Optimized SMID Cap Core
Q1 2021 | March 31, 2021
Annualized Returns (%)
|QTD||YTD||1 Year||3 Years||5 Years||7 Years||10 Years||Since Inception1|
|Gross of fees||14.77||14.77||72.10||14.10||16.33||12.40||14.00||11.07|
|Net of fees||14.70||14.70||71.70||13.81||15.97||12.05||13.65||10.75|
|1 Inception Date: October 31, 2007 2 Benchmark: Russell 2500|
|Portfolio Weight||Benchmark Weight|
|Excess return (gross since inception)||1.40%||–|
|Excess return (net since inception)||1.08%||–|
|Information ratio (gross since inception)||0.34||–|
|Information ratio (net since inception)||0.26||–|
|P/E using FY1 est||14.6||20.0|
|P/E using FY2 est||13.8||18.2|
|Historical 3 year EPS growth||21.3%||12.9%|
|Weighted average market cap||$7,301mm||$7,114mm|
Sector Weights (%)
|Portfolio Weight||Benchmark Weight|
Top Ten Holdings (%)
|EMCOR Group, Inc.||1.89|
|Interpublic Group of Companies, Inc.||1.81|
|Aspen Technology, Inc.||1.74|
|Graphic Packaging Holding Company||1.72|
|Booz Allen Hamilton Holding Corporation Class A||1.70|
|Stifel Financial Corp.||1.67|
|Werner Enterprises, Inc.||1.62|
- Proven quantitative stock selection models
- Focused on achieving optimal risk-return tradeoffs
- ESG factors taken into consideration
- Structured and disciplined investment process
- Experienced investment team
- Corporate culture built on client service and diversity
Sumali Sanyal, CFA
Cameron McLennan, CFA
Xponance® is a multistrategy investment firm offering strategies across equity and fixed income. We are independent and employee owned by women and diverse professionals, whose common passion is to do the right thing for our clients and each other. Xponance® is the successor firm representing the integration of two great legacy firms, FIS Group, Inc. and Piedmont Investment Advisors, LLC
Investment Philosophy & Process
Our investment philosophy focuses on striking an appropriate balance between risk and return in our management of clients’ portfolios while taking ESG factors into consideration. The elements of this philosophy include – emphasis on security selection, quantification of major sources of risk, diversification as a means of managing common factor risk without reducing expected returns and controlling tracking error. We utilize internally developed quantitative models for stock selection. These models are built using factors that reflect and measure fundamental drivers of growth, value, and momentum, and have also been shown to be consistent and predictive drivers of long-term excess returns. Our portfolio construction methods focus on maximizing exposure to these factors while controlling both ESG risk and portfolio active risk.
|Assets in strategy||$0.68mm|
|Predicted tracking error||4% vs. b/m|
|No. of stocks||<100|
|Vehicle(s) available||Separately managed|
Annualized Disclosure Presentation
|Composite Assets||Annualized Performance Results (%)||3 Year Ex-Post Standard Deviation (%)|
|Year End||Total Firm Assets ($mm)||USD ($mm)||Number of Accounts||Composite Gross||Composite Net||Benchmark1||Composite Dispersion (%)||Composite||Benchmark1|
|2019||5,411||0.57||5 or fewer||36.67||36.22||27.77||N/A3||15.71||14.58|
|2018||4,026||0.14||5 or fewer||-7.99||-8.26||-10.00||N/A3||14.84||14.10|
|2017||6,817||100.4||5 or fewer||23.51||23.01||16.81||N/A3||12.05||12.13|
|2016||6,249||35.8||5 or fewer||17.46||17.04||17.59||N/A3||13.07||13.67|
|2015||5,577||0.1||5 or fewer||-2.02||-2.33||-2.90||N/A3||12.17||12.42|
|2014||2,542||0.1||5 or fewer||11.25||10.87||7.07||N/A3||11.62||11.67|
|2013||2,731||0.2||5 or fewer||39.09||38.62||36.80||N/A3||15.75||15.63|
|2012||3,425||0.2||5 or fewer||22.29||21.99||17.88||N/A3||N/A2||N/A2|
|2011||3,441||5.0||5 or fewer||0.52||0.30||-1.73||N/A3||N/A2||N/A2|
|2010||3,449||5.0||5 or fewer||23.74||23.46||26.64||N/A3||N/A2||N/A2|
1 Benchmark: Russell 2500 2 Not shown because 36 monthly returns are not available. 3 The composite’s internal dispersion is not presented for those periods marked “N/A” because the composite did not have at least six portfolios for the entire annual period.
Performance presented prior to December 15, 2010 occurred while the Portfolio Management Team was affiliated with a prior firm and the Portfolio Management Team members were the only individual(s) responsible for selecting the securities to buy and sell. Piedmont Investment Advisors maintains all of the books and records to support the historical performance.
The 3-year annualized standard deviation measures the variability of the composite and the benchmark returns over the preceding 36-month period. Standard deviation is not required for periods prior to 2011. Xponance,® Inc. (“Xponance®”) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Xponance® has been independently verified for the periods from November 1, 1998 through December 31, 2019. A copy of the verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compli- ance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. . GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
On August 31, 2018, FIS Group, Inc. (“FIS Group”) acquired Piedmont Investment Advisors, Inc.’s (“PIA”) predecessor, Piedmont Investment Advisors, LLC. Xponance,® Inc. (“Xponance®”) is an independent, registered investment adviser and is the successor registrant under the Investment Advisers Act of 1940 (the “Advisers Act”) to both FIS Group and its wholly-owned subsidiary, PIA. Pursuant to a corporate rebranding and consolidation strategy, Xponance® was established effective April 1, 2020, to leverage the long histories of its predecessor entities in providing customized investment management products to institutional clients. FIS Group (through its former subsidiaries, Fiduciary Investment Solutions, Inc. and FIS Funds Management, Inc.) managed assets since 1996 and PIA (through its former affiliate Piedmont Investment Advisors, LLC) began managing assets in 2000. The firm maintains a complete list of composite descriptions, which is available upon request.
Total firm assets presented through, and including, Calendar Year 2019 represent total firm assets for PIA, prior to April 1, 2020, this composite was managed by legacy firm PIA. Total firm assets presented post April 1, 2020 represent the total firm assets of Xponance®.
Optimized SMID Cap Core Composite contains fully discretionary SMID core equity accounts and for comparison purposes is measured against the Russell 2500 Index. The product typically has fewer than 100 holdings and a predicted tracking error target range of 5% – 8% vs. Russell 2500. The Optimized SMID Core Composite was created on December 15, 2010. The Optimized SMID Core Composite’s inception date is 10/31/07. This composite was renamed on September 30, 2012 to better reflect the true strategy of the product. Formerly, the composite was named “Optimized Mid Cap Core vs. S&P Midcap Composite”. This composite changed its benchmark on September 30, 2012 from the S&P Midcap to the Russell 2500 because the latter benchmark better represents the investable universe of the product.
Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Past performance is not indicative of future results. Xponance® maintains a significant cash flow policy. A significant cash flow has been defined as any client requested cash withdrawal where we must execute trades to generate the requested cash. We will remove the cash from the account the day we raise the cash; therefore, significant cash flows out of an account will be treated as a temporary account and the member account will remain in the composite.
The U.S. Dollar is the currency used to express performance. Returns are presented gross and net of management fees and include the reinvestment of all income. Net of fee performance was calculated using actual management fees.
The annual composite dispersion presented is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. The management fee schedule for the composite is as follows: First $50mm: 60 bps; Next $50mm: 50 bps; Over $100mm: 40 bps
Fees are charged to clients on a quarterly basis. Fees are calculated as a percentage of assets under management and vary based upon the type of product and the total amount of assets under management. The percentage fee is expressed terms of basis points (“BPS”) for our products. One hundred basis points equal 1%. All fees are negotiable.