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. The investment team's scenario-based approach allows them to assess a wide range of outcomes for the stocks we follow. The investment team favour companies with attractive risk/reward profiles that they 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.
- Material ESG factors are incorporated into the investment process.
- Experienced team of dedicated sector specialists and portfolio managers.
Our approach
Investment philosophy and style
The touchstone of the team's approach is a commitment to understanding a wide variety of outcomes for the stocks the team follow and avoiding attachment to any single forecast. Instead of trying to predict the future, the investment team strives to envision different scenarios that could realistically play out, understand what they would mean for companies they analyze, and use this information to assess what is reflected in share prices today. The team believes this pragmatic approach helps build a collection of favourable risk/reward trade-offs that will deliver good results over time.
Investment process
- The investment team's process begins with unbiased screening, followed by their own research and analysis, and culminates in ongoing active management of the portfolio.
- The team uses 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 the team's checklist undergo rigorous research, which includes four primary elements: company analysis, scenario analysis, catalysts, and valuation.
- The investment team continuously re-evaluate scenarios and risk/reward for companies they follow as market prices shift and/or new information materializes.
- Analysis and integration of material ESG factors are incorporated in the investment approach. While there are no blanket ESG criteria, the aim 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.
- The investment team avoids companies trading at a high multiple on an optimistic earnings outlook, as there often isn’t much upside optionality available.
- The investment team takes a diversified approach that rewards good stock selection and avoids heavily relying on the correctness of a strong point of view.