Select Large Cap Growth Strategy

Overview

Investment approach

The strategy seeks long-term capital appreciation by investing in a concentrated portfolio of large cap equities with high growth potential. Our management team screens potential candidates with an eye to individual company fundamentals, as well as to their macroeconomic outlook. We target firms with what we believe to be a sustainable growth franchise.

Distinguishing Features

  • Fundamental research helps discern what we believe are superior growth companies and focuses management attention on secular growth opportunities rather than cyclical beneficiaries
  • Cross-correlation analysis provides active diversification and helps manage volatility
  • Conviction-weighted portfolio of 25 to 35 stocks, with low turnover and potential for high earnings growth

Investment Process

The Select Large Cap Growth portfolio features a four-step process:

Identify initial ideas

Prioritize candidates for further research:

  • Market cap exceeding $3 billion
  • Profit growth - earnings of greater than 12%
  • High quality - return on equity (ROE) of more than 15%

Evaluate growth drivers

  • Identify industries that are gaining wallet share as a percentage of GDP
  • Target high-quality firms that are dominant in their field and demonstrate a proven business model that we believe can maximize shareholder value
  • Leverage internal research and knowledge

Construct portfolio and manage risk

  • Understand and manage portfolio risk through attention to valuation and cross correlation, which governs volatility
  • Short-term price/earnings ratio multiple opportunity
  • Intermediate-term price/earnings to growth
  • Long-term economic value expectations

Explicit sell discipline

  • Maximize the potential alpha of the portfolio by challenging existing holdings. Integrated sell disciplines prevent rationalization of investment ideas
Thomas M. Galvin, CFA

Thomas M Galvin, CFA

36 years experience
Todd D. Herget

Todd D. Herget

21 years experience
Richard A. Carter

Richard A. Carter

26 years experience

Literature

Literature

Document
Fact Sheet

Disclosures

There is no guarantee the objective will be achieved or that any return expectations will be met.

Investment risks — Market risk may affect a single issuer, sector of the economy, industry or the market as a whole. Growth securities, at times, may not perform as well as value securities or the stock market in general and may be out of favor with investors. Foreign investments subject the strategy to risks, including political, economic, market, social and others within a particular country, as well as to currency instabilities and less stringent financial and accounting standards generally applicable to U.S. issuers. Investments in a limited number of companies or sectors subject the strategy to greater risk of loss. The strategy may invest significantly in issuers within a particular sector, which may be negatively affected by market, economic or other conditions, making the strategy more vulnerable to unfavorable developments in the sector.

Advisory services provided by Columbia Management Capital Advisers, an operating division of Columbia Management Investment Advisers, LLC (“CMIA”) that offers investment management and related services to clients participating in various types of wrap programs.

Diversification does not assure a profit or protect against loss.

These managed account solutions are only available through investment professionals. Not all strategies may be available on all platforms, and fees and terms may vary. Managed account programs may require a minimum asset level and may not be suitable for all investors.