MID-LARGE CAP

EQUALLY WEIGHTED VALUE INVESTING

An asset management and investment advisory company specializing in the development and management of equity security portfolios.

INVESTMENT PROCESS

WHAT WE DO

Resource Capital Management, LLC

Resource Capital Management, LLC is an asset management and investment advisory company specializing in the development and management of equity security portfolios. The Company utilizes a proprietary financial model employing a unique value approach to stock selection and portfolio construction.

FIRM OBJECTIVE

The Resource Capital strategy seeks to achieve capital appreciation and outperform key indices on an annual basis through value investing. Resource Capital’s slow and steady investment discipline strives to create both short-term and long-term value.

PORTFOLIO POSITIONING
  • GRAHAM & DODD
  • CORE EQUITY
  • DIVERSIFIED
  • EQUALLY WEIGHTED
  • QUANTITATIVE
  • SMART BETA
  • TAX EFFICIENT
PHILOSOPHY

The Firm has developed a proprietary investment strategy which is based on selecting companies displaying a quality business model undergoing a persistent steady improvement. Companies undergoing such change:

  • Are underappreciated by the market.
  • Have the ability to generate persistent outperformance.

The Firm’s slow and steady investment discipline strives to create both short-term and long-term value.  Improving operating metrics which deliver profitability and balance sheet improvements will ultimately be rewarded by the market over time for the following reasons:

  • The Firm’s research indicates that companies which can effectively implement such operating improvements have the opportunity to not only create short term but also long term value for shareholders.
  • Improvements in balance sheet and capital structure are keys to identifying investment opportunities which can create and maintain long term shareholder value.
FACTORS UTILIZED TO CONSTRUCT THE PORTFOLIOS

The Firm’s investment model utilizes single and broad fundamental factors to select the stocks of companies for the Resource Capital 60 Long Portfolio. The objective of utilizing the single and broad fundamental factors is to uncover companies that are improving operationally, that are valued fairly and that have measurable liquidity. The Firm utilizes the single and broad fundamental factors to determine the following:

  • Identify whether a company has a solid business model from the perspective of key success metrics such as revenues, margins, and cash generation.
  • Identify positive changes in a company’s income statement which drive balance sheet and capitalization structure improvements.
PORTFOLIO CONSTRUCTION PROCESS

A total universe comprised of approximately 3500+ companies is filtered to eliminate non-qualifying securities. The remaining companies are ranked and sorted within narrow GICS Sectors utilizing single and broad factors. Based upon the model ranking process, the stock of a company is either included or excluded from the Resource Capital 60 Long Model Portfolio. Sector exposure is broadly diversified and equally weighted. Individual securities are equally weighted as well.

WHY INVEST IN THE RESOURCE CAPITAL STRATEGY?

The Firm has developed a unique value investment strategy that attempts to include operationally improving companies in a value portfolio before the market effectively identifies these operational improvements.  The security identification and portfolio construction processes employed by the Firm make the strategy unlike other quantitative and fundamental approaches.  In a dynamic economy and marketplace, there are always a select few companies which are able to improve their operational efficiencies and thereby drive improvements in their capital position. When the market identifies these improvements, these companies may be poised to exceed expectations and thus have an opportunity to outperform the market.

KEY DIFFERENTIATORS

The Firm’s strategy is really simple:

  • Good companies getting better.

The Firm’s strategy is a unique and disciplined way of identifying portfolio holdings:

  • The universe analysis and subsequent portfolio development and construction processes are deeply rooted in proprietary Cash Flow Analytics.

What the Firm’s strategy is not:

  • No Reliance on Optimization
  • Does not use Regression
  • Not another Value Momentum Anomaly

What the Firm’s strategy is:

  • Identifies persistent change that other market participants are slow to pick up on or perceive

INVESTMENT PROCESS

Universe of Securities traded on North American Exchanges

Securities remaining after undergoing Resource Capital’s universe limitation process

Securities ranked and sorted into 20 GICS sectors by Resource Capital Model

The Resource Capital Long 60 Portfolio is comprised of 55 to 60 stocks which rank as the top 3 securities from each sector

PERFORMANCE

Resource Capital Model Portfolio Performance

Please see Performance Disclosures  provided at the end of this webpage.

2010 Performance

RC Long 60 Model

  • 2010 RC Model Long 60 34.54%
  • 2010 Russell 1000 Value Index 15.50%
  • 2010 Russell 1000 Index 16.11%
  • 2010 S&P 500 TR 15.06%

2011 Performance

RC Long 60 Model

  • 2011 RC Model Long 60 16.11%
  • 2011 Russell 1000 Value Index .38%
  • 2011 Russell 1000 Index 1.51%
  • 2011 S&P 500 TR 2.11%

2012 Performance

RC Long 60 Model

  • 2012 RC Model Long 60 40.61%
  • 2012 Russell 1000 Value Index 17.51%
  • 2012 Russell 1000 Index 16.42%
  • 2012 S&P 500 TR 16%

2013 Performance

RC Long 60 Model

  • 2013 RC Model Long 60 47.99%
  • 2013 Russell 1000 Value Index 32.52%
  • 2013 Russell 1000 Index 33.12%
  • 2013 S&P 500 TR 33.39%

2014 Performance

RC Long 60 Model

  • 2014 RC Model Long 60 16.97%
  • 2014 Russell 1000 Value Index 13.43%
  • 2014 Russell 1000 Index 13.23%
  • 2014 S&P 500 TR 13.69%

2015 Performance

RC Long 60 Model

  • 2015 RC Model Long 60 1.26%
  • 2015 Russell 1000 Value Index -3.94%
  • 2015 Russell 1000 Index 0.78%
  • 2015 S&P 500 TR 1.41%

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