Simplify your Allocation

September 2023

A single global equity portfolio may be all the exposure you need

30 years ago, equities were a complicated asset class, but today, there is a much wider opportunity set of more complex and illiquid alternatives. In that case, simplifying your equity allocation to a single global portfolio could free up firm resources to focus on the wider opportunity set of investments.

What to look for in a portfolio manager: Conviction

Strategies with fewer holdings typically take higher active bets per holding, meaning a good stock picker with a portfolio concentrated in high conviction names can outperform the market. The greater the number of holdings in a portfolio, the more likely it is to perform similarly to the benchmark index.

*All regionally unconstrained eVestment listed equity products that primarily invest in large capitalization stocks regardless of the style (growth, value, or core) focus.

What to look for in a portfolio manager: Breadth of investment

The famous Fundamental Law of Active Management states very simply that a manager’s performance is a product of their skill and the number of stocks they consider for investment, squared. One important lesson from the law is that, theoretically, every manager can improve their performance by increasing the number of stocks in their investment universe.

Why Invest

Global Select Dividend "GSD" is a concentrated, low-turnover, high active share equity strategy. GSD seeks to offer current income and income growth, as well as capital appreciation with less risk than the broader equity market by investing in companies with the following characteristics:

Blue Chip: Focus on high-quality, defensive companies with ample cash flows and consistent above-average levels of return on investment

Capital Discipline: Target capital disciplined companies with ability to sustain and grow dividends

Attractive Valuations: Seek capital appreciation potential by investing in companies trading at 
a discount to intrinsic value

• Inception Date: 12/31/2010
• Accessibility: SMA
  
• Minimum Investment: $250,000
• Number of Holdings: 25-35

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Disclosures

Citation:
Richard C. Grinold, Ronald N. Kahn Active Portfolio Management (2nd ed.), McGraw-Hill, New York (2000)

*Past performance does not guarantee future results.  Investing in securities involves risk, including the possibility of the loss of principal. Please see Advisory Research’s Form ADV Part II, which is available upon request, for more information. Data is presented in USD. Unless otherwise noted, periods over one year are annualized. Sources: Bloomberg, eVestment as of 9/30/23.

Important Information

eVestment Alliance (EA) provides third party databases, including the institutional investment database from which the presented information was extracted. The EA institutional investment database consists of thousands of active institutional managers, investment consultants, plan sponsors, and other similar financial institutions actively reporting on over 10,000 products

Past performance does not guarantee future results.  Investing in securities involves risk, including the possibility of the loss of principal.

Please see Advisory Research’s Form ADV Part II, which is available upon request, for more information.

Advisory Research is providing this material for informational purposes only.  The information provided is not intended to recommend any company or investment described herein, and is not an offer or sale of any security or investment product or investment advice.  Before making any investment decision, you should seek expert, professional advice and obtain information regarding the legal, fiscal, regulatory and foreign currency requirements for any investment according to the laws of your home country or place of residence.

Certain information contained herein constitutes forward looking statements, projections and statements of opinion (including statements of financial market trends). Such information can typically be identified by the use of terminology such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, “continue” or “believe” or comparable terminology. All projections, opinions and forward looking statements are based on information available to Advisory Research as of the date of this presentation, and Advisory Research’s current views and opinions, all of which are subject to change without notice. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in forward looking statements. Additionally, information and views presented herein may be drawn from third-party or public sources which are believed, but not guaranteed, to be reliable and which have not been verified for accuracy or completeness.

Advisory Research’s strategies are actively managed and not intended to replicate the performance of any cited index:  the performance and volatility of Advisory Research’s investment strategies may differ materially from the performance and volatility of a cited index, and their holdings will differ significantly from the securities that comprise the index.  You cannot invest directly in an index, which does not take into account trading commissions and costs.

Advisory Research is an investment adviser in Chicago, IL. Advisory Research is registered with the Securities and Exchange Commission (SEC).  Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Advisory Research only transacts business in states in which it is properly registered or is excluded or exempted from registration.  A copy of Advisory Research’s current written disclosure brochure filed with the SEC which discusses among other things, Advisory Research’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov