We believe that attractively-valued, high quality stocks with positive momentum will outperform the market over time. This reflects the fact that financial markets are inefficient, which results in pricing dislocations that can be exploited. Many of these inefficiencies are driven by behavioral biases that can remain in place for a long time. We believe that by combining these three investment styles – value, quality, momentum – in a single portfolio, we can deliver consistent results through various market cycles.
Following our investment philosophy, we aim to invest in attractively-valued, high quality small cap stocks, supported by positive momentum. We apply a consistent and disciplined approach in researching and identifying these characteristics across the universe.
Our portfolio managers select individual stocks that have one or more of the value, quality, and momentum characteristics we seek. We combine these stocks to build a portfolio that is collectively cheaper, has higher quality, and has better momentum than the market. To further diversify risk, we invest in a large number of stocks with the style characteristics that we seek.