Philosophy and Process

The Conservative Equity Strategy seeks to invest in high quality, large capitalization companies with established operations and a preference for paying dividends. The portfolio is managed with a long-term investment horizon seeking to keep portfolio turnover and trading costs low.
The strategy uses a relative value methodology, looking for attractive returns on invested capital and stability of sales, earnings and cash flows. The strategy strives to moderate portfolio volatility by owning companies with strong fundamentals relative to competitors, specifically those in sectors most likely to outperform in a given macroeconomic environment.

Conservative Equity Strategy: Portfolio Composition

• Each separate account consists of 40-50 individual securities to reduce portfolio volatility.
• Securities are purchased at an initial 2% weight with no more than 4% invested in any single issue.
  
• We are aware of benchmark sector weights but do not let it influence our construction, as we believe it is risky to hold neutral weights in relatively overvalued sectors.

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