03/27/2014

Individual Stock Selection

by

Individual stock selection and active management are strategies that returned to prominence recently, according to a March 9, 2014 Wall Street Journal article.  “After years of moving in lock step on the back of global economic shocks, individual stocks increasingly have been dancing to their own tune” as evidenced by the steep decline seen in correlations1 between individual stocks in the S&P 500 since the financial crisis.

S&P Dow Jones Indices looks at active management from a different perspective in their S&P Indices Versus Active Funds or SPIVA Scorecard, which evaluates the performance of active versus passive management across multiple categories.  Through year-end 2013 their SPIVA Scorecard reported that, for the one-year period, 63% of funds in the Mid-Cap Growth category and 62% of funds in the Multi-Cap Growth category outperformed their benchmarks – the only two out of twelve style-specific equity categories to outperform passive strategies by such a wide margin over the 1-year period.  Those one-year results were not matched in any of the twelve categories over 3- and 5-year periods.2

Aquila Three Peaks Opportunity Growth Fund employs a fundamental investment strategy focused on measures of corporate performance and balance sheet improvement – characteristics that we search for and evaluate, one company at a time.

“We believe that we take a unique approach to selecting equity investments”, said Sandy Rufenacht, Co-Portfolio Manager.  “We have a long history of conducting research in the high-yield corporate bond market, and investing in high-yield issuers when our research indicates they are successfully and prudently managing leverage and the corporate balance sheet. The characteristics we look for in high-yield debt issuers have helped us identify opportunities for improvement in the equity performance of those companies.  Our experience, research, and strategy in the high-yield debt market is the foundation on which we built the strategy of Aquila Three Peaks Opportunity Growth Fund”.

Take a closer look at the individual stock selection approach of Aquila Three Peaks Opportunity Growth Fund – you may find it is just what you were looking for.

 

1Correlation:  A statistical measure of the movements of two securities in relation to each other.  If perfectly correlated, two securities will move up or down to the same degree and in the same direction. 

2Past performance does not guarantee future results.  An investment cannot be made directly in an index.

Before investing in the Fund, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund prospectus. The prospectus is available on this site, from your financial advisor and when you call 800-437-1020.

Investment Considerations: Mutual fund investing involves risk; loss of principal is possible.  An investment involves certain risks including market risk, financial risk, interest rate risk, credit risk, and risks associated with investments in highly-leveraged companies, lower-quality debt securities, foreign markets and foreign currencies, and potential loss of value.