Long-term growth of capital and future income rather than current income.
The Fund seeks to achieve its investment objectives by investing at least 80% of its net assets under normal circumstances in common and preferred stocks and other types of equity securities. The Fund invests primarily in a limited number of large- and medium-sized companies (meaning companies with a market capitalization of $1 billion or more) that the portfolio manager believes have above-average growth histories and/or growth potential. The portfolio manager selects equity securities from a number of industries based on the merits of individual companies. In seeking to satisfy the Fund’s investment objective with respect to future income, the portfolio manager will also consider companies that have the potential to pay dividends in the future. Stock selection is key to the performance of the Fund.
The portfolio manager seeks to identify securities of companies with characteristics such as:
- Above-average annual growth rates
- Financial strength (favorable debt ratios and other financial characteristics)
- Leadership in their respective industries
- High quality management focused on generating shareholder value
The Fund also may invest to a lesser extent in foreign (non-U.S.) securities and debt securities. The portfolio manager may use various investment techniques (which may involve the use of derivative instruments such as swaps, options, futures and options on futures) to adjust the Fund’s investment exposure, but there is no guarantee that these techniques will work.
We believe in companies that can grow earnings at a double-digit rate for the foreseeable future — a rate 50–100% greater than the overall market.
- Great business prospects
- Market leadership - #1-2 market share
- Visible growth outlook
- Strong Financials
- Predictable earnings
- Recurring revenues
- High margins and high return on investment
- Generation of free cash flow
- Superior Management
- Track record of success — proven ability to reinvest
- Common goal with shareholders — high equity ownership
The team employs a fundamental, bottom-up, research-driven investment approach, resulting in a process that is both disciplined and repeatable. Starting with a universe of approximately 300 names, the Growth team monitors and researches each company on a regular basis, assessing several earnings and valuation metrics with the objective to identify those with the highest quality and potential for growth at a reasonable price. The team has a long-term investment horizon and tends to hold a stock until either its growth prospects diminish or it has become overvalued. The final 30-40 names held in the strategy are those that represent our greatest expectations for growth at a reasonable price. Sector allocation is a fallout of the stock selection process, but is monitored as part of the portfolio risk control process.
1The investment process is fluid and may change from time to time without prior public notice as market conditions and portfolio managers change.
