- Access to growth potential of undervalued stocks across all capitalizations
- Managed by experienced value specialists
- Risk-averse investment philosophy
- Disciplined, pure value process
Process & Philosophy
POTENTIAL OF UNDERVALUED STOCKS
Investors often focus on a few high growth sectors, allowing strong opportunities in other industries to go unnoticed. NFJ's All Cap Value managed account portfolio is a smart way to invest in these undervalued stocks.
NFJ Investment Group has a strong track record and consists of a team of managers dedicated to a pure, deep value approach to equity investing. Each of these professionals participate in the investment process, serving as portfolio manager and securities analyst. This team approach means broader resources are committed to portfolio construction.
NFJ adheres to a strict value philosophy, seeking undervalued, fundamentally sound companies. What sets the firm apart from other value-oriented managers is its emphasis on risk management. To temper the risks associated with equity investing, NFJ maintains broad industry diversification and requires that each stock in its All Cap Value portfolios pay a dividend-a characteristic they believe is an important sign of financial stability.
DISCIPLINED INVESTMENT PROCESS
NFJ adheres to a strict, research-driven investment process, seeking to invest in stocks offering attractive valuations and superior long-term growth potential, at reasonable risk levels.
- Screen NFJ portfolios—Review the holdings in four NFJ portfolios: Dividend Value; Large-Cap Value; Mid-Cap Value and Small-Cap Value. The holdings in these portfolios have already satisfied NFJ’s investment criteria, including low price-to-earnings multiple, a dividend yield, and positive prospective earnings, among other factors.
- Restrict industry concentrations and analysis— Avoid overexposure to any one sector by restricting the number of stocks held in a single industry.
- Construct model portfolio—The portfolio managers seek to identify attractive securities within each market capitalization range and select approximately 35–60 securities for the model portfolio. Although the portfolio will normally have some exposure to small, medium and large capitalization companies, the portfolio managers reserve the flexibility to vary the portfolio’s relative weighting to each capitalization range.
- Regularly monitor for buy and sell candidates— Continually repeat the research process to identify new buy and sell candidates. Sell a stock when an alternative stock with equally strong fundamentals demonstrates a substantially higher dividend yield or a substantially lower valuation.