The Valuation Stewardship™ portfolio is a long-only strategy comprised of approximately 250-300 U.S. traded large cap equity securities believed to offer superior total returns and low beta over long-term investment horizons. The equity securities have attractive valuations and are selected to provide broad economic sector exposure. The Valuation Stewardship™ is a hypothetical model portfolio and does not reflect actual client investments.
Factor-Based investing has devolved into data mining in search of the next factor to explain market returns. There are two major issues almost all factor strategies face:
1. Overly reliant on the “value” factor (Book/Price) as a proxy for valuation.
Our research shows B/P provides no alpha significance and is only effective when correlated with Applied Finance’s Intrinsic Value
2. The punishment of wealth-creating firms
Firms that are growing their invested capital base and profitable display wealth compounding properties that result in outperformance.
Valuation Stewardship™ is an investment strategy that corrects these issues by systematically incorporating Applied Finance Intrinsic Value and Financial Yield factors. This strategy seeks to own a broad-based group of large-cap securities that display favorable shareholder ownership attributes while trading at a discount to their intrinsic value.
QUANTITATIVE VALUATION® INVESTMENT PROCESS
Quantitative Valuation® Investing begins and ends with calculating the intrinsic value of every stock in a benchmark against which a portfolio is constructed and comparing those values against traded prices.
Objectives and Characteristics
- Risk Mitigation
- Capital Appreciation
- Team Managed
- Diversified 250-300 Holdings
- Beta: 0.88
- Avg Count: 273 companies
- Rebalanced Semi-annually
- Annual Turnover: 27%
- Sharp Ratio: 0.81
Annualized rates of return:
Contact us to learn more about our Valuation Stewardship™ investment strategy
Valuation Stewardship™ DISCLAIMER
The Valuation Stewardship portfolio is a long-only strategy comprised of approximately 250-300 U.S. traded large cap equity securities believed to offer superior total returns and low beta over long-term investment horizons. The equity securities have attractive valuations and are selected to provide broad economic sector exposure. The Valuation Stewardship is a hypothetical model portfolio and does not reflect actual client investments.
The above presentation is based on holdings in the Valuation Stewardship strategy since October 30, 1998. Holdings in the Valuation Stewardship strategy and security prices are subject to change throughout the year.
Gross Performance of the Valuation Stewardship strategy is based on a hypothetical fully-invested portfolio and excludes all fees and expenses. Most individual accounts will have some cash level. Performance is calculated on a pre-tax basis and does not include any reduction for applicable non-U.S. withholding taxes, if any. Past performance is no guarantee of future results. Individual security weights may vary by account.
References to stocks held in the Valuation Stewardship are for informational purposes only and do not constitute an offer to buy or sell any security.
The information and data contained in this presentation were obtained from sources deemed to be reliable, but Applied Finance Capital Management LLC makes no guarantee as to the accuracy or completeness of any such information or data. The information in this report is not intended to be used as the primary basis of investment decisions, and Applied Finance Capital Management LLC makes no recommendation as to the suitability of investing in any particular security. Due to individual investor requirements, this report should not be construed as advice meant to meet the investment needs of any investor. Any opinions and projections expressed herein reflect our judgment at this date and are subject to change without notice. Applied Finance Capital Management LLC, its owners, employees and/or clients may have positions in any security that is discussed in this report.
The Russell 1000 Index is a market capitalization-weighted index of 1000 of the largest U.S. equities. The Russell 1000 Value index measures the performance of the Russell 1000’s value segment, which includes firms with lower price-to-book ratios and lower expected growth values.
The S&P 500 Index is a market capitalization-weighted index of 500 of the largest U.S equities and is often used as the standard for measuring large-cap U.S. stock market performance.
An investor cannot directly invest in an index and the performance of the index may be materially different from the actual performance obtained by a specific investor.