The Columbia Focused Large Cap Growth team believes that earnings growth is the critical driver of stock prices over the long term. Employing fundamental research, the team seeks to identify companies gaining market share in growing industries.
The investment team screens the universe of publicly-traded companies for the most attractive growth stocks. Investment candidates will have a market capitalization greater than $3 billion, earnings growth greater than 12%, and return on equity greater than 15%. This initial screen results in a focused universe of approximately 150 to 300 qualified growth companies for further consideration. While the investment approach may begin with a top-down review to identify growth industries, most of the team's effort is devoted to bottom-up analysis.
The investment team constructs a mix of established- and emerging-growth companies designed to generate earnings-per-share growth in the mid to high teens – considerably higher than the overall market. Portfolio construction considers valuation and cross correlation among investment candidates. Typically, no company will be greater than than 5% of the portfolio, and portfolio cross-correlation will average less than benchmark. The portfolio is composed of 25-35 names.
Portfolio Benchmark: Russell 1000 Growth Index
Portfolio parameters are internal guidelines used by the investment team and are subject to change without notice. Formal investment parameters are set forth in the offering documents or investment management agreement.