|
The 5 Pillars of Relative Value Investing (RVI™)
Academic research formed the foundation for the investment process Cimarron uses today - Relative Value Investing (RVI™). At the heart of the RVI™ concept is the idea that portfolios of stocks that are attractive relative to their sector peers consistently outperform the benchmark, with less volatility. When it comes to portfolio construction, Cimarron applies these proven principles to all of the firm's investment strategies:
|
|
|
Stocks are selected based on their attractiveness relative to their sector peers
Portfolio has the same sector weightings as the benchmark
Lower downside risk than a portfolio based on sector bets or market timing
|
|
|
Smaller average position size
Limited individual stock concentration (no more than 4%)
Lower volatility than a cap-weighted or conviction-weighted portfolio
|
|
|
Diverse enough to control volatility
Concentrated enough to allow meaningful returns
|
|
|
Quantitative models rank stocks within sectors
Final stock selection based on fundamentals
Avoids value traps and "black box" pitfalls
|
|
|
Weekly review / Quarterly rebalancing
Fundamental review and sell "triggers"
Adds value by keeping the portfolio within Relative Value Investing (RVI™) parameters
|
To learn more about the academic research behind Cimarron's investment approach, please see The RVI™ Story.
|
|
