Market inefficiencies are a result of human behavior. As the same behaviors persist over time, market anomalies will not disappear. We believe that through a disciplined, dispassionate approach to investing we can identify and exploit these anomalies. In this strategy, we seek companies with the following characteristics:
- Quality: High quality earnings and management teams
- Momentum: Improving business trends and superior market sentiment
- Valuation: Trade at a discount to their peers
The team employs a four-step investment process which first employs a disciplined methodology that seeks to identify stocks in each economic sector that are high quality stocks with improving business trends and superior market sentiment that also have attractive valuations. We then use an optimizer to help create a portfolio of well-diversified, compensated risks that seeks to deliver consistent returns.
For each trade suggested by the optimization, the portfolio managers do in-depth qualitative company research to ensure that the trade helps achieve the goal of a well-diversified portfolio that meets the team’s investment thesis.
Finally, sophisticated trading techniques help ensure that the trades are executed in a cost-effective manner, ensuring that the alpha of the strategy is not unduly encumbered by trading costs.
Distinct Strategy Characteristics
- Time-tested investment process has remained unchanged since inception.
- Hybrid investment process blends the best of quantitative and qualitative research.
- Portfolio construction ensures style purity and improves one’s ability to manage portfolio-level, stock-specific, and common-factor risks.
- Advanced efficient trading techniques maximize the use of low cost crossing networks, allow for a more opportunistic provision of liquidity, and enhance sector-specific traders’ focus on key trades.