S&P 500 ESG Enhanced Strategy

Q3 2022 | September 30, 2022

Annualized Returns (%) 

QTD YTD 1 Year 3 Years 5 Years 7 Years 10 Years Since Inception1
Gross of fees -5.12 -23.97 -15.41 -8.93
Net of fees -5.14 -24.01 -15.47 -9.00
Benchmark -4.88 -23.87 -15.47 -8.90
1 Inception Date: April 12, 2021 2 Benchmark: S&P 500

Characteristics

Portfolio Weight Benchmark Weight
Excess return (gross since inception) -0.03%
Excess return (net since inception) -0.10%
Holdings 439 503
P/E using FY1 est 16.2 16.1
P/E using FY2 est 15.1 15.0
Dividend yield 1.8% 1.8%
Historical 3 year EPS growth 19.7% 18.8%
Weighted average market cap in $M $468,475.66mm $468,654.84mm

Sector Weights (%)

Portfolio Weight Benchmark Weight

Communication Services 8.39 8.07
Consumer Discretionary 11.47 11.72
Consumer Staples 6.46 6.88
Energy 4.27 4.55
Financials 11.61 11.01
Health Care 14.83 15.11
Industrials 7.63 7.88
Information Technology 27.01 26.40
Materials 2.87 2.51
Real Estate 2.82 2.80
Utilities 2.66 3.07

Top Ten Holdings (%)

Portfolio Weight
Apple Inc. 7.21
Microsoft Corporation 5.96
Amazon.com, Inc. 3.14
Tesla Inc 1.94
Alphabet Inc. Class A 1.92
Berkshire Hathaway Inc. Class B 1.87
Alphabet Inc. Class C 1.78
UnitedHealth Group Incorporated 1.64
Johnson & Johnson 1.22
Home Depot, Inc. 1.09

Distinguishing Attributes

  • Structured and disciplined investment process
  • Customized to incorporate ESG considerations
  • Experienced investment team
  • Corporate culture built on client service and diversity

Total product assets shown above may include accounts that are not reflected in the GIPS®* report below. Portfolio characteristics are subject to change, and current holdings may differ. Past performance is not an indication of future results. Returns are presented gross and net of management fees and include the reinvestment of all income. GIPS-compliant performance information for the firm’s strategies and products are available upon request at info@xponance.com. A GIPS report is found at the end of this presentation. Statistics shown above are supplemental information to the GIPS report at the end of this presentation. Results represent preliminary data which is subject to change. For further performance data, please see the Xponance® S&P 500 ESG Enhanced Strategy disclosures below.

*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.

Portfolio Management

Sumali Sanyal, CFA

Managing Director, Senior Portfolio Manager, Systematic Global Equities

Cameron McLennan, CFA

Director, Portfolio Manager, Systematic Global Equities

About Xponance®

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

This strategy is managed versus the S&P 500 Index using a customized ESG overlay. ESG scores from Sustainalytics are used in the portfolio construction process to ensure that the portfolio has a better ESG profile than its benchmark. The strategy is risk aware and has a low turnover. The goal is to generate index like returns with a portfolio that has a more positive ESG profile.

Portfolio Facts

 

Inception date 4/12/2021
Assets in strategy $8.79mm
Benchmark S&P 500
Predicted tracking error Less than 0.5%
Sectors B/m ± 0.5%
Annual Turnover Less than 15%
Min. investment $10mm
Vehicles available Separately managed

Annual Disclosure Presentation

Performance Results (%) 3-Yr Annualized Ex-Post Standard Deviation (%)
Year End Composite Gross TWR Composite Net TWR Benchmark1 Composite Gross Benchmark1 Number of Portfolios Composite Assets ($mm) Total Firm Assets ($mm)
20212 15.18 15.11 15.08 N/A N/A Five or fewer 12 14,866
Composite inception date: April 30, 2021. 1 Benchmark: S&P 500 2Partial Period Performance Shown from April 30, 2021 through December 31, 2021.

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, 2021. The verification report is available upon request.

A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite and pooled fund maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis. Verification does not provide assurance on the accuracy of any specific performance report.

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 list of composite descriptions and limited pool fund(s) descriptions, which is available upon request S&P 500 Enhanced ESG Strategy Composite contains fully discretionary S&P 500 accounts where the portfolios are constructed to achieve specific target weights for ESG Risk Ratings from Sustainalytics. The S&P 500 Enhanced ESG Strategy Composite was created on April 30, 2021. For comparison purposes this strategy is measured against the S&P 500 Index. The S&P 500 is an index of 500 stocks seen as a leading indicator of U.S. equities and a reflection of the performance of the large cap universe. The S&P 500 is a market value weighted index and one of the common benchmarks for the U.S. stock market.

Results are based on fully discretionary accounts under management. Accounts that are no longer with the firm are included through the last full measurement period such accounts were managed in the composite’s style. Past performance is not indicative of future results. The composite maintains a significant cash flow policy. Effective 9/30/2022, a significant cash flow has been defined as any client requested cash flow that would impede the firm’s ability to implement the composite strategy. We will remove the assets from the account the day we raise cash or transfer the assets into the account after trading is complete; therefore, the assets will be moved or held in a temporary account and the member account will remain in the composite. Prior to 9/30/2022 the significant cash flow was 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. Policies for valuing investments, calculating performance, and preparing GIPS reports are available upon request .

The management fee schedule is as follows: First $50mm: 10.0 bps; Next $450mm: 7.5 bps; Over $500mm: 5.0 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.

The three-year annualized standard deviation measures is not presented because 36 monthly returns are not available.

Internal dispersion presented is an equal-weighted standard deviation of annual gross returns of those portfolios that were in the composite for the entire year. For those years when less than six portfolios were included in the composite for the full year, no dispersion measure is presented.