- Access to undervalued dividend-paying stocks
- 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 Large-Cap Value managed account portfolio may be a beneficial 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 control. To temper the risks associated with equity investing, NFJ maintains broad industry diversification and requires that each stock in its Large-Cap Value portfolios pay a dividend—a characteristic they believe is an important sign of financial stability.
DISCIPLINED INVESTMENT PROCESS
NFJ's investment process enables it to identify stocks offering attractive valuations and superior long-term growth potential. At the same time, the process seeks to control total portfolio risk.
- Screen for positive fundamentals—Apply a screen for positive fundamental characteristics to a universe of approximately 400 stocks.
- Conduct in-depth research and analysis— Research each of the remaining possible investments, looking for companies with low price-toearnings multiples, a dividend yield, and positive prospective earnings, among other factors.
- Restrict industry concentrations—Avoid overexposure to any one sector by restricting the number of stocks held in a single industry.
- Construct model portfolio—Select approximately 40–80 of the most attractive securities identified, diversified across industries. Each holding pays, or is expected to pay, a dividend.
- 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 lower price-to-earnings ratio, and/or a higher dividend yield, as well as other qualitative metrics.