Investment Process

Hillcrest’s investment process uses a complementary blend of quantitative behavioral screens and rigorous fundamental analysis to integrate Behavioral Finance insights. Key elements of our investment process include:

  • Behavioral flaws are avoided by constructing portfolios using current information, not past statistical relationships (i.e. optimizers).

  • Factors that do not generate alpha are neutralized by only taking significant deviations from the strategy benchmark in stock-specific factors that we are confident will generate outperformance.

  • Portfolio risk is controlled by actively monitoring and managing sector weights, stock weights, characteristics and common factors to the strategy index.

  • Both internal risk control guidelines and client-specific restrictions are strictly followed when managing portfolios.

A brief summary of our investment process is below.