How are we different?
According to a Morningstar report, over 75% of U.S. equity funds underperform their benchmark. If you ask us why, we think it’s pretty simple: many firms have a similar strategy. We saw this firsthand across our prior professional experiences and believe to outperform the market, you need to differentiate. With our concentrated stock strategy, we combine a unique approach in running a simple long-only portfolio while prioritizing overlooked business fundamentals.
We also stick to what we know. Our security selection is exclusive to equities, and we avoid industries in which we do not have sufficient understanding or expertise. Our asset allocation approach outside of equities relies primarily on passive investing where we believe clients can reach their financial objectives with fewer fees and tax implications while better understanding their investments.
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.”
- Charles Darwin
While the market and constituent companies evolve over time as innovation and investor sentiment progress, so do the investment tools at our disposal. In our view, without adapting one’s investment techniques, outperforming the market becomes incrementally difficult.
The Importance of Culture
We believe the best investments over time have come from a combination of successful business models, high-quality products and services, and consistently improving financials, which all stem from the people in a company. From the executive team to the introductory roles, we think the best companies to invest in are filled with a talented and driven workforce, creating a winning culture and ultimately leading to high performing stocks over time. With this in mind, we have taken culture, a hard to quantify theme, and built a scoring methodology to define an investable universe.
Source: Coast Bridge Capital, December 31, 2023
The culture score is a proprietary metric created by Coast Bridge Capital, which uses publicly available data to quantify and rank the strength of a company’s internal culture. Returns have been bucketed by Culture Score — Bucket 1 represents the highest score, Bucket 5 represents the lowest score. See the ‘Disclosures’ page for more information.
Within our defined universe, we look for the most competitively sound businesses in what we deem to be the most attractive industries. Our thorough research and analysis then focuses on stocks in which we believe intrinsic value is improperly reflected yet still exhibit sustainable growth, improving profitability, and high-quality fundamentals.
Not All Dollars are Meant for Stock Picking
In addition to our stock picking strategy, we provide clients with a low-cost, tax-efficient portfolio to invest their assets in a risk tolerant manner. Using primarily Exchange-Traded Funds (ETFs), we offer clients a simple solution to generate market-like returns.