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Herndon Strategies: Large Cap Core Equity, abstract image

  1. Domestic Strategies

Concentrated Large Cap Equity

Concentrated Large Cap Equity

Experience has shown us that the most consistent method for producing better risk-adjusted returns than the peer group over time involves the use of a highly disciplined, risk-managed approach. And while either the growth or value strategy may dominate for certain periods, portfolios constructed with complementary elements of both strategies will produce more dependable benchmark-beating results.

  • Our core product is designed to give the client exposure to public large capitalization companies in the US which represent an attractive mix of quality and valuation.
  • The goal of the Portfolio is to outperform a large capitalization core benchmark such as the Russell 1000 or S&P 500 over a market cycle.
  • Our investment process focuses on bottom-up stock selection, but also benefits from macroeconomic analysis.
  • Outperformance will be accomplished by identifying the most attractive stocks in each sector and then optimally constructing a portfolio which contains them.

Supplemental Information

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Our Systematic Process

Strategy Icon: stock selection

Stock Selection

  • Step 1: Identify VCO
  • Step 2: Qualify for Potential Inclusion
  • Step 3: Rank
  • Step 4: Fundamental Analysis
  • Step 5: Purchase

Strategy Icon: sector allocation

Sector Allocation

  • Step 1: Compare overall VCOs in Russell 200 Index to each sector in Russell 200
  • Step 2: Calculate Target Sector Weights based on Russell 1000 value utilizing information from step 1
  • Step 3: Adjust Portfolio

Strategy Icon: risk management

Risk Management

  • Sector diversification rules
  • Security diversification rules S
  • eek to be fully invested
  • ~25 - 40 securities
  • Top 10 positions are earned not purchased

Strategy Icon: sell discipline

Sell Discipline

  • Weekly Sector Adjustments:
  • Profit taking
  • Fundamental assessment
  • Conviction Check