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Investment Approach

The Columbia Small/Mid Cap Growth strategy seeks to provide consistent, repeatable excess returns, relative to the Russell 2500 Growth Index. Our management team combines fundamental and quantitative analysis with risk management techniques to construct a portfolio of high-quality, small- and mid-cap growth companies that can sustain above-average margin structures on capital.

Distinguishing Features

  • Five senior managers, each with 15+ years of experience, have keen insight into company management*
  • Sector manager structure has historically resulted in strong investment performance within each sector
  • Multidimensional risk management has historically resulted in consistent, risk-adjusted returns

Investment Process

Define and evaluate investable universe
  • Consists of equity securities that have market capitalizations similar to those found in the Russell 2500 Growth Index
  • Analysts maintain opinions of each stock weighing greater than 20 basis points in the Russell 2500 Growth Index, IPOs and existing portfolio holdings
Conduct research and valuation analysis

Each portfolio manager/analyst actively follows 50 – 100 potentially appropriate companies based on:

  • Fundamental research that focuses on indicators of self-funding growth, insider-behavior metrics and insight into company management
  • Quantitative research that uses internal and external models
  • Valuation models that identify upside potential and downside risk
Construct portfolio and manage risk

Diversified portfolio of 100 - 120 undervalued growth companies

  • Aggregate valuation work of each security to define risk/reward spectrum of total investment universe
  • Combine valuation work with individual securities' - historical volatility to determine capital allocation
  • Confirm parameters of 5% maximum position size, +/- 500 bp relative sector weights and 4% – 8% tracking error