GLOBAL GROWTH STRATEGY

The portfolio pursues its objective by employing both a “top-down” sector weighting process as well as a “bottom-up” stock selection process. From an initial universe of some 800 company’s quantitative screens and fundamental analysis techniques are applied to reduce the universe to about a 100 company “Active Watch” list. Sector strategy considerations are then overlaid versus this “Active Watch” list in conjunction with more rigorous screening and analysis to construct a portfolio of between 40 to 50 holdings.

Security selection emphasizes investing in the common stocks of globally diversified, industry leading, financially strong and well managed companies that offer above average growth prospects at reasonable/attractive valuations. Other key selection criteria include: strong or unique business franchise, a history of delivering superior financial performance, and consistency regardless of the business cycle. Other important criteria are factors such as accelerating revenue/earnings growth, strong cash flows, and a history of low stock price volatility.    

Risk is primarily managed by broadly diversifying the portfolio across geographies, economic sectors, industries, and companies. The maximum allowable sector weighting is 1.5 times the weighting relative to the S&P 500 Index. The maximum allowable single position size is 4% of the portfolio. Other risk management tools include a well defined sell discipline, the discretion to raise the cash position up to 25%, and hedging via the purchase of selected mutual funds or other securities.

The portfolio generally takes a long-term view to investing and the portfolio managers strive for lower turnover rates. The Global Growth Portfolio is suitable for investors who seek a global company equity strategy as the core component of an investment portfolio.