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.