HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 03_06/15/2010 Domestic Equity
Strategies Overview
mmininalkieo-
.-
A
i 47i 41.
SOUTH ►'., E.
Presented May 3 2010
I
THE
I d r ) BOGDAHN
GROUP
1 W W W. B O G D A H N G R O U P. C O M simplifying your investment and fiduciary decisions
i
Domestic Equity Strategies Overview
Active / Passive
,0
❑ Active Investing — An investment strategy that utilizes trading activity
of securities in a portfolio in efforts to add value and take advantage of
profitable conditions. Active investors often set out to outperform a
designated index or asset class, and add superior returns through this
trading activity.
❑ Passive Investing — An investment strategy that involves very limited
trading of securities within a portfolio. Passive investors may use
index funds to provide the returns of a designated index or broad
exposure to an asset class.
1 r1/4.1?;
® Domestic Equity Strategies Overview
Equity Investing Styles
❑ Growth— An investment style for selecting stocks characterized by
an investor seeking to identify stocks with above - average growth of
sales and earnings. Often these stocks may be characterized with
"expensive" ratios including price -to- earnings and price -to -book
valuations.
❑ Value— An investment style for selecting stocks where an investor
places emphasis on identifying and selecting stocks that are
underpriced in the market. Often these stocks are characterized by
low price -to- earnings and price -to -book ratios compared to the
marketplace.
❑ Other— GARP, Deep Value, Income Value, High Quality Growth
2 M
Domestic Equity Strategies Overview
Market Capitalization
Market Capitalization- A calculation of the number of outstanding shares of
stock of a company multiplied by the share price of that stock, this calculation
is used by investors to indicate the size of a company.
The size of a companies market capitalization can be used to segment the
company into one of this commonly used categories:
Large Cap— Over $10 Billion
Mid Cap— $3 Billion - $10 Billion
Small Cap— $250 Million - $3 Billion
Others: All -Cap, Micro Cap, Nano Cap, Mega Cap, etc.
3 ` ''
Domestic Equity Strategies Overview
J t
a .
Equity Investing Approaches - 4
Below are examples of types of investment strategic approaches that
may be used by managers to attempt to identify profitable securities and
market conditions:
❑ Momentum— An investment strategy based upon buying stocks as they are rising, in
hopes they will continue higher. This strategy is similarly referred to as theme based
investing.
❑ Contrarian— An investment strategy that seeks to identify profitable situations by
identifying and then speculating against the movements of securities. This strategy
focuses on investing against themes in the marketplace.
❑ Quantitative — An investment management philosophy that places significant or total
emphasis on empirical data (i.e. statistics and ratios) of securities to develop
models, theories, or hypothesis in making buy and sell decisions.
❑ Fundamental— An investment management philosophy that focuses on evaluating
securities through a review of all factors including quantitative and qualitative factors
and macro and micro economics to derive buy and sell decisions.
4
Domestic Equity Strategies Overview
Investment
Manager Strategy Managing the Style and Capitalization Allocation Boxes
Example: •
Large Cap Value Large Cap
Growth
Sole Manager
Large Cap Core
Mid Cap Value Mid Cap Core Mid Cap Growth
SmaII Cap Value SmaII Cap Core Small Cap
Growth
•
5 �$ ; ,,,;;
Domestic Equity Strategies Overview
Investment
Manager Strategy Managing the Style and Capitalization Allocation Boxes
Example: •
Large Cap Value Large Cap
Growth
Growth and Value
Managers Large Cap Core
Mid Cap Value Mid Cap Core Mid Cap Growth
•
Small Cap Value Small Cap Core Small Cap
Growth
•
6 Q171 `
Domestic Equity Strategies Overview
Investment
Manager Strategy Managing the Style and Capitalization Allocation Boxes
Example: • •
Large Cap Value Large Cap
Satellite /Opportunistic Growth
and Core Managers
Large Cap Core
Mid Cap Value Mid Cap Core Mid Cap Growth
•
SmaII Cap Value SmaII Cap Core SmaII Cap
Growth
•
7 r