Atlanta Capital High Quality Calvert Equity

Overview
Investment Approach
Investment Professionals

Overview

Strategy Facts

Capability:	Active Fundamental Equity
Strategy Inception:	October 1998
Benchmark:	Russell 1000® Growth Index

Strategy Facts

Capability:	Active Fundamental Equity
Strategy Inception:	October 1998
Benchmark:	Russell 1000® Growth Index

Summary

The High Quality Calvert Equity strategy is guided by a large-cap growth, responsible investing discipline managed in partnership with Calvert Research and Management that seeks to invest in companies with a demonstrated history of consistent growth and stability in earnings with equities selling below intrinsic value.

Investment Approach

Philosophy

We seek to invest in companies with a demonstrated history of consistent growth and stability in earnings in an effort to outperform over the long term by participating in rising markets and minimizing participation in declining markets. The strategy is managed with a fundamental, bottom up process, seeking to identify high quality growth businesses that operate in a manner consistent with the Principles for Responsible Investment of Calvert Research and Management.

Differentiators

Long-term definition of quality

Our approach identifies quality based upon the historical consistency and stability of earnings growth over the past ten years and not just a point in time. This long-term lens results in a stable universe we know very well. We believe our search for consistent compounding companies will reduce volatility and risk.

Consistent Earnings Growth

We seek companies that provide long-term growth opportunities. This growth is typically supported by secular tailwinds, long product life cycles, and increasing market share. These business models typically maintain dominant franchises with enduring competitive advantages, high barriers to entry and pricing power. We have a bias towards business models that generate predictable and recurring revenues and strong, sustainable free cash flows.

Long-term Investors

As patient investors, we use time to our advantage, with the goal of building wealth over time. This enables us to buy good businesses at reasonable valuations and allows our investment thesis to develop.

Minimize Downside Participation

The objective of the high quality philosophy is to participate in rising markets and preserve capital in declining markets. By avoiding a volatile pattern, especially in down markets, the power of compounding becomes even stronger and provides greater long-term wealth.

Investment Process

	Focus on companies with dominant franchises, consistent growth, and stability in earnings.
	Conduct fundamental analysis to determine the long-term competitive advantages and secular tailwinds for sustainable earnings growth.
	Construct diversified portfolios of companies with a multi-year investment horizon, purchased when they are priced attractively relative to our estimate of intrinsic value.
	Sell a company if a more compelling opportunity materializes, a change in investment thesis or deteriorating fundamentals, or valuation becomes excessive.

Investment Professionals

Joseph B. Hudepohl

Managing Director

27 years industry experience

Lance V. Garrison

Managing Director

24 years industry experience

Robert R. Walton, Jr

Executive Director

30 years industry experience

Peggy Taylor, CFA

Executive Director

30 years industry experience

Jeffrey A. Miller

Managing Director

28 years industry experience

RISK CONSIDERATIONS

Equity: The value of investments held by the Strategy may increase or decrease in response to economic, and financial events (whether real, expected or perceived) in the U.S. and global markets. The value of equity securities is sensitive to stock market volatility.

There is no guarantee that any investment strategy will work under all market conditions, and each investor should evaluate their ability to invest for the long-term, especially during periods of downturn in the market.

A separately managed account may not be appropriate for all investors. Separate accounts managed according to the Strategy include a number of securities and will not necessarily track the performance of any index. Please consider the investment objectives, risks and fees of the Strategy carefully before investing. A minimum asset level is required.

For important information about the investment managers, please refer to Form ADV Part 2.

The views and opinions and/or analysis expressed are those of the author or the investment team as of the date of preparation of this material and are subject to change at any time without notice due to market or economic conditions and may not necessarily come to pass. Furthermore, the views will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring, after the date of publication. The views expressed do not reflect the opinions of all investment personnel at Morgan Stanley Investment Management (MSIM) and its subsidiaries and affiliates (collectively “the Firm”), and may not be reflected in all the strategies and products that the Firm offers.

OTHER CONSIDERATIONS

The indexes are unmanaged and do not include any expenses, fees or sales charges. It is not possible to invest directly in an index. Any index referred to herein is the intellectual property (including registered trademarks) of the applicable licensor. Any product based on an index is in no way sponsored, endorsed, sold or promoted by the applicable licensor and it shall not have any liability with respect thereto.

The Russell 1000® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000® Index is an index of approximately 1,000 of the largest U.S. companies based on a combination of market capitalization and current index membership.

The information presented represents how the portfolio management team generally implements its investment process under normal market conditions.

Atlanta Capital is part of Morgan Stanley Investment Management. Morgan Stanley Investment Management is the asset management division of Morgan Stanley.