Allocation Across Market Caps

Portfolio construction for diversified portfolios in a highly correlated world.

North Square Investments believes there are client portfolio benefits for financial advisors and consultants to use All Cap equity strategies.

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Here are three major reasons:

1. All Cap strategies focus on emerging blue chip companies

• This allows portfolio managers flexibility to stay invested in growing equities as the move across the market cap spectrum
• This may benefit clients who are:
  • Investing over a long-term time horizon
  • Seeking capital appreciation

2. All Cap equity strategies are the new Large Cap strategies:

• All Cap equity strategies may be classified as large cap but seek additional returns with small and mid-cap equities.
• Even so, All Cap strategies have a comparable risk profile to large cap strategies
• This may benefit clients who are:
  • More risk conscious and loss averse
  • Overweight in their large cap equity allocation

3. An All Cap equity strategy can act as a core portfolio holding from a single asset manager:

• All Cap strategies are easy to implement and the model can be used across client types
• All Cap strategies don’t sacrifice more strategic or tactical allocation to other investment strategies
• Provides a blended total return between small, mid and large cap equities
• This may benefit clients who have:
  • Behavioral biases that often influence investment decisions
  • Limited portfolio size

Next Steps:

Review existing client portfolio allocations to large cap equities. If there is an opportunity to re-allocate in the portfolio, consider an All Cap strategy from existing large or small cap equity positions, depending on risk aversion.