|October 24, 2017||
Over the third quarter of 2017, the NorthCoast Growth strategy was up 2.8% net of fees, while the S&P500 Index was up 4.3%.
Running an attribution versus the S&P500 Index, we generate three estimates of the impact on performance from cash allocation, sector allocation and stock selection.
First, we consider cash allocation for the quarter, which averaged 15.5% and had an impact of -0.7% on the relative strategy performance. This underperformance was due to the portion of the allocation not participating in the equity uptrend that continued over the course of the quarter. While cash helps protect assets in down-trending markets, it is a hindrance when equities rise. This is a strategic trade-off when utilizing a cash scaling technique. You can read more about the way we scale to cash here.
Second, we breakdown the largest allocation differences versus the S&P500 Index, which were overweight Financials and Health Care and underweight Energy, Information Technology and Utilities. Overall, our sector allocation decisions had a +0.02% impact on the relative performance. The small positive contribution was helped by a positive quarter for financials, but hurt by lackluster returns in domestic healthcare.
Finally, we inspect the contribution from stock selection. The contribution was positive in Consumer Discretionary, Consumer Staples and Industrials while negative in Financials, Health Care and Information Technology. The stock selection effect was a negative contributor to the performance of the strategy with a -0.6% hit to relative performance.
|November 1, 2012||
NorthCoast Growth seeks long-term growth with downside risk protection through the implementation of a repeatable 3-step process:
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