Why choose this strategy?
- As an actively managed Small/Mid Cap allocation
- To focus on small company stocks of attractively valued companies with prospects for sustainable growth and profitabiity
- As a complement to a more diversified index product
Investment strategy
- The investment universe includes all stocks generally within the market cap range of the benchmark at initial purchase
- We believe that known and recurring inefficiencies are available in the small cap market causing stock prices to deviate from their intrinsic value
- These inefficiencies can be categorized into three areas: misunderstood franchises, underfollowed and special situations
- A repeatable investment process can uncover higher quality businesses that are trading at a discount to intrinsic value utilizing rigorous fundamental research
- Disciplined bottom-up portfolio construction within a risk aware framework
- Sector guidelines: typical range is +/- 50% for benchmark sectors over 10%
- Individual security exposure: typical positions range from 0.5 to 2.5%, with no one stock typically greater than 3% of the portfolio
- 75 to 100 stocks typically; turnover: 25% to 50% annually
