Throughout the month of April, AdvisorOne will focus on separately managed accounts: the money manager options advisors have, the platforms through which they can gain access to those managers, how they can conduct due diligence on those managers, and how advisors are using SMAs in client portfolios.
We begin our coverage by presenting the Investment Advisor-Prima Capital seventh annual Separately Managed Account Managers of the Year. In a feature article in the April 2011 issue of Investment Advisor, seven managers in six different asset classes were chosen as "A Class Apart."
(See the complete calendar of our Special Report for past and upcoming coverage.)
In this article, we focus on Denver-based Denver Investment Advisors Concentrated Mid-Cap Growth Strategy, winners in the mid-cap equity space.
The philosophy: Equity prices reflect expectations for earnings and cash flow, and that consistently anticipating changes in expectations is the key to achieving the strategy’s goal of long-term outperformance.
The portfolio: A focus on the ‘best ideas’ of Denver’s mid-cap growth team, using quantitative screening and independent fundamental research to invest in the 25-30 mid- and smid-cap growth companies in which the team has the highest conviction. Target is to include less than 5% of portfolio in cash.
The performance: 2010 performance (company supplied).
Strategy return (gross): 32.12%
Strategy return (net): 31.09%
Russell Midcap Growth Index: 26.38%
S&P 500: 15.06%
Total AUM (12/31/10): $9.005 billion (See firm’s Form ADV.)
The people: Investment Advisor Editor John Sullivan spoke in March with Mitch Begun, CFA, partner co-director of Mid-Cap Growth Research, and portfolio manager. Team members include William Chester, CFA, also a partner, co-director of Mid-Cap Growth Research and portfolio manager