The company’s founder and head portfolio manager is David McEwen, one of New Zealand's foremost investment managers and commentators.

He has over 25 years’ experience in the financial services industry, predominantly in financial writing, securities analysis and portfolio management. His career started as a business writer and has included positions with the Financial Times newspaper in London, Reuters News Service in Africa and The National Business Review in New Zealand, where he served as Business Editor for several years.

In 1996 David qualified as a Securities Analyst and left to establish his own business in 1997, specialising in Australasian equities research and advice. This business evolved to become Investment Research Group Ltd, which he sold in 2007.

As Chief Investment Officer with IRG and simultaneously a consultant with KiwiSaver funds manager firm Huljich Wealth Management, he contributed to the administration of over $1 billion in investment funds under advice or management.

In 2010 he established his own business to offer investment advice through his McEwen Investment Report weekly newsletter and private client portfolio management services through McEwen Wealth Management.

MWM’s unusual route to securities analysis and portfolio management means we take a different approach from most others in the industry. We view this as a substantial advantage and a major contributor to outstanding results in the past.

In essence, we reject many of the factors used by other analysts to determine a share’s worth. Estimations of future cash flows, interest rates, exchange rates, sales and so on are impossible to predict with any accuracy.

Instead, we have developed a quantitative valuation model based on nine key criteria that can be easily measured and indicate the quality of a company – with the primary emphasis being on finding companies whose survival and performance can be relied upon even during adverse economic or market conditions.

Once such companies are identified, the model then extrapolates long-term trends to indicate whether a purchase of shares in each company at current market prices, is likely to result in an attractive return on investment.

Investments are made on an unleveraged, unhedged basis with a view to holding for a minimum of three years, (with continual monitoring in case circumstances change) in order to achieve attractive compounding returns.

1. Market Dominance

Research indicates that companies that rank first or second in their sector by revenue are traditionally the most profitable and the model favours such companies.

2. Balance sheet strength

Industrial companies must have shareholders' funds that are equal to 50% of total assets, ensuring they have the resources to meet obligations in the event of market or economic downturn. The threshold for finance companies is 8% and for utilities or other companies with high levels of operating cash flows it is 30%.

3. Positive operating cash flows

Rather than focus on reported profits, which often contain non-cash items, the model looks for companies with strong cash surpluses from sales after all input costs have been paid. A company needs to demonstrate positive operating cash flows in at least four out of every five years to qualify.

4. Strong cash flows relative to dividend payment

Cash surpluses need to be 50% greater than total dividend payments during a 12 month period to create a 'margin of safety' that should allow dividends to continue to be paid even in the event of a downturn in performance.

5. Rising trend of earnings growth

An indicator of management strength in a company is its ability to consistently deliver earnings growth despite variable conditions. A company that achieves such growth in three out of every four years has a higher probability of continuing this trend.

6. Low debt levels

Companies with minimal long-term debt have a superior ability to survive and prosper during adverse operating conditions. Our debt indicator requires companies to be able to pay off all long-term debt from net operating profit within two years.

7. High levels of retained earnings

If a company retains earnings, and is able to reinvest those earnings to get an attractive rate of return then its future earnings, and share price, will appreciate. This will deliver tax-free capital gains to investors over time. Therefore, the model looks for growth companies that pay out less than 50% of net profits as dividends. The reverse applies for yield companies, where a higher percentage of payout is acceptable.

8. Inflation-proof pricing

Companies with market dominance and excellent products and services are able to lift their prices to match or exceed inflation. The model looks for companies with gross operating margins that rise at a rate greater than inflation in two out of every three years.

9. Superior return on equity

Investment success requires achieving a high level of return on capital invested. Therefore, the model favours companies that have produced an average return on shareholders' funds over 5 - 10 years of 15% or greater.

David McEwen has an outstanding record of managing client portfolios that have outperformed the share market over more than a decade. While past results are not an indication of future returns, we continue to target a gross annual return for clients of 18% per annum over time.

Results to date are:

Year	McEwen clients*	Benchmark Index+	Net value added
2000	24.26%	-0.89%	25.15%
2001	14.88%	4.06%	10.82%
2002	6.39%	5.40%	0.99%
2003	16.77%	10.28%	6.49%
2004	30.23%	27.18%	3.05%
2005	22.57%	19.25%	3.32%
2006	23.17%	20.85%	2.32%
2007	20.33%	17.01%	3.32%
2008	-8.70%	-18.31%	9.61%
2009	-5.72%	-15.44%	9.72%
2010	7.91%	2.13%	5.78%
Annual return (compound)	13.16%	5.58%	7.58%
	* After brokerage fees/before management fees
	+ Currently the NZSX50 Portfolio Index

Our recommendations are based on our in-house research which identifies high quality shares in their own right and therefore we do not require any information about a person's personal situation. All information provided by McEwen Wealth Management Ltd is deemed to be Class Advice under the terms of the Financial Advisers Act 2008. It is not personalised for anyone's financial situation or goals. If you require such advice, you should contact an Authorised Financial Adviser.

Once you have approved the proposed portfolio, two accounts are established.

One is a Trading Account in your name with broking firm ASB Securities Ltd or Direct Broking Ltd. This is used for trading shares. The other is a Cash Management Account to which only you and the broker have access. For security reasons, at no stage does MWM have access to client funds.

Funds are withdrawn from the bank account to pay for share purchases and proceeds from sales are credited to the account. Our only association with these accounts is to instruct the broker on what to buy and sell.

David and his team regularly monitor and trade shares in response to changes in market conditions or within individual companies. Clients are provided with quarterly reports and a full end-of-year review plus have the option of accessing live data about their portfolio via a password protected Internet site.

At MWM, we are big fans of performance-based fees, believing that advisors should have to add value to earn the bulk of their income. Sadly, this is a rare view in the investment community.

We have a base fee, which covers administration time and is benchmarked to a typical exchange-traded fund (which tracks the market and is not managed, and has lower fees as a result). Our fee is 0.2% of the portfolio value per quarter (0.8% per year).

Then we track the performance of the portfolio each quarter relative to a benchmark index (such as the NZSX50 Portfolio Index). If the portfolio has outperformed the market, then we ask for a performance fee of 0.27% of the portfolio value per quarter.

If no outperformance is achieved, then no bonus is payable. That way, our interests are aligned with yours.