Applied Global Core Equity Strategy
Applied Global Core Equity Strategy

Applied Global Core Equity Strategy

 
 
 
Summary

The Applied Global Core Equity Strategy seeks to protect investors from prolonged periods of style-driven underperformance. Their flexible approach combines quantitative models with stock-specific research that aims to identify 30-60 global companies with attractive valuations, above-average appreciation potential and competitive dividends.

≥90%
Typical Active Share
30-60
Typical Number of Holdings
 
 
Investment Approach
Philosophy

Broad market factors can drive majority of returns

By remaining flexible, we can tilt the portfolio towards styles, regions or sectors we believe have the greatest likelihood of producing excess returns

Stock selection can be additive to alpha generation

Company-specific analysis can help generate additional contribution to portfolio's overall return.

High active share may be the key to outperformance

By limiting the number of position, we run a high active share strategy

 
Differentiators
CAPITALIZES ON CURRENT MARKET FACTORS, UNCONSTRAINED BY STYLE

Portfolio is positioned to gain exposure to broad market factors we believe are in the early stages of outperforming and will drive returns in the current market environment.

STOCK-SPECIFIC RESEARCH ALSO ADDS VALUE

Alpha from idiosyncratic (stock-specific) risk is sought by conducting research on individual stocks, customized to each company and its specific industry.

FOCUS ON RISK MANAGEMENT

Attempt to capture common and idiosyncratic factors without unintended exposures.

 
 
 
Investment Process
1
Determined dominant

Using proprietary quantitative models, team forecasts those factors it believes will dominate markets over the next 6‐12 months.

2
Screen stocks

Stocks are ranked by their relative exposure to desired factors, which narrows the universe to the top quintile (20%) of stocks in each region.

3
Risk Decomposition

To further refine the pool, each high‐scoring stock undergoes risk decomposition analysis to assess its effect on desired and undesired exposures.

4
Conduct research

Stocks are analyzed individually, based on the idiosyncratic opportunities they offer.

5
Final Portfolio

Portfolio of high-conviction stocks is constructed. Stock weightings are determined by a stock’s exposure to desired factors, the confidence level of its idiosyncratic opportunity and its contribution to reducing intra-stock correlations within the portfolio.1

This represents how the portfolio management team generally implements its process under normal market conditions.

1The Global Core Equity portfolio typically has 30 – 60 positions. Weights and the number of securities provided are a typical range, not a maximum number. The portfolio may exceed this from time to time due to market conditions and outstanding trades.

 
 
Portfolio Managers
Head of Applied Equity Advisors Team
31 years industry experience
Executive Director
14 years industry experience
 
 
Insights
Investment Insight
Quantamental investing: The future is now
May 18, 2018
Applied Equity Advisors combines factor investing with stock-specific research. Tapping both sources of excess returns helps us achieve greater consistency of returns and avoid behavioral pitfalls.
Market Outlook
Applied Equity Advisors May 2018 Monthly Commentary
May 31, 2018
Andrew Slimmon, head of the Applied Equity Advisor’s team, discusses his market views in the May 2018 Monthly Commentary.
 
 
 
 

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