The Growth universe contains ~75 publicly traded U.S. companies. The strategy holds 20 to 30 of the companies within the universe at any given time. With a focus on growth, it should be no surprise that most names fall into the higher growth segments of the market such as technology (software), healthcare (medical devices) and consumer discretionary (luxury brands). The Growth strategy targets ~100% invested capital regardless of market conditions. Risk is managed through position sizing, not through holding cash or hedging.

Companies usually enter the portfolio as "Acorns" and as they mature, if we are correct, they will compound and become our larger allocations, or "Oaks". When Oaks are fully valued, they are sold into strength, harvesting the proceeds to fund new positions, or Acorns. Acorns begin as small allocations and grow as the company executes and meets KPIs and we gain further comfort while completing due diligence. Volatility is expected in these names as they are mostly small/mid-cap and can be illiquid. We often look to take advantage of this illiquidity and use weakness to increase position sizes. WE are always looking to buy on price weakness that seems disconnected from fundamental reality.

Somewhere in the middle of Acorns/Oaks are the "Saplings", which make up the majority of the portfolio. Many of the Sapling positions have long holding periods and have matured from Acorns. Saplings have largely eliminated the early business execution risks and have proven their model successful and that they have longevity and growth ahead. Top and bottom line growth remain very attractive relative to the peers and the broader market, unlike Oaks who often display the slower growth qualities of many mature companies within the Core universe. Saplings may also become Oaks when price outpaces fundamental performance, as we will no longer be a buyer of weakness. If we think the market has priced our company to perfection and there are more downside risks than upside from a valuation perspective, we will become a seller on strength and wait for better opportunities.

Below, the companies in green reflect an upgrade in the last 12 months. Grey are new additions to the universe within the last 12 months and red means the company has been downgraded in the last 12 months.