Equity Selection —A Global and Disciplined Process
We believe that great investment opportunities can be found anywhere in the world. Therefore, our research has no geographic boundaries. Our universe of potential companies exceeds 9000 and covers 32 countries, 10 sectors, and 60 industry groups. The list includes the S&P 500 and Russell 2000 index of small companies

Sector and Industry Group Analysis
Academic studies have proven that over 50% of a company’s stock price movement is correlated to the general movement of its economic sector and industry group. Therefore, it is essential to invest in strong and rising sectors and industries. Our research divides stock markets into 10 economic sectors and 60 industry groups. Each sector and industry group is analyzed and only those determined to be attractive are considered for purchase.

Stock Selection Process - Quantitative and Qualitative
Over the years, our research has identified a number of fundamental characteristics that lead to long term, above average stock price performance. These criteria include a company’s balance sheet strength, cash flow, profit growth and market share dominance. We endeavor to pay a reasonable price for the companies that fit our stringent criteria and do this by correlating stock price valuation with profit growth.

In an effort to isolate great companies, we screen our entire global universe of companies using a proprietary in-house computer model that measures each company in terms of our criteria. Only the top 150 companies are considered for purchase and each is arranged by its respective economic sector and industry group. Those companies in declining industry groups are removed from consideration, further reducing our list.

The final phase of our stock selection involves our own “hands on” research as well as input from our research partners. The result of this extensive process yields a short list of high quality companies with superior fundamentals and management. Moreover, the final list of companies represents a number of strong industry groups from various countries and multiple market capitalizations.

Equity Portfolio Maintenance and Sell Disciplines
To ensure the continued quality of your investments, we monitor each position daily and review each client portfolio weekly. In addition, we re-run our screening process weekly. We sell stocks for a number of reasons including: a company no longer meets our criteria; the economy changes; the sector or industry deteriorates; the price exceeds profit growth; or there is a change in management.

Fixed Income
Over one third of our total assets under management are invested in fixed income markets. Our fixed income assets are dedicated to individual securities, not bond funds. These positions include US treasury, government agency, corporate, and municipal bonds.

Our fixed income allocations are driven by our macro-economic and interest rate cycle analysis, and your income tax circumstances. We have strict credit quality requirements for the bulk of our fixed income management. In the selection of corporate fixed income, we leverage our work in equity research to isolate opportunities in the corporate bond market. Depending on client circumstances we may enter the high yield market for a small percentage of the portfolio to enhance income.

Typically, fixed income is employed to provide supplemental income while mitigating the risk of an all equity portfolio.

Real Estate Investment Trusts
Depending on the economic cycle and client circumstances, real estate investment trusts (REITs) may also be employed. These securities trade on open market exchanges such as the New York Stock Exchange and allow you to participate in the real estate market with the benefit of daily liquidity that owning real estate properties does not offer. Our macro-economic research and interest rate cycle analysis, along with your tax circumstances drive our REIT allocations.

The Difference