Large Cap Growth StrategyMid Cap Growth StrategyDeveloped ex U.S. Strategy


Portfolio Inception Date:
March, 2002

Lead Portfolio Manager
Degas A. Wright, CFA

Large Cap Growth Strategy

DCM’s Large Cap Growth portfolio consists of 40–60 stocks with market capitalizations greater than $5 billion. The top ten positions, by weight, will range between 30-45% of the portfolio.

As a policy limit, the cash position will not exceed 5%.

Performance Benchmark

The Russell 1000 Growth index is the primary performance benchmark.

Investment Objectives

The portfolio’s (net of fees) return is expected to exceed the Russell 1000 Growth Index over a full market cycle, which we define as a rolling five-year period.

Investment Philosophy & Process

The essence of the Large Cap Growth philosophy and process is to find companies whose earnings and EPS are accelerating. The investment philosophy is earnings-centric, with an emphasis on positive EPS estimate revisions, accelerating EPS momentum, and consistent EPS surprises. As we search for companies with accelerating earnings momentum, we believe that EPS estimate revisions and EPS surprises (relative to consensus estimates) are among the most unbiased “signaling devices” in equity markets, The empirical and academic evidence clearly validates the thesis that the best performing stocks are those with superior earnings momentum, and our analytical approach allows us to identify the best earnings growth stories in the large cap universe.

Subsequently, our sector leaders perform rigorous analysis of financial statements, with a primary focus on the balance sheet and cash flow statement. This careful analysis attempts to gauge whether the company possesses a reasonable debt/capitalization profile, an efficient working capital management strategy, improving cash-on-cash returns, and a rational cash flow utilization. We also stress-test the strength of debt coverage ratios and analyze debt repayment schedules to avoid refinancing crunches and liquidity mismatches. Finally, we check for accounting integrity by cross-checking operating CFs with reported EPS to ascertain whether accounting earnings are consistent with cash generation.

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Portfolio Inception Date
June 2012

Lead Portfolio Manager
Shayne M. John, CMA,CFM

Mid Cap Growth Strategy

DCM’s Mid Cap Growth portfolio consists of 40–60 midcap stocks with market capitalizations ranging from $1 billion–$20 billion. The top ten positions, by weight, will range between 30–45% of the portfolio.

As a policy limit, the cash position will not exceed 5%.

Performance Benchmark

The Russell Mid Cap Growth index is the primary performance benchmark.

Investment Objectives

The portfolio’s (net of fees) return is expected to exceed the Russell Mid Cap Growth Index over a full market cycle, which we define as a rolling five-year period.

Investment Philosophy & Process

The essence of the Mid Cap Growth philosophy and process is to find companies whose earnings and EPS are accelerating. The investment philosophy is earnings-centric, with an emphasis on positive EPS estimate revisions, accelerating EPS momentum, and consistent EPS surprises. As we search for companies with accelerating earnings momentum, we believe that EPS estimate revisions and EPS surprises (relative to consensus estimates) are among the most unbiased “signaling devices” in equity markets. The empirical and academic evidence clearly validates the thesis that the best performing stocks are those with superior earnings momentum, and our analytical approach allows us to identify the best earnings growth stories in the mid cap universe.

Subsequently, our sector leaders perform rigorous analysis of financial statements, with a primary focus on the balance sheet and cash flow statement. This careful analysis attempts to gauge whether the company possesses a reasonable debt/capitalization profile, an efficient working capital management strategy, improving cash-on-cash returns, and a rational cash flow utilization. We also stress-test the strength of debt coverage ratios and analyze debt repayment schedules to avoid refinancing crunches and liquidity mismatches. Finally, we check for accounting integrity by cross-checking operating CFs with reported EPS to ascertain whether accounting earnings are consistent with cash generation.

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July 2017
June 2017
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
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Portfolio Inception Date
October 2017

Lead Portfolio Manager
Degas A. Wright, CFA

Developed ex U.S.

DCM’s Developed Markets excluding the U.S. portfolio consists of 40–70 stocks with market capitalizations greater than $5 billion. The investment universe includes over 1000 firms located in the 22 developed markets of Europe, Australia, Far East and Canada.

As a policy limit, the cash position will not exceed 5%.

Performance Benchmark

The MSCI EAFE + Canada Index is the primary performance benchmark.

Investment Objectives

The portfolio’s (net of fees) return is expected to exceed the MSCI EAFE + Canada Index over a full market cycle, which we define as a rolling five-year period.

Investment Philosophy & Process

The fundamental investment philosophy rests on the belief that the behavioral biases of the capital markets participants cause stock market prices to not rationally reflect all new information; therefore, market anomalies, or inefficiencies, will occur. To exploit these anomalies, DCM has developed quantitative and qualitative processes that use a set of fundamental and market variables to provide alpha forecasts for each stock in the universe. DCM combines these forecasts into a portfolio construction process that is designed to maximize the selection of high-alpha stocks, while minimizing the risk of the portfolio relative to the benchmark. As a first step in this bottom-up process, all of the stocks in the universe are ranked based on alpha estimates generated by multi-factor models that have been developed to exploit alpha-generating opportunities created by behavioral biases in four distinct regions of the developed markets.

The four regions are Japan, United Kingdom (UK) / Canada, Europe, and Pacific Asia. To develop these factor models, academic literature and in-house econometric research is utilized.

Prior to a stock entering the portfolio, all stocks are reviewed for news items, and analysts’ reports. Additionally, the model has a proprietary quality of earnings measure, based on accounting metrics that have been well established in the academic and practitioner literature.

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