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Investment Philosophy & Risk Management

Investment Philosophy

Curran Investment Management's institutional equity portfolios seek to generate returns above their respective benchmark equity indices over a full market cycle with less risk. This is accomplished by purchasing and holding stocks of fundamentally strong companies within the appropriate market capitalization ranges over the long-term. The philosophy and approach of all Curran portfolios are unchanged from their inceptions. We routinely exhibit the ability to discover high-quality companies which allows for concentration in our best investment ideas.

Our investment approach begins with a proprietary, multi-factor front-end analysis used to narrow a large number of stocks within a starting universe. In the long run, stock prices are most correlated to the fundamentals and profit growth of the underlying company. This investment strategy has been validated by many academic studies over time. It is routinely found that companies with the strongest financials, especially those with robust or improving balance sheets, offer the most attractive opportunities at the lowest relative risk to deliver ongoing growth in earnings.

Risk Management

Risk management is accomplished through the use of portfolio construction control parameters. Portfolios are diversified among most sectors, emphasizing those sectors that have demonstrated a history of consistent growth. The maximum allocation to any one sector is the greater of 40% or 2 times the benchmark sector weight. The minimum sector allocation is half (0.5 times) of the benchmark sector weight in the large sectors, and zero in the smaller sectors.

The weights of single stock positions are capped at various maximum percentages of the portfolios. The strategies that have the lowest number of holdings have the highest allowed individual position sizes in percentage terms. Curran does not look to time the market, and portfolio turnover is relatively low in market-cap-specific portfolios such as All Cap and SMid with an emphasis on momentum experience higher portfolio turnover. Portfolios remain fully invested at all times, with the cash position never exceeding 5%. As measured by standard deviation, market-cap specific portfolios such as our Core Growth, Midcap and Small Cap have been successful in risk mitigation as they have experienced lower volatility (less risk) than their respective benchmark indices over most time periods since inception. While All Cap and SMid have been more volatile, the investment strategies have generated compelling risk-adjusted returns.