Our Process

Our process focuses on combining macro market environment analysis with focused fundamental research to construct portfolios that reflect our investment views.

The table below offers a closer look at the steps of our disciplined, repeatable investment process. Click a step for further details.

Step 1: Idea Generation

Step 1: Idea Generation

Daily Assessment

Our investment process begins with a daily assessment of markets, research items, geopolitical events, and economic conditions.  Our investment professionals utilize a global network of macro, policy, and industry experts to explore issues in greater depth.

Relative Price Strength 

In conjunction with our ongoing appraisal of the investment landscape, we employ two screens to assist with portfolio construction.  Through one screen, we look at the performance of regions, countries, sectors, and stocks on an absolute basis and versus their respective Index.  This proprietary Relative Price Strength Screen identifies how each of these groups is performing within the context of the Index in which they reside and absolute terms.  Based on 12-month price momentum, these screens are a key indicator of investor behavior.

Quantitative Fundamental Company Scoring – Quintiles

An additional screen quantitatively ranks the fundamental factors of individual companies.  Each company is given a score of 1 to 5 (5 being the highest score, 1 being the lowest) based on their Quality, Growth, and Value characteristics.  Also, an overall score is assigned to each stock.  The results of the overall scoring process place each stock into the appropriate quintile.  Our targets for emphasis in client portfolios reside in the 3rd, 4th, and 5th quintiles.

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Step 2: Fundamental Research

Step 2: Fundamental Research

Company Assessment

As our fundamental research moves to individual companies, our efforts center on the quality of the company’s franchise, management, financials, and growth prospects.  We also focus on the valuation of the company’s stock to ensure that the pricing of the stock is congruent with the company’s earnings growth rate.   We invest in companies where we have the most confidence that their rate of growth is superior to industry peers, above consensus, and sustainable.

Macroeconomic & Geopolitical Backdrop

Our analysis also includes the global macroeconomic and geopolitical backdrop which provides the context for our investment decisions when determining our sector, country and asset class allocations.. While utilizing the news, market data and research to which all companies have access, we bring two specialized resources to our appraisal of current events – our Portfolio Management team and our Advisory Board.

Investment Theme Development

Our consideration of the macroeconomic and geopolitical backdrop also allows us to begin developing investment themes to include in our portfolios or confirm themes that currently exist in our portfolios.  These themes may include such things as the effects of technology and innovation, demographics and consumer behavior, or government policy.  In identifying these themes, our goal is to focus on clusters of stocks that will benefit from their inclusion in these structural shifts.

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Step 3: Portfolio Construction

Step 3: Portfolio Construction

Portfolio Allocations

Allocations in portfolios are based on our overall assessment of the current market environment combined with our conviction in country, sector, and stock trends. Allocations are monitored on an ongoing basis to ensure that our investment strategy is being implemented effectively and portfolio risk parameters are maintained.

Sell Disciplines

We sell a position in our portfolio for two general reasons, a deterioration in fundamentals and/or a deterioration in technical factors. The former could include disruption of an investment theme, erosion of growth and/or valuation, or a better alternative to a current holding. The latter could include emergence of new market leadership, failure of a position’s relative price strength, or a significant inter-day downward price movement versus the broad market.

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Step 4: Risk Management

Step 4: Risk Management

Portfolio Risk Control

Portfolio and positional risk management are integral parts of the investment decision-making and portfolio construction processes. We us the Bloomberg Portfolio Rick and Analytics function as our primary system for monitoring and managing risk. For the overall portfolio, projected tracking error and volatility will be monitored as well as factor exposures. Individual positions will be monitored for their absolute and marginal contribution to risk as well as factor exposure.

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