Babcock California Fund

Investment Philosophy

The overall objective of the Babcock California Fund is to outperform the Russell 2000 index. The investment philosophy of the fund is to select stocks that have a reasonable P/E multiple and an above-average growth rate in earnings per share, which will outperform the index benchmark over the long term. We use a bottom-up approach focusing on individual stock analysis and company fundamentals. Although industry analysis and macroeconomic trends play into our opinions, we do not employ specific industry weightings or macroeconomic strategies. As part of our screening process, we assess both quantitative and qualitative factors:

Security Selection Methodology

Investment Style:

  • Small-Cap
  • Core

Market Cap Universe:

  • $300MM – $5B

General Investment Mandate:

  • Long only
  • ADR ≤ 10%
  • No one security can account for >10% of the portfolio
  • Annual turnover ratio will be ≤ 50%, but, with the permission of the SIF instructor, can be >50%
  • Cash ≤ 10%
  • Sell if fraud is announced (or suspected)

Additional Concentration Guidelines:

  • 50% domiciled in California

Benchmark:

  • Russell 2000