U.S. Core portfolios seek to deliver long-term returns that exceed the benchmark, primarily through bottom-up stock selection leveraging the fundamental insights of our dedicated team of career research analysts. These strategies are benchmark-aware, risk aware and range from enhanced index to 130/30 extension strategies.
It is our belief that strong investment results can be consistently achieved through bottom-up, strong stock selection with minimal exposure to risks associated with market timing or factor bets. Our stock selection philosophy is the heart of our process. We believe that a company’s stock price should reflect the present value of its long-term future cash flows. By looking beyond any near term issues and understanding the long-term “normalized” earnings power of a company, we can take advantage of the temporary mis-pricing of stocks. This philosophy and disciplined approach to investing has been in place since 1986 and has proved quite successful in both positive and negative market environments.
Our disciplined process is based on long-term fundamental projections that are provided by our team of U.S. Equity analysts. These projections are uniformly captured within our dividend discount model. The model is forward looking and considers business cycles, business risk, and cash flow reinvestment. Our approach is different from other approaches that use only historical data and rely heavily upon current earnings momentum or short-term events. Consequently, our fund is most successful when: 1) the market values companies on their fundamental long-term expected profitability; and 2) our research analysts’ forecasts are more accurate than the market consensus.