The U.S. Equity Strategy is a well-diversified, actively-managed portfolio that seeks to provide long-term capital growth by investing in U.S. companies.

The strategy’s investment process is primarily driven by fundamental research with stock selection decisions ultimately based on an understanding of the companies, their business, and their outlook. Our scenario-based approach allows us to assess a wide range of outcomes for the stocks we follow. We favour companies with attractive risk/reward profiles that we believe can deliver strong risk-adjusted results over the long term.

Strategy overview

• Core large-cap U.S. equity portfolio.
• Investment process based primarily on fundamental research.
• Focus on companies with attractive risk/reward characteristics.
• Scenario-based approach continuously re-evaluates potential reward and risk.
• ESG is integrated into the investment process.
• Experienced team of dedicated sector specialists and portfolio managers.

Our approach

Investment philosophy and style

The touchstone of our approach is a commitment to understanding a wide variety of outcomes for the stocks we follow and avoiding attachment to any single forecast. Instead of trying to predict the future, we strive to envision different scenarios that could realistically play out, understand what they would mean for companies we analyze, and use this information to assess what is reflected in share prices today. We believe this pragmatic approach helps in handicapping the odds available in each investment and in building a collection of favourable risk/reward trade-offs that will deliver good results over time.

Investment process

• Our process begins with unbiased screening, followed by our own research and analysis, and culminates in ongoing active management of the portfolio.
• We use an initial “checklist” as a starting point for assessing potential investments. The checklist rewards characteristics that many good stocks have in common while penalizing those that many likely poor performers share.
• The stocks that pass our checklist undergo rigorous research, which includes four primary elements: company analysis, scenario analysis, catalysts, and valuation.
• We continuously re-evaluate scenarios and risk/reward for companies we follow as market prices shift and/or new information materializes.
• Ongoing analysis and integration of material ESG factors are embedded in the investment approach. While there are no blanket ESG criteria, the key objective of the analysis is to identify, assess, and engage with companies on relevant risks and opportunities.

Portfolio construction

• In constructing the portfolio, the team focuses on scenario analysis in order to identify companies where poor fundamental outcomes are anticipated (and are therefore reflected in the price), or fairly valued business that are growing at a superior rate relative to the market.
• We avoid companies trading at a high multiple on an optimistic earnings outlook, as there often isn’t much upside optionality available.
• We take a diversified approach that rewards good stock selection and avoids heavily relying on the correctness of a strong point of view.