Edgewood Growth Fund

Portfolio Risk Management

“We employ a thorough, repeatable research process prior to investing, and we bring personal, hands-on care to our clients' specific needs. ”

- Alan Breed,
President & Portfolio Manager

Edgewood’s Large Cap Growth Equity strategy pursues a bottom-up investment process to construct a portfolio of large-cap growth companies. Edgewood limits its position in any one security to an 8% cap and a 25% limit in any one sector, as defined by Edgewood's Investment Committee.

Edgewood focuses on two distinct areas when managing the portfolio:

Stock Selection

The investment team searches for companies that are considered, according to our investment methodology, as well positioned for long-term growth, driven by demand for their products and services, trading at substantial discounts to their fair value, and are at an early stage in their potential profit cycle.

Capital Allocation

Based on the investment team’s fundamental analysis of a company’s profit cycle and using a five-year discount to present value model, portfolio holdings evolve through three phases:

In Phase One investments are considered to be in the early part of their potential profit cycle and are expected to provide a more sizable weighting once their potential profit cycle begins to grow;

In Phase Two investments are companies that are considered being increased to a larger weighting due to the relative attractiveness of their valuation in addition to the company moving through the strongest part of its profit cycle;

Lastly, in Phase Three investments are companies that are being reduced because they are nearing the team’s estimate of full valuation or their profit cycle has begun to deteriorate.