The Philosophy
A concentrated, high-conviction, US equity approach which typically holds 20 to 40 securities. The strategy seeks a targeted return by investing in companies with at least one of three attributes:
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A concentrated, high-conviction, US equity approach which typically holds 20 to 40 securities. The strategy seeks a targeted return by investing in companies with at least one of three attributes:
Diversifying between these three sources of potential upside improves the team’s chances of performing well throughout the market cycle.
The companies in the fund are chosen as a result of the team’s own bottom-up fundamental research. Stock picks are partly driven by analysing capital flows in each industry to understand which companies in a particular industry are likely to out-perform their competitors.
The team buys companies it believes can deliver significant returns in a three-year cycle, rather than beating a specific benchmark.
To supplement the team’s fundamental analysis of each stock, they identify the underlying factors driving the success and failure of each company and also apply a macroeconomic risk overlay. The team analyses this at a total portfolio level to mitigate unintended lack of diversification and overexposure to single drivers of risk or return, going far beyond simplistic industry sector analysis.
What will never change in our strategy is our disciplined approach to generating attractive returns on capital from idiosyncratic drivers. Every stock we add to the portfolio always aims to simultaneously enhance returns and reduce risk.”– Scott Weber, Lead Senior Portfolio Manager, Vaughan Nelson Investment Management
The analyses and opinions referenced herein represent the subjective views of the author(s) as referenced, are as of the date shown and are subject to change without prior notice.
All investing involves risk, including the risk of loss. Investment risk exists with equity, fixed income and alternative investments. There is no assurance than any investment will meet its performance objectives or that losses will be avoided. There could be other differences across similar products in the same strategy. Investors should fully understand the risks and other relevant details associated with any investment prior to investing.
Vaughan Nelson manages high-conviction, high active share portfolios – all of which follow the same value-oriented investment approach and belief that temporary inefficiencies and time arbitrage create long-term opportunities. The firm manages equity strategies across market capitalizations and domestic fixed income – offered in a variety of investment types, including mutual funds, ETFs, separately managed accounts, and collective trusts.
*As of June 30, 2025