Portfolio Strategy

The Arcataur Large Capitalization Equity Portfolio invests in high-quality companies that have sustainable growth without overlooking risk. Most companies will have market capitalization in excess of $2 billion. Research fundamentals are emphasized starting in a top-down approach. Financial and operating quality is then considered to provide a greater margin of safety and stability to the portfolio. Valuation is always a factor to avoid overpaying for growth stocks. Technical analysis is utilized for timing decisions and taking advantage of trading opportunities. Our strategy for the Arcataur Large Capitalization Equity Portfolio is on maximizing expected return through constructing diverse portfolios covering most major industry sectors.

Our equity investment process begins with a macroeconomic analysis, including a focus on all industries and sectors, looking to emphasize the ones that may benefit from the current economic environment. We then perform fundamental equity analysis, emphasizing the competitive positions of companies within their industries. We focus on leaders or emerging leaders in these industries to lever the portfolio for out-performance versus broad market benchmarks. Strong market share, strong financial position, unique products or services, low-cost operations, significant free cash flow and appropriate stock valuations are critical variables we look for in our companies. Technical analysis also may be utilized for timing decisions and taking advantage of trading opportunities.

Our strategy then looks at ways to maximize expected return through constructing diverse portfolios covering most major industry sectors utilizing the "45/15" principle. On average, this portfolio could hold 45 stocks; however, the largest 15 could account for as much as 45% of the portfolio's market value.