The Small Cap Growth strategy seeks superior capital appreciation through careful selection from a universe of high-quality, small-capitalization growth companies. We generally invest in profitable companies selling at reasonable valuations utilizing a bottom-up fundamental approach. We are a conservative growth investor and invest in companies for long-term capital appreciation which results in below average turnover.
Strategy overview
- Belief in a strong correlation between a company's earnings growth and its stock price appreciation
- Focus on companies that exhibit consistent growth characteristics, a solid balance sheet and a strong management team
- Belief that companies with steady revenue and earnings growth contribute to low portfolio volatility and long term out performance
Approach
Investment process
- High conviction, bottom-up fundamental approach built around a long investment horizon
- Uniquely qualified - three team members with CPAs in addition to CFAs, drive deeper analyses of company accounting issues to distinguish high quality earnings from unsustainable earnings
- Low volatility and downside protection through a bottom-up fundamental analysis targeting profitable companies generating more consistent financial results
Portfolio construction
- Designed to outperform the Russell 2000 Growth Index and Russell 2000 Index on an annualized basis over the long-term
- Risk controls
- Maximum exposure to any one company will be 2.5% at cost and 4.5% at market
- Broad industry and sector exposure across 65-80 holdings with no large sector bets
- Fully invested in equities; no market timing
- Regular industry and sector attribution reviewed by investment team
- Low portfolio turnover: 15-20% annual average
- Low composite dispersion across portfolios*