Strategien
Lösungen & Multi-Asset
Applied U.S. Core Equity Strategy
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Applied U.S. Core Equity Strategy |
Strategien
Lösungen & Multi-Asset
Applied U.S. Core Equity Strategy
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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.
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. |
1 | Determined dominant |
Using proprietary quantitative models, team forecasts those factors it believes will dominate markets over the next 6‐12 months. |
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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. |
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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. |
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4 | Conduct research |
Stocks are analyzed individually, based on the idiosyncratic opportunities they offer. |
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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 U.S. 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. |