Small Cap Equity

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Small Cap Equity

SMALL-CAP DIVERSIFIED EQUITY

INVESTMENT OBJECTIVE
To construct a sector diversified portfolio of 361 Capital’s best picks of U.S. companies from our small cap investment universe. To achieve greater than 250 bps over the appropriate benchmark while effectively managing risk through a diversified portfolio of alpha producing stocks.

INVESTMENT PROCESS
Our objective is to identify securities through behavioral valuation techniques unique to 361 Capital that we expect to provide attractive risk adjusted returns. It is our goal to predict and capture alpha based upon favorable earnings announcements or upward earnings revisions.

INVESTMENT TEAM
We have an experienced investment team with over 96 years combined experience utilizing proprietary techniques to identify attractive securities, to maximize alpha capture and a disciplined and methodical selling process that keeps the portfolio with what we believe to be the best opportunities for return.

Excess return and Tracking Error objectives:   Relative to the targeted benchmark over a 3-5 year period.  This time horizon is relevant given that this investment process cannot eliminate the possibility of random events driving short-term performance.

© 2016 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. There is no guarantee that this or any investment strategy will succeed; the strategy is not an indicator of future performance; and investment results may vary. The Morningstar Rating for separate accounts, commonly called the star rating, is a measure of a separate account’s risk-adjusted return, relative to other separate accounts in the same Morningstar Category. Separate accounts are rated from 1 to 5 stars, with the best performers receiving 5 stars and the worst performers receiving 1 star. Separate accounts are rated for up to three periods (three, five, and 10 years), and ratings are recalculated each quarter. The Morningstar Rating for separate accounts uses an enhanced risk-adjusted return measure, which accounts for all variations in a separate account’s monthly performance, with more emphasis on downward variation. Separate accounts are ranked against others in the same category and stars are assigned as follows: Top 10% 5 stars, Next 22.5% 4 stars, Middle 35% 3 stars, Next 22.5% 2 stars, Bottom 10% 1 star.

Notes: Morningstar’s calculation of total return is determined each month by taking the change in monthly net asset value, reinvesting all income and capital-gains distributions during that month, and dividing by the starting NAV. Reinvestments are made using the actual reinvestment NAV, and daily payoffs are reinvested monthly. Unless otherwise noted, Morningstar does not adjust total returns for sales charges (such as front-end loads, deferred loads and redemption fees), preferring to give a clearer picture of a fund’s performance. The total returns do account for management, administrative, 12b-1 fees and other costs taken out of fund assets. Total returns for periods longer than one year are expressed in terms of compounded average annual returns (also known as geometric total returns), affording a more meaningful picture of fund performance than non-annualized figures.

The Morningstar Rating uses an enhanced risk-adjusted return measure based on “expected utility theory,” which accounts for all variations in a separate account’s monthly performance, with more emphasis on downward variation. Morningstar will not calculate ratings for categories or time periods that contain fewer than five separate accounts. Each investor in the same separate account can experience slightly different total returns, because investors have different account preferences and restrictions. Therefore, all separate account performance data is reported to Morningstar as a “composite” of similarly managed portfolios. Separate accounts that do not have ratings can be divided into two groups: those that do not qualify to be rated and those that did not participate. A separate account will not get a Morningstar Rating if: It is less than three years old, the firm is not GIPS-compliant, the category contains fewer than five separate accounts that are eligible for a rating.

 

  • Sources of Return

    "Our process attempts to add alpha through stock selection, rather than sector “bets” against the benchmark. Thus, we have established a target number of positions for each of the sectors included in our universe."