CorePlus Approach

 

 

 

 

 

 

Our CorePlus approach to portfolio management consists of both strategic and tactical investing, the mix of which varies and is dependent upon market opportunities and volatility. Our CorePlus process consists of both top-down and bottom-up research and analysis. Our top-down analysis influences our asset class, country, and sector weightings while our bottom-up analysis determines the specific securities in our portfolios.

We constantly research and monitor a large number of securities across many asset classes, and we never force the process. When there are too few compelling opportunities available, we are content to keep excess funds in cash-like investments and patiently wait for better opportunities to arise.

 

The Strategic Component ("Core")
The strategic portion of each portfolio consists of longer-term positions that we initially expect to own for at least 1-5 years. These are securities that we determine are mispriced relative to their fundamentals, and they include both long and short positions. The greater our conviction, the larger the position size. These positions typically constitute the majority of each portfolio.

Our strategic positions are driven by our fundamental research, our economic analysis, and our valuation work. Just as important is our ability to patiently wait for our thesis to unfold. We expect these positions to perform very well over time on an annualized basis, and they tend to have significantly more long-term reward potential than risk.

 

The Tactical Component ("Plus")
The tactical portion of each portfolio adds a very flexible, dynamic, and opportunistic overlay to our strategic component. Certain of these tactical positions are meant to exploit short-term opportunities while others provide shorter-term protection to a portion or all of the portfolio. We expect to own these positions for less than one year. Our tactical positions include:

  • Non-core securities which we find to be mispriced and which provide a compelling trading opportunity and risk/reward trade-off
  • Additions to "full" core holding positions on a price pullback with an eye towards selling this "excess" position on a rebound
  • Securities used to hedge specific core holdings
  • Positions used to adjust our short-term asset class, market, or net long/short exposure