Objective
The StoneRidge Quantitative Small Cap Growth Equity portfolio seeks to outperform its benchmark (the Russell 2000 Growth index) and industry peers over a market cycle (3-5 year time horizon).
Philosophy
StoneRidge believes that its proprietary quantitative modeling process can consistently add value in small cap equity management.
Process
The StoneRidge proprietary quantitative multi-factor model ranks the Russell 2000 Growth universe and then uses those ranks to build an appropriately diversified portfolio. The major factors included in the model are Earnings Momentum, as earnings tend to drive stock prices over time; a Valuation Model designed to evaluate the cost or price being paid for earnings growth across the benchmark universe; a Technical factor focused on the investor supply and demand dynamics for the universe companies in the stock market(s); Insider activity, as those individuals closest to the companies should have the best feel for the current performance and prospects for those companies; and an Accounting and Financial Condition factor designed to evaluate the current financial conditions for the universe companies and the associated trends over time.
A deterioration in rank leads to an automatic sale.
