|
Chicago Equity Partners integrates both equity and fixed-income investment management along with strategic asset allocation for a holistic approach to a balanced portfolio.
Equity Team
A quantitative strategy ensures repeatability of the equity investing process. Research focuses on identifying factors that are indicative of future relative out-performance.
Equity Investment Process Chart
Ideal Equity Investment
The ideal equity investment for the Managers AMG Chicago Equity Partners Balanced Fund is derived from two quantitative models:
- A stock alpha model that predicts alphas from a universe of more than 3000 stocks based on valuation, quality, momentum and growth and
- A risk model that optimizes the portfolio.
Every day these proprietary models are used to evaluate the expectations, valuation and quality attributes of stocks and forecast those that have the highest potential to outperform.
Quantitative analysts conduct research to ensure the investment process and factors continue to add value.
The performance of the models is monitored using a variety of metrics to evaluate their ability to discriminate high performing stocks from low performing ones.
Ongoing research looks for ways to improve the models.
Portfolio Construction
In constructing the Managers AMG Chicago Equity Partners Balanced Fund portfolio:
- Analysts and Portfolio Managers review and confirm the models daily rankings
- Each analyst follows a specific sector focusing on any factors the models may not capture
- Once the team has identified stocks with the highest potential, they construct portfolios that neutralize risk elements that are not consistently rewarded such as style tilts, industry weightings and market capitalization. A proprietary risk model balances exposure to these risks
Sell Discipline
The sell discipline for the Managers AMG Chicago Equity Partners Balanced Fund reflects the buy discipline:
- If a stock has a low alpha and it has a viable alternative, the team will sell it
Analysts review the portfolios daily and meet periodically to evaluate portfolios and to rebalance as necessary.
Fixed-Income Team
A risk-controlled, low-volatility process designed to increase the odds of producing excess return while maintaining a similar level of risk as the benchmark. Bonds are screened for characteristics that drive fixed-income performance. Qualitative overlay incorporates the opinions of fundamental analysts and provides a check to the quantitative process.
Fixed-Income Investment Process
Ideal Fixed-Income Investment
The ideal equity investment for the Managers AMG Chicago Equity Partners Balanced Fund exhibits the following traits:
- Falls within core competencies
- High research ranking based on sound fundamentals
- Offers yield curve position
- Provides good liquidity
- Stable or improving fundamentals (for corporate bonds)
Portfolio Construction
In constructing the Managers AMG Chicago Equity Partners Balanced Fund portfolio fund management:
- Seeks to achieve excess return in two primary ways — sector allocation and security selection.
- Determines sector weightings by the relative attractiveness of corporates, mortgages, agencies and Treasuries using fundamental and valuation analysis
- Capitalizes on the historical return advantage offered by the high-quality non-Treasury sectors of the bond market
- Analyzes bonds within their peer group and chooses the most favorable issuers from a risk/return standpoint
Sell Discipline
The investment team may make a sell decision for the Managers AMG Chicago Equity Partners Balanced Fund when a security:
- Deteriorates in research ranking due to change in fundamentals or business strategy
- Is reevaluated because facts surrounding original purchase come into question
- Meets price target or another security offers higher total return opportunity
- Experiences an unexplained drop in bond or stock price
- Is downgraded by rating agency
Disclosure Investors should carefully consider the fund's investment objectives, risks, charges, and expenses before investing. For this and other information, please call 800.835.3879 or download a free prospectus. Read it carefully before investing or sending money.
The performance shown represents past performance and is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. From time to time the advisor has waived fees or reimbursed expenses, which may have resulted in higher returns. The listed returns and yields on the Fund are net of expenses and the returns and yields on the indices exclude expenses. Current performance of the Fund may be lower or higher than the performance quoted.
There is no guarantee that these investment strategies will work under all market conditions, and each investor should evaluate their ability to invest for a long-term, especially during periods of downturns in the market.
The investment return and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
|
