What’s your plan in 2025?
Serve your clients better with NEW CooksonPeirce Strategies.
New Strategies for a New Cycle:
3 Reasons Why This Matters Now
Things are changing in the market. And with the launch of our new strategies, here’s how you can participate.
#1 – A TREND EMERGES?
- Last 15 years: Large and mega cap dominance; growth dominance
- All market cycles and regimes eventually yield to a new regime
- With a resilient economy and a normalized interest rate environment on the horizon, we believe the new trend toward small/mid cap stocks and cyclical value stocks will more prominently emerge in the coming years
Stay tuned for our in-depth research on this topic, but for now, we believe it is important to watch this trend closely, and act now.
#2 – THE DIFFERENT AND UNCORRELATED FLAVORS OF MOMENTUM
Momentum works. But it’s not a one-trick pony that works the same way and to the same magnitude in every market segment. Using momentum smartly means using it in diverse ways in different strategies.
“The driving force of our research has been to understand momentum in all of its complexity and all of its nuances, and understand how to use it in different ways within different subsets of the market.”
-Luke O’Neill, Director of Investments, COOKSONPEIRCE
#3 – POTENTIAL FOR ENHANCED CLIENT OUTCOMES
From aggressive to conservative, we now offer a FULL SUITE of solutions to be able to handle all a client’s needs.
We believe this could be a benefit for both advisor and client:
- New Cookson strategies give advisors a reason to engage with clients
- Clients get the benefit of having a single advisor managing their money in a diversified set of strategies, designed explicitly to work well in combination with each other
- Clients receive a fully customizable mix of strategies, including multiple strategies within the same account
Add New Strategies Now
Who in your book would you match with these?
Small/Mid Cap Equity (SMID)
What is it?
- Moderately diversified with 40-60 stocks
- Market capitalization at purchase of $1-25 Billion
- Strict momentum approach that seeks to purchase stocks early on in a period of outperformance
Why now?
- SMID stocks are under-followed by Wall Street. This provides opportunity to buy stocks that have potential to outperform in an outsized fashion.
- SMID stocks have underperformed megacap peers for the last 10 years
- Strategic exposure to this market cap spectrum may provide boost to total return opportunities
How do you use it?
- SMID stocks represent roughly 20% of the overall US market cap
- Strategic allocation of 20-50% of US Equities exposure is appropriate
- Pair with All Cap Equity, Focus Large Cap, or Equity Income to provide potential boost
Equity Income
What is it?
- Moderately diversified with 40-60 stocks; mix of both high absolute yield and high dividend growth
- Target dividend yield of 150-200% relative to the S&P 500 yield
- “All weather” equity income approach that seeks to provide compelling total return in both value and growth markets
- Neutral exposure to momentum
Why now?
- Dividend stocks have underperformed large cap growth stocks consistently for the last 10 years
- “All-weather” approach provides more balanced return profile relative to most equity income strategies on the market
- Dividends may provide downside mitigation in turbulent markets relative to other equity strategies
How do you use it?
- Ideal for clients looking for current income or lower volatility
- Lack of strong momentum bias provides strong complement to momentum strategies, including All Cap Equity, Focus Large Cap, and SMID
Value
What is it?
- Moderately diversified portfolio of 40-60 true value stocks
- Seeks to purchase stocks trading at a discount to typical valuation, while also having compelling combination of growth prospects and/or high quality balance sheets
- Modest tilt toward momentum
Why now?
- Value stocks have underperformed growth stocks consistently for the last 15 years
- Large valuation opportunity exists due to this underperformance
- Opportunity to participate in greater upside if reversion occurs
How do you use it?
- Momentum strategies typically have a growth bias
- Value provides a natural offset to momentum portfolios
- Provides strong complement to All Cap Equity, Focus Large Cap, and SMID
Recap: Why new strategies now?
- Megacap growth stocks have outperformed all other US equities over the last 10-15 years
- Reversion opportunity exists due to the magnitude of the performance disparity
- Largest opportunities exist in smaller market caps and in more value-oriented stocks
How do you use them?
- CooksonPierce core momentum strategies, namely All Cap Equity, serve as all-weather core to a portfolio
- SMID provides strategic exposure to small and mid cap stocks and allows for potential alpha from underfollowed area of the market
- Equity Income and Value have small explosure to momentum and serve as strong offset to All Cap Equity and SMID