The Columbia Small Cap Equity portfolio seeks to outperform the Russell 2000 Index and peer strategies, and rank solidly in the top quartile over a full market cycle. Our actively managed investment process leverages both internal and external resources and has three main components: idea generation, bottom-up analysis and portfolio construction. This active and fluid process gives us the flexibility to invest in companies in which we have strong conviction and provides the opportunity to outperform the broad market and deliver strong, risk-adjusted performance.
- Seasoned team has nearly 25 years of industry experience, on average, and has managed through various business cycles
- Disciplined, research-driven investment process employed since 1980 has led to historically low turnover
- Focus on financial strength has led to a portfolio of companies with strong balance sheets and low relative valuation to peers. By employing this focus, we have historically been successful at paying what we believe is a low price for the intrinsic value of a business.
Investment ProcessDefine and evaluate investable universe
Prioritize candidates for further research
- Universe is the stocks within the Russell 2000 Index and others with market caps below $2 billion
- Extensive internal and external research network facilitates early identification of anomalies by providing timely and accurate data on under-followed companies
Intensify research efforts on selected candidates
- Evaluate each candidate through fundamental analysis
- Evaluate valuation of potential investment based on a number of financial metrics
- Identify signs of change (new products/management, favorable industry dynamics) that could lead to price appreciation
Diversified portfolio of approximately +/-200 holdings where team maximizes potential alpha by continually challenging existing and potential holdings
- Bottom-up stock selection drives sector/industry weights
- Portfolio construction process yields an optimal combination of stocks with solid fundamentals, strong financial statements and low prices relative to their intrinsic value