Quantitative Equity

We utilize proprietary, sector-specific models to identify those stocks possessing favorable characteristics for outperformance within their respective sector. Our quantitative investment process utilizes ten (10) sector-specific models to identify the most attractive companies within each sector in an objective and consistent manner. The process utilizes region sector-specific models to differentiate between winners and losers. Models ensure that a constant, positive exposure to key characteristics is maintained. Region and sector neutrality, along with diversification of holdings avoids unintended consequences and allows for more consistent model active return generation.

Our model evaluates a variable pool of over 80 factors that are categorized into seven broad classifications — Valuation, Capital Management, Earnings Momentum, Earnings Quality, Price Momentum, Fundamental Operations, and Market Sentiment. The use of several independent factor classes as opposed to a narrower universe helps to smooth returns and avoid extreme return swings. The model further ensures that a constant, positive exposure to key financial and/or market characteristics is maintained.

Risk controls are set at the sector. We utilize region-specific models to differentiate between winning and losing stocks. The sector neutral policy combined with a diversification of holdings helps to avoid unintended consequences, allows for more consistent portfolio returns, lowers tracking error and allows stock specific information to generate the bulk of the portfolio's returns.