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Anchor’s Equity Strategy identifies the five most important Top/Down Factors that impact investment performance. The process begins with unique macro-economic models that identify global trends. The research team then identifies economic sector and specific industry rotation. They also determine whether political changes are hindering or helping the free market process. Finally the research team establishes whether there are any external environmental factors influencing their investment decision, such as accounting transparency and market liquidity.
Advanced Quantitative Disciplines
Stocks are ranked based on 32 quantitative models, in order to fully investigate their fundamental value. Absolute and relative valuation models are based on current and projected Earnings, Revenues, EBITDA, Book Value, Cash Flow and Free Cash Flow. Historic and projected growth rates are compared to valuation metrics. Earnings quality analysis is performed using Free Cash Flow/Earnings comparisons. Dividend Discount and Asset Valuation Models are used to project investment returns. Insider Activity, Institutional Money Flow and Market Rotation Models are also incorporated to enhance returns.
The portfolio managers work with the research team to select top-rated securities that both meet the client’s asset allocation requirement and risk profile. Stocks are constantly ranked based on a decile ranking system through the 32 Anchor quantitative models. Risk Management and Alpha/Beta Analysis are conducted to ensure that the portfolio is correctly constructed to produce optimized, risk-adjusted returns. The portfolio managers seek to reduce the risk inherent in the equity holdings by diversifying based on Market Capitalization, Geographic, Sector, Industry and Individual Security concentration. Furthermore, they eliminate any restricted investments from the security holdings. Once the portfolio is constructed, the team constantly monitors and adjusts the holdings based on the diversification metrics and security ranking system.
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