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U.S. Large Cap Select

The U.S. Large Cap Select strategy is a concentrated strategy that starts with Russell 1000 constituents then adjusts for risk, accounting manipulation and quality. It seeks to buy high quality companies at value prices. To overcome the inadequacies of GAAP accounting, financial statements are recast to reflect intangible investments made through the income statement. Proprietary measures of economic profit and quality are use in the valuation process.

Fact Sheet Strategy History and Details

Multi-Horizon Returns

15.7%
15.4%
15.1%
17.9%
17.3%
10.3%
26.8%
25.6%
22.0%
29.5%
28.2%
20.5%
26.7%
25.4%
12.7%
32.4%
31.1%
20.2%
QTDYTD1YR 3YR5YRITD
  QTD YTD 1YR 3YR 5YR ITD
Large-Cap Select (Gross) 15.70% 17.85% 26.81% 29.45% 26.66% 32.43%
Large-Cap Select (Net) 15.42% 17.27% 25.55% 28.17% 25.40% 31.12%
Russell 1000 Index 15.13% 10.32% 22.01% 20.47% 12.66% 20.23%
Excess (Net) +0.29% +6.95% +3.54% +7.70% +12.75% +10.89%

Sector Positioning

  Portfolio Benchmark  
Information Technology 50.4% 36.2%
Health Care 29.5% 9.1%
Communication Services 10.8% 9.4%
Consumer Staples 5.6% 4.4%
Financials 3.1% 12.0%
Consumer Discretionary — 9.4%
Energy — 3.0%
Industrials — 10.0%
Materials — 2.1%
Real Estate — 2.1%
Utilities — 2.2%
Cash & Other 0.7% 0.0%

Portfolio Characteristics

  Portfolio Benchmark
# of Securities 16 1,026
Active Share 99.7% —
Wtd Avg Mkt Cap $14.4B $79.6B
Median Mkt Cap $11.2B $17.2B
Gross Margin 75.7% 50.6%
EBIT Margin 17.1% 26.5%
ROIC 19.5% 25.1%
P/E 20.7x 25.2x
P/CF 11.6x 18.6x
FCF Yield 8.0% 2.8%
Net Debt/EBITDA -4.9x 1.3x

Top 5 Holdings

EXEL Exelixis, Inc. 11.87%
PINS Pinterest, Inc. Class A 10.79%
LNTH Lantheus Holdings Inc 9.08%
CRUS Cirrus Logic, Inc. 8.74%
INCY Incyte Corporation 8.52%
Top 5 Total 49.00%

The U.S. Large Cap Select strategy is a concentrated strategy that starts with Russell 1000 constituents then adjusts for risk, accounting manipulation and quality.  It seeks to buy high quality companies at value prices.  To overcome the inadequacies of GAAP accounting, financial statements are recast to reflect intangible investments made through the income statement. Proprietary measures of economic profit and quality are use in the valuation process. 

The U.S. Large Cap Select strategy is a concentrated strategy that starts with Russell 1000 constituents then adjusts for risk, accounting manipulation and quality. It seeks to buy high quality companies at value prices. To overcome the inadequacies of GAAP accounting, financial statements are recast to reflect intangible investments made through the income statement. Proprietary measures of economic profit and quality are used in the valuation process.

CHARACTERISTICS

Characteristics HBCM Large Cap Select Composite iShares Russell 1000 ETF
# of Securities 15 1,012
Active Share 97.20 0.00
Price/Earnings 19.99 27.68
Price/Cash Flow 13.00 18.71
Gross Margin 67.72% 52.43%
Operating Margin 19.81% 26.99%
ROIC 13.27% 20.53%
Net Debt/EBITDA -0.77 1.38
FCF Yield 5.75% 2.78%

SECTORS (% PORTFOLIO)

Information Technology 38.46%
Health Care 38.21%
Communication Services 9.83%
Consumer Discretionary 7.32%
Financials 4.85%
*Excludes Cash

TOP HOLDINGS (% OF PORTFOLIO)

Incyte Corporation 11.90%
Exelixis, Inc. 10.69%
Cirrus Logic, Inc. 10.38%
Meta Platforms Inc Class A 9.83%
Zoom Communications, Inc. Class A 8.37%

MARKET CAP

Weighted Average Market Cap (B) $49.08
Median Market Cap (B) $4.10
Large Cap 13.46%
Mid Cap 33.38%
Small Cap 51.82%

PERFORMANCE

Growth of $1,000,000

$5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 Mar '20 Jun '20 Sep '20 Dec '20 Mar '21 Jun '21 Sep '21 Dec '21 Mar '22 Jun '22 Sep '22 Dec '22 Mar '23 Jun '23 Sep '23 Large Cap Select - Net Russell 1000 Index

Annualized Returns

35% 30% 25% 20% 15% 10% 5% 0% QTR 1 YR 3 YR 5 YR Since Inception*
QTR 1 YR 3 YR 5 YR Since Inception*
0.66% 14.15% 28.40% 26.91% 30.52%
2.41% 17.35% 22.73% 13.59% 20.10%

Performance is presented net of a model investment management fee of 1% and is based on HBCM’s Large Capitalization Composite.

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