SMID Cap Core Strategy

Fact Sheet Commentary

Quality is the foundation of the Johnson Asset Management investment approach. We believe that high-quality companies will outperform over the long run. The SMID Cap Core Equity strategy is comprised of high-quality small and mid cap stocks with favorable valuation and momentum characteristics. The team performs fundamental bottom-up research aided by a proprietary quantitative assessment to construct a portfolio that seeks to consistently outperform its benchmark over a full market cycle with downside protection and reduced volatility.

Strategy Overview

The Johnson SMID Cap Core Equity strategy seeks to consistently outperform the Russell 2500 Index over a full market cycle with downside protection and reduced volatility. We utilize a disciplined portfolio construction framework relying on fundamental bottom-up research aided by our proprietary quantitative assessment.

Investment Philosophy

Historical evidence supports our belief that high-quality companies outperform over the long run with reduced volatility and greater downside protection in turbulent markets. In addition, combining quality with valuation and momentum factors can improve investment results, leading to higher batting averages and superior risk-adjusted returns over time. Finally, supporting our fundamental bottom-up research with quantitative analysis results in a more disciplined investment process, superior risk management, and more consistent performance.

Portfolio Overview

Starting from a market cap range of $400M-$20B, our team constructs a diversified portfolio of 70-90 small & mid cap stocks utilizing a disciplined, multi-step investment process designed to manage risk and generate alpha. With a focus on quality, our portfolio is expected to outperform the Russell 2500 over a full market cycle with downside protection and reduced volatility.

Investment Guidelines

  • Benchmark: Russell 2500
  • U.S. SMID-cap equities ($400M–$20B market cap)
  • Diversified portfolio of 70–90 holdings
  • Objective: Outperform Russell 2500 with lower volatility
  • Emphasize quality, valuation, and momentum
  • Expected turnover below 50% annually
Brian Kute
Meet the Portfolio Manager

Brian T. Kute, CFA

Brian has been a part of Johnson Investment Counsel since 1994, and has since become the Managing Director of Research. He is a shareholder of the firm and holds the Chartered Financial Analyst® (CFA®) designation. Prior to joining the firm, Brian worked for Gradison-McDonald.

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Fixed Income

We implement our proprietary Quality Yield investment approach across our suite of duration mandates with the objective of outperforming the market while maintaining a focus on downside risk management and comparable volatility.

Equity

Johnson Asset Management offers both enhanced return index capabilities and active equity solutions. We implement a repeatable and disciplined process that seeks to optimize return per unit of risk.

Mutual Funds

Johnson Asset Management’s Fixed Income and Equity solutions are accessible through our competitively priced mutual funds, which we have been providing institutional clients since 2000.

Disclaimer:

Important Information

Johnson Asset Management ("JAM") is a division of Johnson Investment Counsel, Inc. ("JIC"), an SEC-registered investment adviser. Registration does not imply a certain level of skill or training.

This information is provided for informational purposes only and should not be construed as investment advice or a recommendation to buy or sell any security. Any investment decision should be made based on an investor's individual objectives, financial circumstances, and risk tolerance.

All investments involve risk, including the possible loss of principal. Past performance does not guarantee future results.

Portfolio holdings, characteristics, allocations, and investment guidelines are subject to change without notice and may differ for individual client accounts.

For additional information regarding the strategy, including investment objectives, risks, fees, benchmark information, performance disclosures, and composite-related information, please refer to the applicable strategy fact sheet and commentary.