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Herndon Strategies: Large Cap Value Equity, abstract image

  1. Domestic Strategies

Large Cap Value Equity

Large Cap Value Equity

We look for broken stocks not broken companies. Our value philosophy preaches that true value is defined by companies that trade at a discount to what their fundamentals merit. Identifying sound companies out of favor with investors due to temporary conditions has historically proven to be a very successful strategy as their true value is ultimately recognized in the marketplace.

  • This product is designed to give our clients exposure to companies which are undervalued versus their peers but have demonstrated the ability to produce better than market returns.
  • The goal of the product is to outperform the Russell 1000 Value Index over a market cycle.
  • Quality and liquidity are highly emphasized.
  • A rigorous risk management process is applied during construction of the portfolio.
  • The portfolio is fully invested at all times.

Supplemental Information

Large Cap Value Fact Sheet 

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 1000 Index to each sector in Russell 1000
  • 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
  • Seek to be fully invested
  • ~40 - 70 securities
  • Top 10 positions are earned not purchased

Strategy Icon: sell discipline

Sell Discipline

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