TorrayResolute Small/Mid Cap Growth Strategy
Our Investment Approach
Our approach is based on the belief that selective investments in diverse growth businesses with superior operating and financial characteristics have the potential to generate excess returns with below-market risk over time. We believe risk is systematically mispriced and analysis targeting low-risk equities can improve the probability of outperformance.
Our edge is a repeatable process that we believe is a better "bet" than a claim of information advantage or intuition. This process identifies the systematic mispricing of risk present through full market cycles.
Business Characteristics We Favor
- Durable competitive advantages
- High returns on, and efficient use of, capital
- Demonstrated low volatility in financial and operating metrics
- Low exposure to cyclical trends
- Capital allocation discipline
We manage risk as a key component of our portfolio construction. We target low correlation among individual holdings and the portfolio; sector and position limits as well as loss limits are applied.
Portfolio Construction & Risk Management
We maintain a model to drive our asset allocation. Portfolios are fully invested and are composed of a diversified set of 25-30 small and mid-cap stocks exhibiting the best risk/return outlook.
Positions are reduced or sold if:
- Valuations are excessive
- Sector or position limits are exceeded
- Business volatility increases
- Superior investments are identified
- Original investment thesis fails