Growth Equity

Our benchmark for this strategy is the Russell 1000 Growth Index and our performance objectives, emphasizing 3 year time horizons, are to outperform this index by 2% annually with meaningfully lower risk and to be in the top quartile of the universe of other growth managers. Len Mitchell is the lead portfolio manager and is supported by our team of 4 analysts. Len makes all final decisions for the growth portfolio.

Stock research is driven by our quantitative model that is comprised of 16 factors which separate into 5 conceptual categories – Valuation (22%), Business Momentum (11%), Growth Validation (41%), Investor Sentiment (10%) and Management IQ (16%). The majority of companies that we own combine a strong business franchise, excellent management and a sustainable competitive advantage.


Growth stocks are often expected to do a better job of maintaining their earnings even in periods of economic downturn. However, the risks in growth investing come from overvaluation due to overly optimistic growth projections. In market declines, these higher multiple companies generally contract the most – higher ladders have farther to fall. We tend not to own companies that are forecasted to have the fastest earnings growth rates for several reasons; (1) these companies are typically priced at multiples of earnings that violate our valuation objectives, (2) extremely profitable businesses invite high levels of competition which lead to shorter product cycles and weaker franchises, and (3) high growth companies are prone to disappoint. While we recognize our approach may underperform when the market is booming and investors’ appetite for increased levels of risk is rising, our emphasis on conservative growth stock investing generates a more consistent return pattern over time.


Our Growth portfolio generally hold stocks in 45 to 60 companies and our turnover has been approximately 50% per year, which is somewhat below average relative to other growth managers. Like our Value strategy, the Growth portfolio has a large cap U.S. equity benchmark; however, we operate with flexibility within our areas of expertise and will own up to 20% in non-U.S. companies and will also own companies with smaller capitalization sizes.