Aristotle Credit Partners
Short Duration High Yield Bond

Strategy Overview

The Short Duration High Yield Bond strategy seeks to achieve strong risk-adjusted returns relative to the benchmark through a combination of high current income and capital appreciation.

  • The combination of top-down and bottom-up analysis leads to the most comprehensive perspective on the corporate credit market.
  • The integration of ESG factors into our analysis enhances our credit selection process.
  • Disciplined risk management is a critical component of investing in corporate credits and should be carried out at both the security and portfolio level.

 

Investment process includes the following tenets:

  • Focus on Quality: We seek credits with strong fundamentals, ample cash flow, solid capital structures and low default risk.
  • In-Depth Research: Our process blends economic and market analysis with industry and credit research.
  • ESG Considerations: ESG factors are incorporated into our bottom-up, research process, with an emphasis on corporate governance.

Strategy Inception Date : April 1, 2014

Benchmark: ICE BofA 1-3 Year BB-B U.S. Cash Pay Fixed Maturity High Yield Constrained Index

Portfolio Minimum Average Quality: B2

Cash: Maximum 5%

Minimum Security Rating: B/CCC

Minimum Issue Size: $150M Original Issuance

Issuer Max: BB: 4%; B: 3%; B/CCC: 2%

Maximum Issue Holding: 10% of Original Issuance

Maximum Allocation to Split B/CCC: 5%

Maximum Industry Allocation: 30%

Duration: +/- 25% of Index

Maturity Constraints: Maximum 4-year final maturity

Investment Grade Securities: Up to 25%

As of: 12/31/2023

Performance

Trailing (%) QTD YTD 1 Yr 3 Yrs 5 Yrs Since Inception1
SDHY Composite (Pure Gross) 4.30 8.51 8.51 3.07 4.48 3.65
SDHY Composite (Net) 4.16 7.92 7.92 2.51 3.91 3.19
Benchmark2 3.96 10.34 10.34 3.90 4.54 4.23
Calendar Year (%) 2023 2022 2021 2020 2019 2018 2017
SDHY Composite (Pure Gross) 8.51 -3.20 4.25 4.06 9.28 0.79 4.00
SDHY Composite (Net) 7.92 -3.74 3.68 3.49 8.68 0.24 3.54
Benchmark2 10.34 -2.52 4.27 2.40 8.72 2.23 4.84
1The Aristotle Short Duration High Yield Bond Strategy has an inception date of April 1, 2014.
2Benchmark represents the ICE BofA 1-3 Year BB-B U.S. Cash Pay Fixed Maturity High Yield Constrained Index.
Past performance is not indicative of future results. Performance results for periods greater than one year have been annualized. Returns are preliminary pending final account reconciliation. Composite and benchmark returns reflect the reinvestment of income. Pure Gross: Pure gross returns do not reflect the deduction of any trading costs, fees or expenses. Pure gross returns prior to September 2017 reflect the deduction of transaction costs. Model Net Performance: Starting from September 2017, composite returns are presented pure gross and net of the highest wrap fee stated. Performance for periods prior to September 2017 are presented pure gross and net of actual investment advisory fees. The Portfolio Data shown are based on a representative account. This material is not financial advice or an offer to buy or sell any product. Please see important disclosures at the end of this document.

Portfolio Data

  SDHY Benchmark2
Number of Issues 75 302
Effective Yield (%) 6.08 6.78
Effective Duration (Yrs) 1.45 1.44
Maturity (Avg., Yrs) 2.16 2.09
Coupon (Avg., %) 5.46 5.95
Price (Avg., $) 98.48 97.64
Average Credit Rating BB- B+
Turnover (1 Yr, %) 21.5

Allocation by Credit Rating (%)

  SDHY Benchmark2
AAA
AA
A
BBB 12.7
BB 55.5 50.2
B 27.7 47.7
CCC or Lower 1.6 2.1
Not Rated
Cash 2.5
Total 100.0 100.0

Top 10 Holdings (%)

Security Coupon Maturity Weight
Navient Corp 5.875% 10/25/24 2.5
Teva Pharmaceutical Finance Netherlands III BV 3.150% 10/01/26 2.5
Service Properties Trust 4.500% 03/15/25 2.5
DPL Inc 4.125% 07/01/25 2.4
United Airlines Holdings Inc 4.875% 01/15/25 2.4
TRI Pointe Group Inc 5.875% 06/15/24 2.1
Global Partners LP 7.000% 08/01/27 2.1
RHP Hotel Properties LP 4.750% 10/15/27 2.1
American Axle & Manufacturing Inc 6.500% 04/01/27 2.1
OneMain Finance Corp 7.125% 03/15/26 2.0
Total 22.7

Contribution to Duration (%)

Top 5 Overweights by Industry (%)

Industry SDHY Benchmark2
Retailers & Restaurants 12.0 5.2
Building Materials & Home Construction 5.9 0.9
Lodging & Leisure 9.1 4.5
Pipelines & Distributors 10.4 7.8
Brokerage & Asset Management 2.6 0.3

Top 5 Underweights by Industry (%)

Industry SDHY Benchmark2
Technology 1.2 6.1
Media Entertainment 0.0 3.2
Transportation 2.4 5.2
Gaming 4.0 6.6
Industrial Other 2.9 5.2

2Benchmark represents the ICE BofA 1-3 Year BB-B U.S. Cash Pay Fixed Maturity High Yield Constrained Index.
All investments carry a certain degree of risk, including the possible loss of principal. Investments are also subject to political, market, currency and regulatory risks or economic developments. There are risks specifically associated with fixed income investments such as interest rate risk and credit risk. Bond values fluctuate in price in response to market conditions. Typically, when interest rates rise, there is a corresponding decline in bond values. This risk may be more pronounced for bonds with longer-term maturities. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. High yield securities are generally rated lower than investment grade securities and may be subject to greater market fluctuations, increased price volatility, risk of issuer default, less liquidity, or loss of income and principal compared to investment grade securities. The material is provided for informational and/or educational purposes only and is not intended to be and should not be construed as investment, legal or tax advice and/or a legal opinion. Investors should consult their financial and tax adviser before making investments. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Information and data presented has been developed internally and/or obtained from sources believed to be reliable. Aristotle Credit does not guarantee the accuracy, adequacy or completeness of such information. The Aristotle Short Duration High Yield Bond Composite (the Composite) includes all discretionary accounts managed in this strategy. The objective of the Aristotle Short Duration High Yield Bond strategy is to optimize long-term returns with a focus on mitigating market risk. The strategy is benchmarked to the ICE BofA 1-3 Year BB-B U.S. Cash Pay Fixed Maturity High Yield Constrained Index. The accounts in the Composite consist of all separately managed fee-paying discretionary portfolios invested mainly in short duration high yield bonds. The Composite will include only accounts that do not utilize leverage, do not have significant tax treatment or cash flow needs and may not invest in 144A bonds. The accounts will likely contain a limited number of positions (roughly 40 to 60 securities), with investments focused on the most liquid securities. A list of composite descriptions is available upon request. Past performance is not indicative of future results. The Portfolio Data, Allocation by Credit Rating, Top 5 Overweights and Underweights by Industry, Top 10 Holdings and Contribution to Duration figures shown are based on a representative account from the Composite. The representative account was chosen since, in our view, it is the account within the Composite that most closely reflects the portfolio management style of the strategy. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors, including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment. Aristotle Credit Partners, LLC (Aristotle Credit) reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This is not a recommendation to buy or sell a particular security. Recommendations made in the last 12 months are available upon request. The ICE BofA 1-3 Year BB-B U.S. Cash Pay Fixed Maturity High Yield Constrained Index measures the performance of the U.S. dollar-denominated below investment grade corporate debt, currently in a coupon paying period, that is publicly issued in the U.S. domestic market; including 144A securities, both with and without registration rights. Qualifying securities must have risk exposure to countries that are members of the FXG10, Western Europe, or territories of the U.S. and Western Europe. The FX-G10 includes all Euro members, U.S., Japan, U.K., Canada, Australia, New Zealand, Switzerland, Norway and Sweden. Qualifying securities include only securities rated BB1 through B3, inclusive. Perpetual securities are not included as all securities must have a fixed final maturity date. All final maturity dates must range between 1 and 3 years. It is a capitalization-weighted index, constrained to 2% maximum weighting per issuer. The volatility (beta) of the Composite may be greater or less than that of the benchmark. It is not possible to invest directly in this index. Composite and index returns reflect the reinvestment of income.

Yield to Worst is the lowest potential yield expressed as a percent that can be received on a bond without the issuer actually defaulting. Effective Duration is an approximate measure of the strategy’s sensitivity to interest rate changes taking into consideration any maturity shortening features. Maturity (Avg.) is a finite period of time at the end of which the financial instrument will cease to exist and the principal is repaid with interest. Coupon (Avg.) is the weighted average of the coupon of each bond in the strategy. Price (Avg.) is the weighted average of each bond price in the portfolio. Turnover is calculated by taking either the total purchases or total sales of portfolio securities (whichever is less), over a particular period, and dividing it by the monthly average market value of the portfolio during that period. Credit Rating is sourced from Standard & Poor’s (S&P), Moody’s and Fitch. Ratings values are based on the middle of the three ratings if all three credit rating agencies rate the security; based on the higher rating if rated by two of three credit rating agencies; or based on the sole agency’s rating if rated by only one of the three credit rating agencies. The ratings represent their (S&P, Moody’s, Fitch) opinions as to the quality of the securities they rate. The ratings from AAA (S&P, Fitch) or Aaa (Moody’s) (extremely strong capacity to meet its financial commitment) to D (S&P, Fitch) or C (Moody’s) (in default). Ratings are relative and subjective and are not absolute standards of quality. The ratings provided relate to the underlying securities within the portfolio and not the portfolio itself. Unrated securities do not necessarily indicate low credit quality.

Aristotle Credit Partners, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Aristotle Credit, including our investment strategies and objectives, can be found in our FormADV Part 2, which is available upon request. ACP-2401-13

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Aristotle Credit Partners
Investment Grade Corporate Bond

Strategy Overview

The Investment Grade Corporate Bond strategy seeks to outperform the total return of the benchmark while actively managing portfolio risk.

  • The combination of top-down and bottom-up analysis leads to the most comprehensive perspective on the corporate credit market.
  • The integration of ESG factors into our analysis enhances our credit selection process.
  • Disciplined risk management is a critical component of investing in corporate credits and should be carried out at both the security and portfolio level.

 

Investment process includes the following tenets:

  • Focus on Quality: We seek credits with strong fundamentals, ample cash flow, solid capital structures and stable financial profiles.
  • In-Depth Research: Our process blends economic and market analysis with industry and credit research.
  • ESG Considerations: ESG factors are incorporated into our bottom-up, research process, with an emphasis on corporate governance.

Strategy Inception Date: May 1, 2014

Benchmark: Bloomberg U.S. Corporate Bond Index

Minimum Security Rating: BBB/BB

Cash: Maximum 5%

Issuer Max: AAA, AA, A: 5%; BBB: 4%; BBB/BB: 3%

Minimum Issue Size: $150M Original Issuance

Maximum Allocation to Split BBB/BB: 15%

Maximum Issue Holding: 10% of Original Issuance

Duration: +/- 25% of Index

Maximum Industry Allocation: 35%

High Yield Securities: Up to 15%

Portfolio Minimum Average Quality: BBB

As of: 12/31/2023

Performance

Trailing (%) QTD YTD 1 Yr 3 Yrs 5 Yrs Since Inception1
IG Corporate Bond Composite (Gross) 8.66 10.42 10.42 -2.03 3.51 3.60
IG Corporate Bond Composite (Net) 8.61 10.16 10.16 -2.29 3.23 3.30
Bloomberg U.S. Corporate Bond Index 8.50 8.52 8.52 -3.29 2.63 2.62
Calendar Year (%) 2023 2022 2021 2020 2019 2018 2017
IG Corporate Bond Composite (Gross) 10.42 -14.15 -0.81 8.64 16.34 -2.41 6.93
IG Corporate Bond Composite (Net) 10.16 -14.37 -1.10 8.41 15.94 -2.76 6.56
Bloomberg U.S. Corporate Bond Index 8.52 -15.76 -1.04 9.89 14.54 -2.51 6.42
1The Investment Grade Corporate Bond strategy has an inception date of May 1, 2014.
Past performance is not indicative of future results. Performance results for periods greater than one year have been annualized. Returns are preliminary pending final account reconciliation. Composite and benchmark returns reflect the reinvestment of income. Returns are presented gross and net of investment advisory fees and include the reinvestment of all income. Gross returns will be reduced by fees and other expenses that may be incurred in the management of the account. Net returns are presented net of actual investment advisory fees and after the deduction of all trading expenses. The Portfolio Data shown is based on a representative account. This material is not financial advice or an offer to buy or sell any product. Please see important disclosures at the end of the document.

Portfolio Data

  IG Corp. Benchmark2
Number of Issues 74 7,772
Effective Yield (%) 5.31 5.02
Effective Duration (Yrs) 6.89 7.08
Maturity (Avg., Yrs) 11.26 10.81
Coupon (Avg., %) 5.17 4.14
Price (Avg., $) 98.70 94.70
Average Credit Rating BBB+ A-
Turnover (1 Yr, %) 69.1

Allocation by Credit Rating (%)

  IG Corp. Benchmark2
AAA 1.1
AA 1.8 6.2
A 27.9 45.6
BBB 66.6 47.0
BB 2.7 0.1
B
CCC or Lower
Not Rated
Cash 1.0
Total 100.0 100.0

Top 10 Holdings (%)

Security Coupon Maturity Weight
JPMorgan Chase & Co 5.717% 09/14/33 3.1
Sprint Capital Corp 8.750% 03/15/32 2.6
Southern Co 5.113% 08/01/27 2.4
Discovery Communications LLC 5.300% 05/15/49 2.3
CDW LLC 3.276% 12/01/28 2.0
Bank of America Corp 6.300% 03/10/26 2.0
Marsh & McLennan Cos Inc 5.700% 09/15/53 1.9
Idaho Power Co 5.800% 04/01/54 1.9
Walmart Inc 4.100% 04/15/33 1.9
AutoZone Inc 5.200% 08/01/33 1.8
Total 21.9

Contribution to Duration (%)

Top 5 Overweights by Industry (%)

Industry IG Corp. Benchmark2
Utilities 16.5 8.7
Insurance 9.2 2.9
REITs & Real Estate Related 8.6 2.7
Finance Companies 5.8 1.2
Gaming 2.6 0.3

Top 5 Underweights by Industry (%)

Industry IG Corp. Benchmark2
Banking 14.2 23.2
Healthcare 2.6 5.8
Technology 6.7 9.4
Food, Beverage, Tobacco 2.3 4.7
DiversifIed Manufacturing & Construction Machinery 0.0 2.5

2Benchmark represents the Bloomberg U.S. Corporate Bond Index.
All investments carry a certain degree of risk, including the possible loss of principal. Investments are also subject to political, market, currency and regulatory risks or economic developments. There are risks specifically associated with fixed income investments such as interest rate risk and credit risk. Bond values fluctuate in price in response to market conditions. Typically, when interest rates rise, there is a corresponding decline in bond values. This risk may be more pronounced for bonds with longer-term maturities. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. High yield securities are generally rated lower than investment grade securities and may be subject to greater market fluctuations, increased price volatility, risk of issuer default, less liquidity, or loss of income and principal compared to investment grade securities. The material is provided for informational and/or educational purposes only and is not intended to be and should not be construed as investment, legal or tax advice and/or a legal opinion. Investors should consult their financial and tax adviser before making investments. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Information and data presented has been developed internally and/or obtained from sources believed to be reliable. Aristotle Credit does not guarantee the accuracy, adequacy or completeness of such information. The Aristotle Investment Grade Corporate Bond – Composite (the Composite) includes all discretionary accounts managed in this strategy. The objective of the Aristotle Investment Grade Corporate Bond strategy is to optimize long-term returns with a focus on mitigating market risk. The strategy is benchmarked to the Bloomberg U.S. Corporate Bond Index. The accounts in this composite consist of all separately managed fee-paying discretionary portfolios invested mainly in Investment Grade Credit securities, with a benchmark similar to the Bloomberg U.S. Corporate Bond Index in both asset class allocation and duration. The Composite will include only accounts that do not utilize leverage and do not have significant tax treatment or cash flow needs. It excludes Wrap accounts. A list of composite descriptions is available upon request. Past performance is not indicative of future results. The Portfolio Data, Allocation by Credit Rating, Top 5 Overweights and Underweights by Industry, Top 10 Holdings and Contribution to Duration figures shown are based on a representative account from the Composite. The representative account was chosen since, in our view, it is the account within the Composite that most closely reflects the portfolio management style of the strategy. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors, including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment. Aristotle Credit Partners, LLC (Aristotle Credit) reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This is not a recommendation to buy or sell a particular security. Recommendations made in the last 12 months are available upon request. The Bloomberg U.S. Corporate Bond Index measures the performance of investment grade corporate bonds that are U.S. dollar-denominated and have a remaining maturity of greater than one year. The volatility (beta) of the Composite may be greater or less than that of the benchmark. It is not possible to invest directly in this index.

Yield to Worst is the lowest potential yield expressed as a percent that can be received on a bond without the issuer actually defaulting. Effective Duration is an approximate measure of the strategy’s sensitivity to interest rate changes taking into consideration any maturity shortening features. Maturity (Avg.) is a finite period of time at the end of which the financial instrument will cease to exist and the principal is repaid with interest. Coupon (Avg.) is the weighted average of the coupon of each bond in the strategy. Price (Avg.) is the weighted average of each bond price in the portfolio. Turnover is calculated by taking either the total purchases or total sales of portfolio securities (whichever is less), over a particular period, and dividing it by the monthly average market value of the portfolio during that period. Credit Rating is sourced from Standard & Poor’s (S&P), Moody’s and Fitch. Ratings values are based on the middle of the three ratings if all three credit rating agencies rate the security; based on the higher rating if rated by two of three credit rating agencies; or based on the sole agency’s rating if rated by only one of the three credit rating agencies. The ratings represent their (S&P, Moody’s, Fitch) opinions as to the quality of the securities they rate. The ratings from AAA (S&P, Fitch) or Aaa (Moody’s) (extremely strong capacity to meet its financial commitment) to D (S&P, Fitch) or C (Moody’s) (in default). Ratings are relative and subjective and are not absolute standards of quality. The ratings provided relate to the underlying securities within the portfolio and not the portfolio itself. Unrated securities do not necessarily indicate low credit quality.

Aristotle Credit Partners, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Aristotle Credit, including our investment strategies and objectives, can be found in our Form ADV Part 2, which is available upon request. ACP-2401-12

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Aristotle Capital Boston
Small Cap Equity

Strategy Overview

  • Investment objective is to maximize long-term capital appreciation while mitigating risk relative to the benchmark over multi-year periods
  • Diversified, quality-oriented portfolios managed with a long-term time horizon
  • Contrarian approach seeks to identify companies with low market expectations and a high probability of fundamental improvement that are trading with attractive upside potential and limited downside risk
  • Portfolios consist of companies that we believe can create shareholder value and possess quality management teams, attractive industry dynamics and strong or improving financials
  • Fundamental, bottom-up approach to security selection, typically investing in stocks within the market capitalization range of the Russell 2000 Index at the time of purchase

 

Investment process includes the following tenets:

  • Experienced Team: The research team consists of six individuals averaging over 20 years of industry experience.
  • Long-Term Approach: We conduct bottom-up, fundamental research to identify quality-oriented businesses.
  • Depth of Research: We believe the overall depth and quality of information gathered leads to a more robust platform

Strategy Inception Date: July 1, 2002

The Small Cap Equity strategy initially began at a predecessor firm on July 1, 2002; however, the Small Cap Equity strategy has an inception date of January 1, 2015 at Aristotle Boston.

Assets: $2,285.3 million (as of 12/31/2023)

The total assets provided above represent $1,611.8 million of Small Cap Equity, $114.4 million of Small Cap Faith-Based and $559.1 million of Small Cap Ex-Fossil Fuel assets.

Holdings: 80-120

Benchmark: Russell 2000 Index

Individual Position Size: Maximum 4%

Annual Turnover: Typically 20% – 30%

Sector Weights: Maximum +/- 10% versus benchmark

Cash: Typically less than 5%

Vehicles Offered: Separate Account; Mutual Fund; Collective Trust

As of: 12/31/2023

Performance

Trailing (%) QTD YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Inception1
Small Cap Equity Composite (Gross) 11.18 7.56 7.56 5.25 9.89 7.95 9.23
Small Cap Equity Composite (Net) 11.02 6.85 6.85 4.62 9.26 7.34 8.46
Russell 2000 Index 14.03 16.93 16.93 2.22 9.97 7.15 7.28
Calendar Year (%) 2023 2022 2021 2020 2019 2018 2017
Small Cap Equity Composite (Gross) 7.56 -9.58 19.88 10.08 24.86 -11.59 18.98
Small Cap Equity Composite (Net) 6.85 -10.13 19.24 9.47 24.20 -12.03 18.43
Russell 2000 Index 16.93 -20.44 14.82 19.96 25.53 -11.01 14.65
1The Aristotle Small Cap Equity Composite has an inception date of November 1, 2006 at a predecessor firm. During this time, Dave Adams and Jack McPherson had primary responsibility for managing the strategy. Performance starting January 1, 2015 was achieved at Aristotle Boston.
Past performance is not indicative of future results. Performance results for periods greater than one year have been annualized. Returns are preliminary pending final account reconciliation. Returns are presented gross and net of actual investment advisory fees and include the reinvestment of all income. Gross returns will be reduced by fees and other expenses that may be incurred in the management of the account. Net returns are presented net of actual investment advisory fees and after the deduction of all trading expenses. This Material is not financial advice or an offer to buy or sell any product. Effective January 1, 2022, ACB Small Cap Composite has been redefined to exclude accounts with meaningful industry-specific restrictions or substantial values-based screens hampering implementation of the small cap strategy. Effective January 1, 2022, the Russell 2000 Value was removed as the secondary benchmark for the Aristotle Capital Boston Small Cap Equity strategy. Please see important disclosures at the end of this web page.

Characteristics

  Small Cap Equity Russell 2000
Number of Holdings 102 1,966
Active Share (%) 93.8
Turnover (1 Yr, %) 7.0
Dividend Yield (%) 1.3 1.4
Wtd. Avg. Market Cap ($B) 4.0 3.2
Price/Earnings (NTM) 15.2x 15.1x
Price/Book Value 1.9x 2.0x
Forward EPS Growth (5 Yrs, %) 10.4 13.6
Return on Equity (%) 10.0 7.1
Debt/Equity (TTM) 1.2 1.9

The Portfolio Characteristics shown are based on a representative account. Please see important disclosures at the bottom of this web page.

Market Cap Breakdown (%)

Portfolio Risk/Return Statistics

5 Years Small Cap Equity Russell 2000 Index
Annualized Alpha (%) 0.60
Beta 0.93 1.00
Standard Deviation (%) 23.14 24.22
Information Ratio -0.01
Sharpe Ratio 0.34 0.33
Tracking Error (%) 6.03

Top Ten Holdings (%)

Acadia Healthcare 2.2
Huron Consulting Group 2.1
AerCap Holdings 1.9
Merit Medical Systems 1.9
Itron 1.8
MACOM Technology Solutions 1.8
Advanced Energy Industries 1.7
ASGN 1.6
Chemed 1.6
Ardmore Shipping 1.6
Total 18.2

Sector Weights (%)

Sources: CAPS CompositeHubTM, SS&C Advent, FactSet, Russell Investments, eVestment
The Portfolio Characteristics shown are based on a representative account. The Top Ten Holdings and Market Cap Breakdown shown are based on a representative portfolio within the Aristotle Small Cap Equity Composite. The Portfolio Risk/Return Statistics shown are based on the Aristotle Small Cap Equity Composite (the Composite). The Sector Weights shown are based on the representative portfolio within the Aristotle Small Cap Equity Composite. The representative account was chosen since, in our view, it is the account within the Composite that most closely reflects the portfolio management style of the strategy. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors, including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment. You should not assume that any of the securities transactions, sectors or holdings discussed in this report are or will be profitable, or that recommendations Aristotle Capital Boston, LLC (Aristotle Boston) makes in the future will be profitable or equal the performance of the securities listed in this report. There is no assurance that any securities, sectors or industries discussed herein will be included in or excluded from an account’s portfolio. Aristotle Boston reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This is not a recommendation to buy or sell a particular security. Recommendations made in the last 12 months are available upon request. Past performance is not indicative of future results. The Russell 2000® Index measures the performance of the small cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index, representing approximately 10% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market capitalization and current index membership. The volatility (beta) of the composite may be greater or less than the benchmark. It is not possible to invest directly in this index. Active Share is a measure of the percentage of stock holdings in a manager’s portfolio that differ from the benchmark index. Turnover is calculated by taking either the total purchases or total sales of portfolio securities (whichever is less), over a particular period, and dividing it by the monthly average market value of the portfolio during that period. Dividend Yield is the ratio of a firm’s dividends each year relative to its share price. Weighted Average Market Capitalization is a dollar-value measurement of the size of companies in a portfolio or index. In such a weighting scheme, an average figure is derived from the market capitalizations of each company (their market prices multiplied by the number of shares outstanding) multiplied by their weights in the portfolio or index. Price to Earnings is the ratio of a firm’s closing stock price and its trailing 12 months’ earnings per share. Price to Book is a ratio used to compare a stock’s market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter’s book value per share. Forward EPS Growth is the percentage increase or decrease in the next five years’ earnings estimates compared to current year’s earnings estimates. Return on Equity is the amount of net income returned as a percentage of shareholders’ equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. Debt to Equity ratio is used to measure a company’s financial leverage, calculated by dividing a company’s total liabilities by its shareholders’ equity. The ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity. Annualized Alpha is the measure of risk-adjusted excess return over the style index. Beta is used to measure market risk. It is defined as the average relationship, over time, of the portfolio’s rate of return to the style index. Standard Deviation is a measurement of risk or variability of returns over time. Higher deviation represents higher volatility. Information Ratio is a measurement of returns above the benchmark (usually an index) relative to the volatility of those returns. Sharpe Ratio is a measurement of the excess return over the risk-free rate relative to standard deviation to determine the reward per unit of risk. Tracking Error is the annualized standard deviation of the differences between the portfolio and index returns. This material is not financial advice or an offer to buy or sell any product.

All investments carry a certain degree of risk, including the possible loss of principal. Investments are also subject to political, market, currency and regulatory risks or economic developments. International investments involve special risks that may in particular cause a loss in principal, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid. Value stocks can perform differently from the market as a whole and other types of stocks. The material is provided for informational and/or educational purposes only and is not intended to be and should not be construed as investment, legal or tax advice and/or a legal opinion. Investors should consult their financial and tax adviser before making investments. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Information and data presented has been developed internally and/or obtained from sources believed to be reliable. Aristotle Boston does not guarantee the accuracy, adequacy or completeness of such information.

Aristotle Capital Boston, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Aristotle Boston, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2, which is available upon request. ACB-2401-10

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Aristotle Capital Boston
Small/Mid Cap Equity

Strategy Overview

  • Investment objective is to maximize long-term capital appreciation while mitigating risk relative to the benchmark over multi-year periods
  • Diversified, quality-oriented portfolios managed with a long-term time horizon
  • Contrarian approach seeks to identify companies with low market expectations and a high probability of fundamental improvement that are trading with attractive upside potential and limited downside risk
  • Portfolios consist of companies that we believe can create shareholder value and possess quality management teams, attractive industry dynamics and strong or improving financials
  • Fundamental, bottom-up approach to security selection, typically investing in stocks within the market capitalization range of the Russell 2500 Index at the time of purchase

 

Investment process includes the following tenets:

  • Experienced Team: The research team consists of six individuals averaging over 20 years of industry experience.
  • Long-Term Approach: We conduct bottom-up, fundamental research to identify quality-oriented businesses.
  • Depth of Research: We believe the overall depth and quality of information gathered leads to a more robust platform

Strategy Inception Date: January 1, 2008

The Small/Mid Cap Equity strategy initially began at a predecessor firm on January 1, 2008; however, the Small/Mid Cap Equity strategy has an inception date of January 1, 2015 at Aristotle Boston.

Assets: $1,073.4 million (as of 12/31/2023)

Holdings: 80-120

Benchmark: Russell 2500 Index

Cash: Typically less than 5%

Annual Turnover: Typically 20% – 30%

Sector Weights: Maximum +/- 10% versus benchmark

Vehicles Offered: Separate Account; Collective Trust

Individual Position Size: Maximum 4%

As of: 12/31/2023

Performance

Trailing (%) QTD YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Inception1
Small/Mid Cap Equity Composite (Gross) 9.67 8.35 8.35 4.13 9.02 7.52 8.74
Small/Mid Cap Equity Composite (Net) 9.52 7.73 7.73 3.58 8.49 6.91 8.15
Russell 2500 Index 13.35 17.42 17.42 4.24 11.67 8.36 8.65
Calendar Year (%) 2023 2022 2021 2020 2019 2018 2017
Small/Mid Cap Equity Composite (Gross) 8.35 -12.05 18.50 10.23 23.73 -10.22 13.98
Small/Mid Cap Equity Composite (Net) 7.73 -12.52 17.93 9.71 23.25 -10.55 13.24
Russell 2500 Index 17.42 -18.37 18.18 19.99 27.77 -10.00 16.81
1The Aristotle Small/Mid Cap Equity Composite has an inception date of January 1, 2008 at a predecessor firm. During this time, Dave Adams and Jack McPherson had primary responsibility for managing the strategy. Performance starting January 1, 2015 was achieved at Aristotle Boston.
Past Performance is not indicative of future results. Performance results for periods greater than one year have been annualized. Returns are presented gross and net of actual investment advisory fees and include the reinvestment of all income. Gross returns will be reduced by fees and other expenses that may be incurred in the management of the account. Net returns are presented net of actual investment advisory fees and after the deduction of all trading expenses. Please see important disclosures at the bottom of this web page. Effective January 1, 2022, the Russell 2500 Value was removed as the secondary benchmark for the Aristotle Capital Boston Small/Mid Cap Equity strategy. Non-fee-paying accounts represented less than 5% of the SMID Cap Composite assets from December 31, 2010 to December 31, 2013. As of December 31, 2014, there were no non-fee-paying accounts in the Composite. In instances where non-fee paying accounts were included in the SMID Cap Composite, the highest model fee was applied to recalculate the net returns for composite purposes and the impact on the since inception return of the composite was deemed immaterial.

Characteristics

  Small/Mid Cap Equity Russell 2500
Number of Holdings 102 2,468
Active Share (%) 94.3
Turnover (1 Yr, %) 7.9
Dividend Yield (%) 1.2 1.5
Wtd. Avg. Market Cap ($B) 7.0 6.9
Price/Earnings (NTM) 17.6x 15.8x
Price/Book Value 2.1x 2.3x
Forward EPS Growth (5 Yrs, %) 10.5 11.9
Return on Equity (%) 11.6 11.8
Debt/Equity (TTM) 1.1 1.6

The Portfolio Characteristics shown are based on a representative account. Please see important disclosures at the bottom of this web page.

Market Cap Breakdown (%)

Portfolio Risk/Return Statistics

5 Years Small/Mid Cap Equity Russell 2500 Index
Annualized Alpha (%) -1.93
Beta 0.96 1.00
Standard Deviation (%) 22.84 23.23
Information Ratio -0.50
Sharpe Ratio 0.31 0.42
Tracking Error (%) 5.28

Top Ten Holdings (%)

FTI Consulting 2.1
AerCap Holdings 2.0
MACOM Technology Solutions 2.0
Acadia Healthcare 2.0
Gartner 2.0
Huron Consulting Group 1.9
Merit Medical Systems 1.9
Advanced Energy Industries 1.7
Chemed 1.7
ASGN 1.6
Total 18.9

Sector Weights (%)

Sources: CAPS CompositeHubTM, SS&C Advent, FactSet, Russell Investments, eVestment
The Top Ten Holdings and Market Cap Breakdown shown are based on a representative portfolio within the Aristotle Small/Mid Cap Equity Composite. The Portfolio Risk/Return Statistics shown are based on the Aristotle Small/Mid Cap Equity Composite (the Composite). The Sector Weights shown are based on the representative portfolio within the Aristotle Small/Mid Cap Equity Composite. The representative account was chosen since, in our view, it is the account within the Composite that most closely reflects the portfolio management style of the strategy. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors, including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment. You should not assume that any of the securities transactions, sectors or holdings discussed in this report are or will be profitable, or that recommendations Aristotle Capital Boston, LLC (Aristotle Boston) makes in the future will be profitable or equal the performance of the securities listed in this report. There is no assurance that any securities, sectors or industries discussed herein will be included in or excluded from an account’s portfolio. Aristotle Boston reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This is not a recommendation to buy or sell a particular security. Recommendations made in the last 12 months are available upon request. Past performance is not indicative of future results. The Russell 2500® Index measures the performance of the small cap to mid cap segment of the U.S. equity universe. The Russell 2500 Index is a subset of the Russell 3000® Index. It includes approximately 2,500 of the smallest securities based on a combination of their market capitalization and current index membership. The volatility (beta) of the composite may be greater or less than the benchmark. It is not possible to invest directly in this index. Composite and index returns reflect the reinvestment of income. Composite returns are presented gross and net of actual investment advisory fees. Returns are presented net of trading costs. Net returns reflect the additional deduction of management fees and are based on the actual accountlevel net returns. Performance is expressed in U.S. dollars.

All investments carry a certain degree of risk, including the possible loss of principal. Investments are also subject to political, market, currency and regulatory risks or economic developments. International investments involve special risks that may in particular cause a loss in principal, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid. Value stocks can perform differently from the market as a whole and other types of stocks. The material is provided for informational and/or educational purposes only and is not intended to be and should not be construed as investment, legal or tax advice and/or a legal opinion. Investors should consult their financial and tax adviser before making investments. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Information and data presented has been developed internally and/or obtained from sources believed to be reliable. Aristotle Boston does not guarantee the accuracy, adequacy or completeness of such information.

Active Share is a measure of the percentage of stock holdings in a manager’s portfolio that differ from the benchmark index. Turnover is calculated by taking either the total purchases or total sales of portfolio securities (whichever is less), over a particular period, and dividing it by the monthly average market value of the portfolio during that period. Dividend Yield is the ratio of a firm’s dividends each year relative to its share price. Weighted Average Market Capitalization is a dollar-value measurement of the size of companies in a portfolio or index. In such a weighting scheme, an average figure is derived from the market capitalizations of each company (their market prices multiplied by the number of shares outstanding) multiplied by their weights in the portfolio or index. Price to Earnings is the ratio of a firm’s closing stock price and its trailing 12 months’ earnings per share. Price to Book is a ratio used to compare a stock’s market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter’s book value per share. Forward EPS Growth is the percentage increase or decrease in the next five years’ earnings estimates compared to current year’s earnings estimates. Return on Equity is the amount of net income returned as a percentage of shareholders’ equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. Debt to Equity ratio is used to measure a company’s financial leverage, calculated by dividing a company’s total liabilities by its shareholders’ equity. The ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity. Annualized Alpha is the measure of risk-adjusted excess return over the style index. Beta is used to measure market risk. It is defined as the average relationship, over time, of the portfolio’s rate of return to the style index. Standard Deviation is a measurement of risk or variability of returns over time. Higher deviation represents higher volatility. Information Ratio is a measurement of returns above the benchmark (usually an index) relative to the volatility of those returns. Sharpe Ratio is a measurement of the excess return over the risk-free rate relative to standard deviation to determine the reward per unit of risk. Tracking Error is the annualized standard deviation of the differences between the portfolio and index returns.

Aristotle Capital Boston, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Aristotle Boston, including our investment strategies, fees and objectives, can be found in our FormADV Part 2, which is available upon request. ACB-2401-13

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Aristotle Atlantic Partners
Large Cap Growth

Strategy Overview

  • Fundamental, bottom-up analysis with an emphasis on secular themes, product cycles and cyclical trends
  • Overlay risk controls seeking to maximize the impact of stock selection
  • Select companies we believe are positioned to benefit from longer‐term shifts in spending across various industries and geographies
  • Objective is to achieve consistent risk‐adjusted returns that exceed the benchmark over a full market cycle (three to five years)

 

All portfolio holdings must meet the following three criteria:

  • Investment Pillars: We buy companies that we believe are primed to benefit from strong product cycles.
  • Attractive Valuation: Our fundamental, bottom‐up analysis seeks to identify companies with attractive valuations.
  • Strict Risk Control: Portfolios are constructed with a strict risk control methodology and adherence to a stringent buy/sell discipline.

Strategy Inception Date : November 1, 20161

Assets: $293.3 million (as of 12/31/2023)

Holdings: 35-50

Benchmark: Russell 1000 Growth Index

Cash: Maximum 10%: Average < 2%

Market Cap Range: Over $2 billion at purchase

Annual Turnover: Approximately 25% 

Sector Weights: 0%-200% of Index for sectors 1%-10%; 50%–150% of Index for sectors > 10%

Vehicles Offered: Separate Account

Individual Position Size: Maximum 5% at cost (unless benchmark weight > 3%)

As of: 12/31/2023

Performance

Trailing (%) QTD YTD 1 Yr 3 Yrs 5 Yrs Since Inception1
Large Cap Growth Composite (Gross) 13.61 36.83 36.83 4.68 17.62 16.51
Large Cap Growth Composite (Net) 13.43 36.14 36.14 4.24 17.14 16.04
Russell 1000 Growth Index 14.16 42.68 42.68 8.86 19.49 17.78
Calendar Year (%) 2023 2022 2021 2020 2019 2018 2017
Large Cap Growth Composite (Gross) 36.83 -31.37 22.13 42.97 37.29 -0.93 29.53
Large Cap Growth Composite (Net) 36.14 -31.61 21.66 42.40 36.73 -1.34 28.99
Russell 1000 Growth Index 42.68 -29.14 27.60 38.49 36.39 -1.51 30.21
1The Aristotle Large Cap Growth Composite has an inception date of November 1, 2016 at Aristotle Atlantic. However, Owen Fitzpatrick started managing the strategy on April 1, 2004 at Deutsche Bank Private Wealth Management (DB PWM).
Past performance is not indicative of future results. Performance results for periods greater than one year have been annualized. Returns are preliminary pending final account reconciliation. Large Cap Growth Composite returns are presented gross and net of investment advisory fees and include the reinvestment of all income. Gross returns will be reduced by fees and other expenses that may be incurred in the management of the account. Net returns are presented net of actual investment advisory fees and after the deduction of all trading expenses. Please see important disclosures at the end of this document.

Characteristics

  Large Cap Growth Russell 1000 Growth Index
Number of Holdings 41 443
Active Share (%) 44.9
Wtd. Avg. Market Cap ($B) 1,094.1 1,105.7
Price/Earnings (TTM) 35.5x 30.6x
Price/Book Value 8.8x 9.3x
Forward EPS Growth (5 Yrs, %) 18.1 16.9
Return on Equity (1 Yr, %) 28.3 26.5
Debt/Equity (TTM) 0.9 1.4

Market Cap Breakdown (%)

Largest Holdings (%)

Microsoft 12.6
Apple 10.6
Amazon 6.9
Alphabet 6.6
Nvidia 6.5
Visa 4.2
Adobe 3.1
Synopsys 2.9
ServiceNow 2.8
Home Depot 2.8
Total 59.0

Sector Weights (%)

Sources: SS&C Advent, FactSet, Russell Investments, eVestment
The Portfolio Characteristics shown are based on a representative account. The Largest Holdings figures shown are based on the model portfolio. The Market Cap Breakdown and Portfolio Characteristics figures shown are based on a representative account. The Sector Weights figures shown are based on the representative portfolio within the Aristotle Large Cap Growth Composite (the Composite) and excludes cash. The representative account was chosen since, in our view, it is the account within the Composite that most closely reflects the portfolio management style of the strategy. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors, including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment. You should not assume that any of the securities transactions, sectors or holdings discussed in this report are or will be profitable or that recommendations Aristotle Atlantic Partners, LLC (Aristotle Atlantic) makes in the future will be profitable or equal the performance of the securities listed in this report. There is no assurance that any securities, sectors or industries discussed herein will be included in or excluded from an account’s portfolio. Aristotle Atlantic reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This is not a recommendation to buy or sell a particular security. Recommendations made in the last 12 months are available upon request. Past performance is not indicative of future results. The Russell 1000® Growth Index is an unmanaged, market capitalization-weighted index that measures the performance of those companies in the Russell 1000® Index with higher price-to-book ratios and higher forecasted growth values. The volatility (beta) of the Composite may be greater or less than that of the benchmark. It is not possible to invest directly in this index. Active Share is a measure of the percentage of stock holdings in a manager’s portfolio that differ from the benchmark index. Weighted Average Market Capitalization is a dollar-value measurement of the size of companies in a portfolio or index. In such a weighting scheme, an average figure is derived from the market capitalizations of each company (their market prices multiplied by the number of shares outstanding) multiplied by their weights in the portfolio or index. Forward EPS Growth is the percentage increase or decrease in the next five years’ earnings estimates compared to current year’s earnings estimates. Return on Equity is the amount of net income returned as a percentage of shareholders’ equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. Debt to Equity ratio is used to measure a company’s financial leverage, calculated by dividing a company’s total liabilities by its shareholders’ equity. The ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity. This material is not financial advice or an offer to buy or sell any product.

All investments carry a certain degree of risk, including the possible loss of principal. Investments are also subject to political, market, currency and regulatory risks or economic developments. International investments involve special risks that may in particular cause a loss in principal, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid. Value stocks can perform differently from the market as a whole and other types of stocks. The material is provided for informational and/or educational purposes only and is not intended to be and should not be construed as investment, legal or tax advice and/or a legal opinion. Investors should consult their financial and tax adviser before making investments. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Information and data presented has been developed internally and/or obtained from sources believed to be reliable. Aristotle Atlantic does not guarantee the accuracy, adequacy or completeness of such information.

Aristotle Atlantic Partners, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Aristotle Atlantic, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2, which is available upon request. AAP-2401-8

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Aristotle Atlantic Partners
Focus Growth

Strategy Overview

  • Fundamental, bottom-up analysis with an emphasis on secular themes, product cycles and cyclical trends
  • Overlay risk controls seeking to maximize the impact of stock selection
  • Select companies we believe are positioned to benefit from longer‐term shifts in spending across various industries and geographies
  • Objective is to achieve consistent risk‐adjusted returns that exceed the benchmark over a full market cycle (three to five years)

 

All portfolio holdings must meet the following three criteria:

  • Investment Pillars: We buy companies that we believe are primed to benefit from strong product cycles.
  • Attractive Valuation: Our fundamental, bottom‐up analysis seeks to identify companies with attractive valuations.
  • Strict Risk Control: Portfolios are constructed with a strict risk control methodology and adherence to a stringent buy/sell discipline.

Strategy Inception Date: February 23, 2018

Assets : $883.8 million (as of 12/31/2023)

Holdings : 25-30

Benchmark: Russell 1000 Growth Index

Cash: Maximum 10%: Average < 2% 

Market Cap Range: Over $2 billion at purchase

Annual Turnover: Approximately 40% 

Sector Weights: 0%-200% of Index

Vehicles Offered: Separate Account

Individual Position Size: 15% purchase limit

As of: 12/31/2023

Performance

Trailing (%) QTD YTD 1 Yr 3 Yrs 5 Yrs Since Inception1
Focus Growth Composite (Gross) 15.02 37.21 37.21 3.87 16.93 12.52
Focus Growth Composite (Net) 14.99 37.08 37.08 3.77 16.74 12.27
Russell 1000 Growth Index 14.16 42.68 42.68 8.86 19.49 15.34
Calendar Year (%) 2023 2022 2021 2020 2019 20182
Focus Growth Composite (Gross) 37.21 -33.27 22.38 41.80 37.59 -8.97
Focus Growth Composite (Net) 37.08 -33.35 22.29 41.70 36.92 -9.37
Russell 1000 Growth Index 42.68 -29.14 27.60 38.49 36.39 -5.55
1The Aristotle Focus Growth Composite has an inception date of March 1, 2018.
22018 is a partial-year period, representing data from March 1, 2018 to December 31, 2018.
Past performance is not indicative of future results. Performance results for periods greater than one year have been annualized. Returns are preliminary pending final account reconciliation. Returns are presented gross and net of actual investment advisory fees and include the reinvestment of all income. Gross returns will be reduced by fees and other expenses that may be incurred in the management of the account. Net returns are presented net of actual investment advisory fees and after the deduction of all trading expenses. Please see important disclosures at the end of this web page.

Characteristics

  Focus Growth Russell 1000 Growth Index
Number of Holdings 28 443
Active Share (%) 46.2
Wtd. Avg. Market Cap ($B) 1,122.1 1,105.7
Price/Earnings (TTM) 37.6x 30.6x
Price/Book Value 9.0x 9.3x
Forward EPS Growth (5 Yrs, %) 17.6 16.9
Return on Equity (1 Yr, %) 30.3 26.5
Debt/Equity (TTM) 0.7 1.4

The Portfolio Characteristics shown are based on a representative account. Please see important disclosures at the bottom of this web page.

Market Cap Breakdown (%)

Largest Holdings (%)

Microsoft 12.5
Apple 9.7
Alphabet 7.2
Nvidia 7.2
Visa 6.0
Expedia Group 3.8
Synopsys 3.8
S&P Global 3.7
Meta Platforms 3.7
Costco Wholesale 3.7
Total 61.3

Sector Weights (%)

Sources: SS&C Advent, FactSet, Russell Investments, eVestment
The Portfolio Characteristics shown are based on a representative account. The Largest Holdings figures shown are based on the model portfolio. The Market Cap Breakdown and Portfolio Characteristics figures shown are based on a representative account. The Sector Weights figures shown are based on the representative portfolio within the Aristotle Focus Growth Composite (the Composite) and excludes cash. The representative account was chosen since, in our view, it is the account within the Composite that most closely reflects the portfolio management style of the strategy. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors, including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment. You should not assume that any of the securities transactions, sectors or holdings discussed in this report are or will be profitable or that recommendations Aristotle Atlantic Partners, LLC (Aristotle Atlantic) makes in the future will be profitable or equal the performance of the securities listed in this report. There is no assurance that any securities, sectors or industries discussed herein will be included in or excluded from an account’s portfolio. Aristotle Atlantic reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This is not a recommendation to buy or sell a particular security. Recommendations since the strategy’s inception at Aristotle Atlantic are available upon request. Past performance is not indicative of future results. The Russell 1000® Growth Index is an unmanaged, market capitalization-weighted index that measures the performance of those companies in the Russell 1000® Index with higher price-to-book ratios and higher forecasted growth values. The volatility (beta) of the Composite may be greater or less than that of the benchmark. It is not possible to invest directly in this index. Active Share is a measure of the percentage of stock holdings in a manager’s portfolio that differ from the benchmark index. Weighted Average Market Capitalization is a dollar-value measurement of the size of companies in a portfolio or index. In such a weighting scheme, an average figure is derived from the market capitalizations of each company (their market prices multiplied by the number of shares outstanding) multiplied by their weights in the portfolio or index. Forward EPS Growth is the percentage increase or decrease in the next five years’ earnings estimates compared to current year’s earnings estimates. Return on Equity is the amount of net income returned as a percentage of shareholders’ equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. Debt to Equity ratio is used to measure a company’s financial leverage, calculated by dividing a company’s total liabilities by its shareholders’ equity. The ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity. This material is not financial advice or an offer to buy or sell any product.

All investments carry a certain degree of risk, including the possible loss of principal. Investments are also subject to political, market, currency and regulatory risks or economic developments. International investments involve special risks that may in particular cause a loss in principal, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid. Value stocks can perform differently from the market as a whole and other types of stocks. The material is provided for informational and/or educational purposes only and is not intended to be and should not be construed as investment, legal or tax advice and/or a legal opinion. Investors should consult their financial and tax adviser before making investments. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Information and data presented has been developed internally and/or obtained from sources believed to be reliable. Aristotle Atlantic does not guarantee the accuracy, adequacy or completeness of such information.

Aristotle Atlantic Partners, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Aristotle Atlantic, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2, which is available upon request. AAP-2401-7

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Aristotle Atlantic Partners
Core Equity

Strategy Overview

  • Fundamental, bottom-up analysis with an emphasis on secular themes, product cycles and cyclical trends
  • Overlay risk controls seeking to maximize the impact of stock selection
  • Select companies we believe are positioned to benefit from longer‐term shifts in spending across various industries and geographies
  • Objective is to achieve consistent risk‐adjusted returns that exceed the benchmark over a full market cycle (three to five years)

 

All portfolio holdings must meet the following three criteria:

  • Investment Pillars: We buy companies that we believe are primed to benefit from strong product cycles.
  • Attractive Valuation: Our fundamental, bottom‐up analysis seeks to identify companies with attractive valuations.
  • Strict Risk Control: Portfolios are constructed with a strict risk control methodology and adherence to a stringent buy/sell discipline.

Strategy Inception Date: August 1, 20131

Assets: $1,348.1 million (as of 12/31/2023)

The AUM Assets figure provided above represent $742.0 million of Core Equity and $606.1 million of Focus Core.

Holdings: 45-60

Benchmark: S&P 500 Index

Cash: Maximum 10%; Average < 2%

Market Cap Range: Over $2 billion at purchase

Annual Turnover: Approximately 25%

Sector Weights: 0%-200% of Index for sectors 1%-10%; 50%–150% of Index for sectors > 10%

Vehicles Offered: Separate Account; Mutual Fund

Individual Position Size: Maximum 5% at cost (unless benchmark weight > 3%)

As of: 12/31/2023

Performance

Trailing (%) QTD YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs Since Inception1
Core Equity Composite (Gross) 12.95 23.85 23.85 6.69 15.91 12.30 13.18
Core Equity Composite (Net) 12.84 23.34 23.34 6.24 15.43 11.79 12.66
S&P 500 Index 11.69 26.29 26.29 10.00 15.68 12.03 12.61
Calendar Year (%) 2023 2022 2021 2020 2019 2018 2017
Core Equity Composite (Gross) 23.85 -21.61 25.07 26.80 35.85 -4.96 22.30
Core Equity Composite (Net) 23.34 -21.94 24.55 26.30 35.30 -5.36 21.85
S&P 500 Index 26.29 -18.11 28.71 18.40 31.49 -4.38 21.83
1The Aristotle Core Equity Composite has an inception date of August 1, 2013 at a predecessor firm. During this time, Mr. Fitzpatrick had primary responsibility for managing the strategy. Performance starting November 1, 2016 was achieved at Aristotle Atlantic.
Past Performance is not indicative of future results. Performance results for periods greater than one year have been annualized. Returns are presented gross and net of actual investment advisory fees and include the reinvestment of all income. Gross returns will be reduced by fees and other expenses that may be incurred in the management of the account. Net returns are presented net of actual investment advisory fees and after the deduction of all trading expenses. Please see important disclosures at the bottom of this web page.

Characteristics

  Core Equity S&P 500 Index
Number of Holdings 51 500
Active Share (%) 61.2
Wtd. Avg. Market Cap ($B) 774.6 722.5
Price/Earnings (TTM) 25.4x 22.0x
Price/Book Value 6.7x 6.1x
Forward EPS Growth (5 Yrs, %) 13.5 13.0
Return on Equity (1 Yr, %) 26.3 21.4
Debt/Equity (TTM) 0.9 1.2

The Portfolio Characteristics shown are based on a representative account. Please see important disclosures at the bottom of this web page.

Market Cap Breakdown (%)

Largest Holdings (%)

Microsoft 8.7
Apple 6.5
Alphabet 4.9
Amazon 4.4
Nvidia 3.8
Broadcom 3.1
JPMorgan Chase 2.8
Costco Wholesale 2.6
AMETEK 2.4
Meta Platforms 2.2
Total 41.4

Sector Weights (%)

Sources: SS&C Advent, FactSet, Standard & Poor’s, eVestment
The Largest Holdings figures shown are based on the model portfolio. The Market Cap Breakdown and Portfolio Characteristics figures shown are based on a representative account. The Sector Weights figures shown are based on the representative portfolio within the Aristotle Core Equity Composite (the Composite) and excludes cash. The representative account was chosen since, in our view, it is the account within the Composite that most closely reflects the portfolio management style of the strategy. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors, including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment. You should not assume that any of the securities transactions, sectors or holdings discussed in this report are or will be profitable or that recommendations Aristotle Atlantic Partners, LLC (Aristotle Atlantic) makes in the future will be profitable or equal the performance of the securities listed in this report. There is no assurance that any securities, sectors or industries discussed herein will be included in or excluded from an account’s portfolio. Aristotle Atlantic reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This is not a recommendation to buy or sell a particular security. Recommendations made in the last 12 months are available upon request. Past performance is not indicative of future results. The S&P 500® Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock prices. The volatility (beta) of the Composite may be greater or less than that of the benchmark. It is not possible to invest directly in this index. Active Share is a measure of the percentage of stock holdings in a manager’s portfolio that differ from the benchmark index. Weighted Average Market Capitalization is a dollar-value measurement of the size of companies in a portfolio or index. In such a weighting scheme, an average figure is derived from the market capitalizations of each company (their market prices multiplied by the number of shares outstanding) multiplied by their weights in the portfolio or index. Forward EPS Growth is the percentage increase or decrease in the next five years’ earnings estimates compared to current year’s earnings estimates. Return on Equity is the amount of net income returned as a percentage of shareholders’ equity. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. Debt to Equity ratio is used to measure a company’s financial leverage, calculated by dividing a company’s total liabilities by its shareholders’ equity. The ratio indicates how much debt a company is using to finance its assets relative to the amount of value represented in shareholders’ equity.

All investments carry a certain degree of risk, including the possible loss of principal. Investments are also subject to political, market, currency and regulatory risks or economic developments. International investments involve special risks that may in particular cause a loss in principal, including currency fluctuation, lower liquidity, different accounting methods and economic and political systems, and higher transaction costs. These risks typically are greater in emerging markets. Securities of small- and medium-sized companies tend to have a shorter history of operations, be more volatile and less liquid. Value stocks can perform differently from the market as a whole and other types of stocks. The material is provided for informational and/or educational purposes only and is not intended to be and should not be construed as investment, legal or tax advice and/or a legal opinion. Investors should consult their financial and tax adviser before making investments. The opinions referenced are as of the date of publication, may be modified due to changes in the market or economic conditions, and may not necessarily come to pass. Information and data presented has been developed internally and/or obtained from sources believed to be reliable. Aristotle Atlantic does not guarantee the accuracy, adequacy or completeness of such information.

Aristotle Atlantic Partners, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Aristotle Atlantic, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2, which is available upon request. AAP-2401-5

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