FA Whitepapers


June 2016  

ROE: A Compelling Case For Investors

At Jensen Investment Management, we believe that Return on Equity (ROE) is a very useful criterion for identifying companies that have the potential to provide attractive returns over long periods of time. Our experience and research suggest that our requirement of consistently high Return on Equity results in a universe of high-quality, profitable companies that are able to generate returns above their costs of capital in a variety of circumstances and economic environments. Further, we believe that this universe produces companies with sustainable competitive advantages, strong growth potential and stocks with a lower beta relative to broad market indices. This paper serves to illustrate the reasons why we use Return on Equity the way we do, and why we use it for the first step of our fundamental investment process.

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For more complete information about the Jensen Quality Growth Fund including investment objectives, risks, fees and expenses, please call 800.992.4144. Read the prospectus carefully before you invest or send money.
Mutual fund investing involves risk. Principal loss is possible. The Jensen Quality Growth Fund  is non-diversified, meaning that it may concentrate its assets in fewer individual holdings than a diversified fund, and is therefore more exposed to individual stock volatility than a diversified fund.
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