A Time-Tested Approach Repeatable and Scalable
Founded in 1992, Affinity Investment Advisors has applied its time-tested systematic process to a variety of equity strategies. Its Midcap Core Equity strategy was created in 2010 with a goal of outperforming the Russell Midcap Index.
The objective is to grow capital over the long-term by investing in companies that exhibit undervaluation and improving fundamentals relative to peers. The strategy’s sector profile and market capitalization mirror the weightings of the benchmark.
Affinity believes that systematic investing, which it defines as a process combining elements of quantitative and qualitative investing, is a superior approach. It removes much of the emotion from the decision-making process, a strongpoint of quantitative approaches, but allows for some human judgement, as quantitative-only models can fail to capture all relevant information in real time.
Affinity believes that while equity markets are highly efficient, pockets of inefficiency and security mispricing exist. This is where a systematic, active strategy can add value. Market inefficiencies exist based on behavioral tendencies of investors, and Affinity seeks to exploit these inefficiencies by identifying and investing in attractively valued businesses whose underlying fundamentals are improving. For over 25 years, Affinity has been executing its philosophy in a consistent, disciplined and rigorous manner.
Affinity uses a quantitative model that seeks to objectively identify stocks with the greatest expected outperformance. The model favors attractively valued stocks with improving expectations and positive price momentum and ranks a universe of stocks, assigning each security an “Affinity Score.” The top quartile of stocks, as determined by the score, represents buy candidates. Affinity then employs an overlay to confirm the attractiveness of the companies and to identify possible negative situations that are not reflected in the statistics. Alpha is generated almost entirely from stock selection.
Portfolios are constructed by creating the desired exposures to undervalued securities with positive earnings momentum, while maintaining tight control relative to the benchmark in key areas such as sector exposure, capitalization distribution and beta. The resulting portfolio is sector neutral.
Affinity’s disciplined approach adds value by creating diversified portfolios that allow for low turnover and the flexibility to perform well in different market environments.
The Affinity Investment Advisors Midcap Core Equity strategy is available on the EQIS platform.
If you would like to deploy this strategy, go to the respective client contact and from the Action drop-down menu in the upper right corner, select Change Asset Allocation.
This option is only available for clients who have provided you with trading authorization. If you do not have trading authorization, you can either submit a Limited Power of Attorney signed by the client or use the Client Directed Asset Allocation Form found on the Resources Tab and have the client sign it.
Your EQIS Business Consultant is available to help you implement these changes, or contact Advisor Services at support@EQIS.com or 800-949-9936 and press 2.
The information is believed to be reliable but is not guaranteed by EQIS. EQIS and Affinity Investment Advisors are not affiliated. This is not an offer to buy or sell securities.
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