This go anywhere, all cap fund is managed by the team of Joel Tillinghast and Daniel Dupont. Both managers use their unique individual bottom up stock selection process.
Mr. Tillinghast looks for well-managed, high margin companies with little or no debt that are growing faster than their peers. There also must be sustainable competitive advantages and high levels of free cash flow. He tends to be very well diversified, typically holding between 400 and 500 names.
Mr. Dupont, on the other hand runs a more concentrated book, typically in the 20 to 50 stock range. He uses more of a value focused process that looks for stocks that are significantly undervalued. He likes strong companies with unrealized growth potential, excellent management, and high return on invested capital.
They meet formally monthly to discuss the relative attractiveness of the various investment opportunities available. With this information, they decide which of the managers can most effectively allocate capital in the coming month. Sector mix and geographic exposure is solely the by-product of the stock selection process. Cash is high, currently nearly 50% of the fund, as they seek out quality investment candidates that meet their strict criteria. This could be a drag in a rising market, but will also keep volatility in check. This is one thing I am monitoring closely.
Performance, particularly since 2012 has been very strong, but more impressive, the volatility and downside protection numbers have been stellar. Given the all-cap nature of the fund, I would be reluctant to use it as a core holding, but rather as a compliment to an otherwise well diversified portfolio.