). Read these documents carefully before investing. The information contained on this website is not a substitute for those documents or for professional external advice.

Information and opinions expressed are those of the authors and may not reflect the opinions of other investment teams within William Blair Investment Management, LLC, or affiliates. Factual information has been taken from sources we believe to be reliable, but its accuracy, completeness or interpretation cannot be guaranteed. Information is current as of the date appearing in this material only and subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. This material may include estimates, outlooks, projections, and other forward-looking statements. Due to a variety of factors, actual events may differ significantly from those presented.

Investing involves risks, including the possible loss of principal. Equity securities may decline in value due to both real and perceived general market, economic, and industry conditions. The securities of smaller companies may be more volatile and less liquid than securities of larger companies. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks. These risks may be enhanced in emerging markets and frontier markets. Investing in the bond market is subject to certain risks including market, interest rate, issuer, credit, and inflation risk. High-yield, lower-rated, securities involve greater risk than higher-rated securities. Different investment styles may shift in and out of favor depending on market conditions. Diversification does not ensure against loss.

Past performance is not indicative of future returns. References to specific companies are for illustrative purposes only and should not be construed as investment advice or a recommendation to buy or sell any security.

William Blair Investment Management, LLC is an investment adviser registered with the U.S. Securities and Exchange Commission.

Issued in the United Kingdom by William Blair International, Ltd., authorized and regulated by the Financial Conduct Authority (FCA), and is only directed at and is only made available to persons falling within articles 19, 38, 47, and 49 of the Financial Services and Markets Act of 2000 (Financial Promotion) Order 2005 (all such persons being referred to as "relevant persons").

Issued in the European Economic Area (EEA) by William Blair B.V., authorized and supervised by the Dutch Authority for the Financial Markets (AFM) under license number 14006134 and also supervised by the Dutch Central Bank (DNB), registered at the Dutch Chamber of Commerce under number 82375682 and has its statutory seat in Amsterdam, the Netherlands. This material is only intended for eligible counterparties and professional clients.

Issued in Switzerland by William Blair Investment Services (Zurich) GmbH, Talstrasse 65, 8001 Zurich, Switzerland ("WBIS"). WBIS is engaged in the offering of collective investment schemes and renders further, non-regulated services in the financial sector. WBIS is affiliated with FINOS Finanzomubdsstelle Schweiz, a recognized ombudsman office where clients may initiate mediation proceedings pursuant to articles 74 et seq. of the Swiss Financial Services Act ("FinSA"). The client advisers of WBIS are registered with regservices.ch by BX Swiss AG, a client adviser registration body authorized by the Swiss Financial Market Supervisory Authority ("FINMA"). WBIS is not supervised by FINMA or any other supervisory authority or self-regulatory organization. This material is only intended for institutional and professional clients pursuant to article 4(3) to (5) FinSA.

Issued in Australia by William Blair Investment Management, LLC (“William Blair”), which is exempt from the requirement to hold an Australian financial services license under Australia's Corporations Act 2001 (Cth). William Blair is registered as an investment advisor with the U.S. Securities and Exchange Commission (“SEC”) and regulated by the SEC under the U.S. Investment Advisers Act of 1940, which differs from Australian laws. This material is intended only for wholesale clients.

Issued in Singapore by William Blair International (Singapore) Pte. Ltd. (Registration Number 201943312R), which is regulated by the Monetary Authority of Singapore under a Capital Markets Services License to conduct fund management activities. This material is intended only for institutional investors and may not be distributed to retail investors.

Issued in Canada by William Blair Investment Management, LLC, which relies on the international adviser exemption, pursuant to section 8.26 of National Instrument 31-103 in Canada.