— Christian K. Stadlinger, Ph.D., CFA, Senior Portfolio Manager
The Columbia Small Cap Value II portfolio seeks to deliver capital appreciation and income through an actively managed portfolio of small-capitalization company stocks. Our management team combines fundamental and quantitative analysis with risk management techniques to construct a portfolio of undervalued, misunderstood small-sized companies whose stocks may deliver superior performance over time.
- Seasoned, stable team has managed successfully through varied market environments
- Focus on value companies with upward inflection has resulted in strong historical investment performance
- Robust view of risk has led to consistent risk-adjusted returns
Investment ProcessDefine and evaluate investable universe: 150 stocks
Concentrate on U.S. companies in the Russell 2000 Value Index and answer the following two questions
- Where are the values? What are the cheapest 40% by P/E and cheapest 20% by P/B, P/S or P/CF?
- Which values have upward inflection? Team reviews industry-specific scores, improving prospects and proprietary metrics.
Identify inexpensive stocks exhibiting positive fundamental improvement
- Focus on three types of value opportunities: company-specific normalized earnings, out-of-favor industries and out-of-the-limelight companies
- Search for inexpensive stocks on the path to improvement
Determine risk budget and allocate risk to maximize alpha
- Thorough understanding of risk allows the team to assess risk and allocate it to stock selection
- Eliminate unintended bets, increase consistency of return and ensure style integrity