Fundamental Tilt Explained: A Wall Street Transcript Interview with Geoffrey Gerber, Founder, President and Chief Investment Officer of TWIN Capital Management, Inc.
67 WALL STREET, New York - October 10, 2013 - The Wall Street Transcript has just published its current Investing Strategies Report. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Long-Term Investing - Value Investing - Investment Strategies
Companies include: S&P 500 (SPY) and many others.
In the following excerpt from the Investing Strategies Report, an experienced money manager discusses his investment methodology:
TWST: Please introduce TWIN Capital Management to readers with some history and an overview of the firm today.
Mr. Gerber: TWIN Capital was founded in 1990, and our first product was a long/short equity market-neutral strategy. In 1995, we began successfully managing long-only portfolios. We currently manage six long-only strategies, and we continue to manage a long/short equity market-neutral product. All of our current strategies employ large- and mid-cap domestic stocks. In the fourth quarter we plan to launch our newest strategy, a small-cap core active product that's designed to outperform the Russell 2000.
Our client base is institutional, including public and corporate pension plans, foundations and endowments, Taft-Hartley plans, mutual funds and other pooled vehicles. A major advantage to clients is the longevity of the TWIN investment team. We've worked together since 1999, and not only has TWIN been fortunate with the steadiness of our investment team, but we've also been fortunate to have the opportunity to enjoy some of our client relationships over a long period of time. Some of our clients have even been with TWIN since 1995. TWIN's goal is to remain a boutique investment management firm, focusing on research and improving the investment performance for our clients. That's an overview of TWIN and who we are.
TWST: Tell us about your approach to investment management, including your "Fundamental Tilt."
Mr. Gerber: In terms of investing, we seek to systematically identify measurable indicators of investor behavior as they relate to equity returns. We've created our own proprietary research database, plus the back-testing portfolio management and trading systems that drive our investment process. Our investment process consists of a stock selection model and Fundamental Tilt, which you mentioned. The stock selection process is based on models of valuation, growth and quality, and together these models are combined to produce relative rankings of expected returns for stocks. Stocks with higher expected returns become potential purchase candidates, while stocks with negative expected relative returns are potential sale candidates.
After we run our model, we look to apply TWIN's proprietary Fundamental Tilt. You can think of Fundamental Tilt as TWIN's trademark method of tilting our portfolios towards certain market factors and risk levels...
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