Opportunity Equity

A Strategy Focused on High Returns

Why an Unconstrained, Actively Managed Equity Strategy?

Attempting to Outperform: Investing in a broad market-derived ETF guarantees that an investor will underperform the benchmark index due to fees.  If an investor doesn’t want to spend significant time navigating the vagaries of the market, investing in an actively managed strategy provides the opportunity to achieve outperformance.

Recognize Expertise: Selecting an active manager can be challenging.  It’s important to look at a manager’s performance history over various market cycles, and the longer the history, the better.

Capitalize on a Broad Opportunity Set: We look well beyond the benchmark and operate outside of the traditional style box, seeking to find market inefficiencies wherever they exist.  Theoretically, the flexibility to migrate to the best opportunities should allow us to generate better returns, if our valuation judgments turn out to be correct.

Why Opportunity Equity?

Remain Patient: As an even larger market contingency focuses on timing investments exactly right to the next quarter, month or even minute, the ability to think long-term creates significant “time-arbitrage” opportunities.  We are patient, long-term value investors.  We believe our ability to think in terms of years provides us significant advantages.

Demonstrate Valuation Expertise: Valuation has been at the heart of our investment approach since Bill Miller started managing money in 1982.  We combine academic, theoretical and practical approaches to valuation.  Developing an in-depth understanding of valuation, including corporate strategy, investor behavior and capital allocation is central to our process.

Be Different: We focus on investing, not the benchmark, which is why our portfolio typically doesn’t look anything like the benchmark.  Academics call this high active share1, and we believe it gives us a greater opportunity to outperform. The benchmark provides a limited pool of investment possibilities, so we invest beyond that and concentrate where we see the greatest values.

Align Interests: We have significant investments in the strategy, alongside investors.

Why Now?

Seek Upside: Opportunity Equity’s portfolio is positioned in a differentiated, offensive way, and looks to provide upside.  Though the market and strategy are near all-time highs, we still see plenty of attractive investment opportunities.

Diversify Holdings: Since the recent financial crisis, low volatility and defensive strategies have been in favor. However, diversification works both ways. Investors should balance their portfolios with a manager focused on maximizing upside.

Understand Value, not Time: Timing a purchase or a sale perfectly is virtually impossible, but earning attractive returns is not. We make portfolio decisions based on our assessment of fair value for our holdings, always keeping the long-term goal in perspective.

How to Invest

Investment Options: We have options for all types of investors. Have questions? Contact us. We’re happy to help.

Institutional Separate Account – Call us 410.454.3130 or email us.

Mutual Fund for U.S. Investors

Opportunity Equity Data — 1Q 2017

All data as of 3/31/2017

Investment Minimum: $50 million

Annualized Performance2

  • Gross of Fees
  • Net of Fees
  • S&P 500

 

QTD

1-Year

3-Year

5-Year

10-Year

Since Inception (12/31/1999)

Gross of Fees

7.40%

21.73%

5.81%

18.94%

4.22%

7.59%

Net of Fees

7.14%

20.55%

4.77%

17.78%

3.18%

6.53%

S&P 500

6.07%

17.17%

10.37%

13.30%

7.51%

4.82%

Equity Sector Breakdown3

  • Financials 23.30%
  • Consumer Discretionary 23.23%
  • Information Technology 17.68%
  • Health Care 17.52%
  • Industrials 12.21%
  • Materials 4.82%
  • Limited Partnership 1.24%
  • Energy 0.00%
  • Telecommunications Services 0.00%
  • Consumer Staples 0.00%
  • Utilities 0.00%
  • Real Estate 0.00%

Market Capitalization Breakdown3

  • Greater Than $50B 24.89%
  • $15B to $50B 14.68%
  • $3B to $15B 31.25%
  • Less Than $3B 29.17%

Top 10 Holdings By Issuer3

  • RH 6.22%
  • Apple Inc. 5.96%
  • Platform Specialty Products Corp. 5.25%
  • Amazon.com, Inc. 5.21%
  • OneMain Holdings, Inc. 4.64%
  • Lennar Corporation 4.59%
  • Delta Air Lines, Inc. 4.55%
  • United Continental Holdings, Inc. 4.49%
  • PulteGroup, Inc. 4.40%
  • American Airlines Group, Inc. 4.27%

Characteristics3

  • Number of Holdings 35
  • Active Share 105%
  • 12-Month Forecast P/E 14.0
  • P/S 1.3
  • P/B 1.9
  • Estimated 3 − 5 Year EPS Growth 12.5%
  • Weighted Average Market Cap (billion) $59.52
  • Annual Turnover 36.52%
The nature of financial markets is such that when the overwhelming consensus is on one side, the investment opportunities usually lie on the other. Bill Miller, CFA December 1992