Meritage Portfolio Management Introduces Small-Cap Equity Strategies

Overland Park investment manager rolls out a highly rated small cap equity strategy for institutional and high net worth investors.

Morningstar, Inc. Overall 5-Star Rating Badge

After several years of managing two small cap equity strategies using internal corporate funds, Meritage is opening up these strategies to institutional and larger private client opportunities.  The offering includes Small Cap Value and Small Cap Growth.

The Meritage Small Cap Value strategy has received a 5-Star Overall Morningstar Rating ™ out of 121 Small Value portfolios for the period ending June 30, 2018.  The Small Cap Growth strategy is currently under review by Morningstar.

The Meritage Small Cap Equity strategies were established in December 2008, capitalizing on the firm’s conviction in quantitative methodologies to drive security selection.  “Applying our value-centric process to the small cap universe of stocks was always an attractive opportunity for us.  The long-term track record gives us a very credible foundation to compete in the institutional small cap marketplace, as well as being an appealing option for select individual investors,” explained Meritage CIO, Mark Eveans, CFA.

At the heart of the investment approach is a multi-factor ranking process which identifies the most attractive investment candidates based on specific measures of earnings growth, valuation, cash-flow return on investment, sentiment, momentum, and capital efficiency.  A qualitative overlay assures that decisions are not fully automated.  The strategies are designed to generate excess return over the respective Russell 2000 Value and Growth indices.

Senior Portfolio Managers and Principals, Sharon Divine, CFA, and Len Mitchell, CFA, are the lead managers on the Small Cap Value and Small Cap Growth strategies, respectively.   Sharon has over 29 years investment experience and leads the firm’s quantitative research.  Len has over 35 years investment experience and leads the firm’s Growth Equity management.

As separately managed strategies holding individual securities, the minimum investment for each style is $1 million.  “These strategies are appropriate for institutional pools where there is a specific mandate for small cap equity exposure and for larger private client opportunities or where assets are spread between different investment managers”, added Ryan Chiaverini, CFA, Client Portfolio Manager.  “After years of utilizing these strategies for our own invested capital, we are excited to offer these strategies to qualified investors.”

About Meritage Portfolio Management

Meritage Portfolio Management is an institutionally based investment management firm, providing asset management for individuals, families, foundations, endowments, corporations and qualified retirement plans. The firm manages $1.7 billion in assets for local, regional, and national clients from its base in Overland Park, Kansas. Meritage employs a highly systematic investment process in the selection of securities for multiple equity strategies. More information can be found online at www.meritageportfolio.com.

Meritage Portfolio Management claims compliance with the Global Investment Performance Standards (GIPS). To obtain a list of Meritage composite descriptions and/or a presentation that complies with the GIPS standards, please call phone: 913-345-7000 or email: welcome@meritageportfolio.com. 

How to Invest

For more information about how to invest in the Small Cap Equity strategies, please contact Ryan Chiaverini, CFA, CPA by e-mail: rchiaverini@meritageportfolio.com or call ph. 913-345-7000.

Disclosures

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The Morningstar RatingTM for funds, or “star rating”, is calculated for separate accounts with at least a three-year history. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.