Focus On Making Good Investment Decisions

Our Process

Quantitative Idea Discovery

• ABACUS – proprietary expectations-based scoring model
• Narrow the universe and prioritize research
• Reduce probability of falling into behavioral traps

Security Selection

• Fundamental bottom-up analysis, growth model analysis, and SWOT analysis
• Project three-year secular earning growth to gain proper perspective

Sector-Neutral Portfolio Construction

• Leverage industry and company selection skill
• Eliminate the potential risks of poor sector rotation and allocation decisions

A risk-balanced approach to exploit inefficiently priced future growth opportunities

Analysis Of Growing Companies On A Forward-Looking Basis

What We Look For

• Secular growth model
• Revenue and earnings growth supported by competitive barriers and advantages
• Confidence in management’s ability to execute its growth strategy
• Clear understanding of the financial and operating characteristics of the business

Typical Growth Models

Supply expansion	Pricing leverage	Product development
Market expansion	Channel productivity	Acquisition-driven
Asset utilization		Cycle dependent

 

Credo U.S. Equity Small Cap Growth Strategy Profile
Inception period	November 2008
Investment Opportunity Set	Our universe includes those companies within and outside the Russell 2000 Growth Index with a general market cap range between $250 million and $3 billion
Active Risks
Relatively concentrated	60 to 80 holdings
Construction / performance benchmark	Russell 2000 Growth Index
Tracking error: expected range	5%-7%
Sector weights	Neutral to the Russell 2000 Growth Index
Factors and Characteristics
Top 10 holdings	Generally 30% to 40% of portfolio weight
Top 10 industries	Generally 15% to 20% of portfolio weight
Market Cap Range	$250M to $3B
Management Style
Decision-making	Tedd Alexander and David Saunders, Co-Portfolio Managers
Growth	Bias toward higher expected growth companies
Selection	Based on identification of mispriced securities and therefore is indifferent to “growth” or “value” labels

 

Credo U.S. Equity Mid Cap Growth Strategy Profile
Inception period	May 2005
Investment Opportunity Set	≈ 800 Russell Mid Cap Index + ≈ 500 companies with a market capitalization between $900M and $13B; 11 economic sectors; ≈ 200 industry groups
Active Risks
Relatively concentrated	45 to 65 holdings
Construction / performance benchmark	Russell Mid Cap Growth Index
Tracking error: expected range	4% to 6%
Sector weights	Neutral to the Russell Mid Cap Growth Index
Factors and Characteristics
Top 10 holdings	Generally 25% to 30% of portfolio weight
Top 10 industries	Generally 45% to 50% of portfolio weight
Market Cap Range	$800M to $15B
Management Style
Decision-making	Tedd Alexander – Portfolio Manager
Growth	Bias toward higher than expected growth companies
Selection	Based on identification of mispriced securities and therefore is indifferent to “growth” or “value” labels
Holding Period (turnover)	Generally 9 to 18 months (70% to 133%)