Maximising your opportunity set across styles and market caps is one thing. Being able to evaluate and form a view on a much broader universe is another. It requires an incredible depth of talent, experience, knowledge and insight to fully exploit the flexibility that an all-cap approach can offer.
A nimble, best ideas portfolio spanning market caps and styles, with the flexibility to adjust to changing market conditions.
A defined but flexible framework provides a robust and pragmatic approach to identifying our highest conviction ideas.
Fundamental insights from our 100+ US equity analysts help uncover opportunities across the broadest US investment universe.
General Portfolio Risks. Capital risk – the value of your investment will vary and is not guaranteed. It will be affected by changes in the exchange rate between the base currency of the portfolio and the currency in which you subscribed, if different. Equity risk – in general, equities involve higher risks than bonds or money market instruments. Geographic concentration risk – to the extent that a portfolio invests a large portion of its assets in a particular geographic area, its performance will be more strongly affected by events within that area. Hedging risk – a portfolio's attempts to reduce or eliminate certain risks through hedging may not work as intended. Investment portfolio risk – investing in portfolios involves certain risks an investor would not face if investing in markets directly. Management risk – the investment manager or its designees may at times find their obligations to a portfolio to be in conflict with their obligations to other investment portfolios they manage (although in such cases, all portfolios will be dealt with equitably). Operational risk – operational failures could lead to disruptions of portfolio operations or financial losses.
The all cap opportunity strategy, is a strategy where we can invest across the market cap spectrum and also across the style spectrum as opportunities arise in the market. So the primary benchmark is the Russell 3000, and our goal is to just try to consistently outperform that benchmark. Pivoting zigging and zagging as opportunities shift, sometimes getting growth here, sometimes tilting more towards value, sometimes being a little bit more up cap, sometimes being a little more down cap. The important thing to know about four pillars is that it's a framework I've been using to select stocks since around 2011. I use it as an analyst. I've used it as a fund manager. So it's got well over a decade of history under its belt and I believe in it pretty strongly.In terms of the way that the four pillars process works philosophically, I believe that stock prices over the short to medium term call it 1 to 2 years are a function of supply and demand. And what that means, you know, a high quality stock doesn't go up because it's high quality, high quality stock goes up because somebody is buying it and somebody else who owns it doesn't want to sell it unless the price is a little bit higher. And so each of the four pillars represents an incremental reason for somebody like me, somebody doing fundamental research on an equity to be interested in buying it. And the goal is to stack together as many positive attributes, as many incremental reasons for somebody to want to buy a stock as you can, because the more things you have working in your favor, the higher the hit rate's going to be on that idea and the greater your probability of success if you follow the process systematically.A lot of people here are the four pillars framework and just think, this is an algorithm and I can just plug in the inputs into the algorithm and you know, get so replicate, replicate the model. And what I, what I'd say is that it's actually in practice a lot harder to do that than you'd think. Each of the pillars has significant judgment overlay to it and scores are changing in real time. I'm updating them constantly, at least once a quarter for each stock I cover. And I think that the fact that it is so fluid and mercurial in a sense is what makes this hard to replicate.
Justin White explains the US All-Cap Opportunities Equity Strategy
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