Disclosure Notes

 

The London Company was founded in 1994 in Richmond, Virginia and provides equity portfolio management services to pension, profit-sharing, foundation, corporate, investment companies, and individual investors. The firm, which is majority employee-owned, is an independent, autonomous investment management organization. The London Company of Virginia is a registered investment advisor. Registration does not imply a certain level of skill or training. More information about the advisor, including its investment strategies, fees and objectives are more fully described in the firm’s Form ADV Part 2, which is available upon request by calling 804.775.0317, or can be found by visiting www.TLCadvisory.com.

 

Past performance should not be taken as a guarantee of future results. The report is for informational purposes only. Data, while obtained from sources we believe to be reliable, cannot be guaranteed, and all statistics are subject to change. The statements contained herein are solely based upon the opinions of The London Company and the data available at the time of publication of this report, and there is no assurance that any predicted results will actually occur. Information was obtained from third party sources which we believe to be reliable but are not guaranteed as to their accuracy or completeness. This report contains no recommendations to buy or sell any specific securities and should not be considered investment advice of any kind. In making an investment decision individuals should utilize other information sources and the advice of their investment advisor.

 

Investment Metrics – Market Factor Methodology

 

To calculate the relative return of any single factor, analysis starts by creating a single factor portfolio. To create the single factor portfolio, equity securities in the selected region are sorted in descending order according to a single equity factor (eg. Book to Price). At the beginning of a calendar month, securities are selected for the single factor portfolio by starting at the top of this sorted list and accumulating securities until the aggregate market cap of the single factor portfolio equals 50% of the total region market cap. This effectively provides a “top half” of the market by the single factor (eg. the cheapest stocks according to Book-to-Price).* The set of securities are held until the end of the calendar month. The one month performance of that single factor portfolio is then measured versus the entire market. The same construction process is performed each month, and the consecutive monthly returns are appropriately linked together to provide cumulative factor performance measures across different time frames. This process is repeated using each of the different factors and the results are aggregated together. Applying the consistent process across factors allows relative comparisons of the outperformance or underperformance of the various factors within a single region.

 

For more information about Investment Metrics’ methodology or factor definitions, please contact The London Company’s Marketing & Client Service team at 804.775.0317 or info@TLCAdvisory.com.

 

*Market Cap = Top 70% of Market