The investment team utilizes the multi-factor screens to narrow a larger universe of companies to a 200 common stock universe that is based upon the most attractive opportunities across the economic sectors defined by the S&P 500. Once the 200 common stock universe is set, it is divided into quartiles with the first quartile representing the most attractive stocks based on risk adjusted rates of return.
The 200 stock universe represents a broad diversity of companies, which supports flexibility in structuring investment portfolios to meet our investment objectives. The number of stocks in a client’s portfolio varies from forty to sixty companies, depending on the size and investment objective of the particular account. Because the common stock universe of companies is ranked based on risk adjusted expected return, it provides useful information as a discipline in selecting particular investment candidates over others and meeting our investment objective of finding stocks that sell at discounts relative to their expected growth rates. The majority of the stocks are purchased from the first quartile.
The portfolio is continuously monitored for opportunities to allocate funds to the most attractive companies based upon projected risk adjusted rates of return.