The investment process behind our Disciplined Equity suite of strategies is built upon the following core tenets:
However, no static discipline works for all market segments or under all market conditions.
Definable market segments – such as large cap growth or technology – have distinct dynamics. Therefore, each stock should be evaluated relative to its relevant peer groups to yield more accurate composite return expectations.
Stock returns are driven by a variety of factors. Therefore, a diverse set of valuation metrics need to be considered for more robust return expectations and more consistent results.
Individual valuation metrics exhibit variation in their ability to forecast returns through time. Thus, factor weights should be systematically adapted to evolving patterns of effectiveness.
Careful portfolio construction goes hand-in-hand with individual stock selection. Therefore, return expectations must be captured as active portfolio risk, whereas unintended active risks should be minimized.