Institutional Strategies
Small Cap Growth
Investment Philosophy
The team seeks to purchase successful, innovative small-cap growth companies that are pursuing large-market opportunities.
We believe common characteristics of successful small-cap growth companies are:
- Serve large-market opportunities and/or markets growing substantially in excess of the average industry and/or the general economy
- Leaders in their industry
- Enduring financial model
- Effective company management
Investment Process
The team looks for sustainable growth that it believes is highly valued in the market and driven by the following components:
- Sales unit growth
- Margins showing upward momentum
- Internal cash flow generation
- Rising ROIC
Once a company is selected, the following is monitored on a regular basis:
- Earnings quality, financial metrics
- Competitive trends
- Management's ability to execute
- Quantitative risk review
Diversification across Growth Spectrum
Throughout the portfolio construction process, the team monitors the strategy's allocation across a proprietary spectrum of types of growth companies. Any of these categories may assume market leadership, so the team strives to maintain exposure to each. The growth spectrum is comprised of four major categories: Aggressive Growth, Accelerating Growth, Consistent Growth and Out of Favor Growth.
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Key Features
Composite Performance History Since | 2/1/2003 |
---|---|
Benchmark | Russell 2000 Growth Index |
Style | Fundamental, Growth |
Target Alpha | 200 bps above Index Over full market cycles (3-5 years) |
Peer Universe | U.S. Small Cap Growth Equity |
Typical Tracking Error | 400-800 bps |
Holdings Range | 70-90 |
Max Position Size | 5% |
Sectors | +/- 10 percentage points of the Index |
Proprietary Growth Spectrum | Diversification across four growth buckets: Aggressive, Accelerating, Consistent and Out of Favor |
Investment Vehicles | Institutional Separate Account Collective Investment Trust U.S. Mutual Fund: Institutional Share Class Variable Insurance Portfolio SMA Model Delivery |