RiverPoint Capital Management’s overall investment philosophy is focused on providing you with a well-diversified investment portfolio consisting of multiple asset classes. Our goal is to help you meet your investment objectives and minimize risk.
We take an active approach to diversifying our client portfolios among multiple asset classes, including cash, bonds, stocks and alternative investments. The specific types of investments we consider are summarized below:
- Cash: High-Quality Money Market Funds
- Fixed Income: High-Quality Corporate Bonds, U.S. Treasuries, Municipal Bonds and Preferred Stock Securities
- Equities: Large Cap Growth & Value, Dividend Growth Stocks, Mid Cap Growth & Value, Small Cap Growth & Value and International Equities
- Alternatives: Real Estate Investment Trusts, Commodities, Master Limited Partnerships, High-Yield Bonds, Long/Short Funds
These asset classes are used, when appropriate, to attempt to take advantage of market conditions, control risk and maximize returns. We realize you have unique objectives, risk tolerances and constraints and we will structure your portfolio accordingly. After gaining an understanding of what is important to you, we will then determine the appropriate mix of cash, bonds, stocks and alternative investments to help you achieve your goals and minimize risk.
We favor companies that have a dominant market share within their industry, possess a balance sheet that demonstrates financial strength and flexibility and generate strong consistent earnings. A history of treating shareholders equitably is also important to us, with a focus on companies that exhibit a history of dividend growth.
For the equity section of your portfolio, our investment team conducts a three-stage selection process.
- In stage one, our investment team uses quantitative analysis to screen more than 10,000 companies, based on market capitalization, debt levels, cash flow, earnings growth, dividend growth and numerous other financial metrics to reduce the investment universe to approximately 150-200 companies.
- In stage two, the investment universe is broken down by sectors and fundamental analysis is conducted to compare each company in the sector to its peer group on various financial metrics.
- In stage three, our investment team reviews the results of the fundamental analysis to identify those companies with the desired risk/return opportunities. This work results in a diversified portfolio of approximately 40-50 individual stocks.
We adhere to a similarly rigorous sell discipline that seeks to minimize significant losses.
Our process and philosophy is focused on companies with the following attributes and characteristics:
- Superior Management – Clean Accounting
Experienced, Clear Vision, Shareholder Oriented, Ownership
- High Quality – Attractive Stock Valuation
Sound Capital Structure, Low Debt-To-Capital Ratio, Return On Equity
Growth of Dividends, Long History of Dividend Payments
- Above-Average Growth – Strong Cash Flow
Earnings, Sales, Cash Flow
- Strong Franchises – Sustainable Competitive Advantage
Industry Leader, High Barriers To Entry, Global Presence, Control Over Pricing
Bond portfolios play an important role in our investment strategies with an objective of providing income and preservation of principal. Our approach to bond management is designed with a goal to deliver after-tax returns while seeking to reduce overall portfolio risk. Our research group explores all major sectors of the bond market and conducts research with a focus on high quality.
For most of our clients, fixed income securities play an important role in reducing the volatility of their portfolio. Riverpoint has experience in managing bond portfolios and market cycles.
Our strategy and process starts with an analysis of the financial and economic outlook as it relates to interest rates.
The investment team then determines the maturity, duration and credit quality of the bonds to be selected. Our focus is on high-quality bonds that aim to bring consistent, dependable income to our client portfolios.
Large Stock Position Management
Our professionals have experience helping clients manage large positions of low-cost basis stick, analyzing and suggesting strategies you need to reduce the risk and taxes. We have assisted our clients with techniques such as equity collars, pre-paid variable forward sales, exchange funds, charitable remainder trusts and strategically selling shares outright. We have worked with single stock positions of Procter & Gamble and other companies.
Independent Investment Research
We do our own proprietary investment research and analysis and couple that with efficient investment decision-making. Our investment professionals use sophisticated investment research tools, and our research experience includes quantitative, fundamental and technical analysis of the investment markets.