NFJ Concentrated Value Portfolio provides higher return potential with commensurate risk by investing in a select group of stocks that the manager believes are undervalued. Due to its heavy concentration in a small number of securities and ability to hold a high percentage of cash, the use of this portfolio should be limited to a small percentage of an investor’s assets.
Disciplined Value Management
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 participates in the investment process, serving as portfolio manager and securities analyst. This team approach means that broader resources are committed to portfolio construction.
Model Portfolio Specifics
NFJ will generally hold between 5-15 stocks in the model portfolio. However, the manager has the ability to keep a significant percentage of the portfolio in cash. Concentrated Value limits its investment universe to stocks that are held in the NFJ All-Cap Value Strategy. Each holding pays, or is expected to pay, a dividend. Companies are selected with low price-to-earnings multiples, a dividend yield, and positive prospective earnings, among other factors.
As with any non-diversified portfolio, Concentrated Value entails significant risks that an investor should understand prior to investing. Two primary risks are above-average stock specific risk and the ability to hold a high percentage of cash which can create timing risks. In addition, the Portfolio’s sector positioning and returns can diverge greatly from the benchmark and other NFJ portfolios over both short and long time periods.