Investment Objective

To manage against capital risk by reducing year-to-year volatility. A secondary objective is capital growth, when the Investment Manager believes valuation levels in the stock market are favorable and when the Investment Manager believes its specific strategies and pricing techniques can take advantage of market conditions. 

Investment Team

The Core Team is responsible for evaluating bottom-up stock recommendations based on strategy fit and valuation measures as well as incorporating the firm’s market & economic views into total portfolio asset allocation decisions. The Fixed Income Group is responsible for the active management of the portfolio’s fixed income segment.

Composition

Generally weighted heavier in short and intermediate fixed income securities than in long-term fixed income or equities.

5% - 35% Equities

Investment Process

Active Asset Allocation
Manning & Napier uses an active asset allocation process because we recognize that no single asset mix is likely to be appropriate in all market environments. The firm's Investment Policy Group issues broad guidance for asset allocation within multi-asset class portfolios based on the firm's market & economic outlook. From there, equity selection is the primary driver of the portfolio’s asset allocation and the Global Core Team determines day-to-day equity exposure. The level of fixed income allocation results from the bottom-up stock selections made by the Global Core Team. An active approach to asset allocation allows us the flexibility to take advantage of opportunities that arise in the marketplace, and adjust the portfolio to fundamental changes in the economic environment. We have more than 50 years of experience managing risk through this active approach.

Equity Investment Process
For more than 50 years, the same proprietary bottom-up driven investment process has been used to build diversified portfolios of individual securities. Manning & Napier’s equity analysts first search the global investment universe using both bottom-up (company-specific) and top-down (macro) research to reduce the initial universe to a workable list of potential portfolio candidates. Next, companies are evaluated using fundamental analysis to generate a formal list of portfolio candidates based on three selection strategies - Strategic Profile, Hurdle Rate, and Bankable Deal. If a company is a strategy fit, strict pricing disciplines are used to establish buy and sell targets based on fair market value. Within this process, the company is subjected to peer review within the recommending analyst's sector group. As part of this peer review, every analyst in the sector group has a financial stake in the stock - not just the recommending analyst. When the security is formally recommended, it is presented to the Global Core Team, which determines whether to accept the security recommendation, put it on the “firedrill” list, or reject it. Each holding is continuously monitored based on our strategy fit and valuation criteria, and the portfolio's overall risk exposures are regularly evaluated by the team.

Fixed Income Investment Process
Our approach to fixed income investing is based on a multi-step process with an emphasis on actively managing risk. The team establishes an economic overview that is used to determine duration and yield curve positioning. Security-specific analysis is then conducted based on which sectors are deemed to be most attractive given current market conditions. Purchased securities are continuously monitored and additional purchases or sales are evaluated based on security selection criteria and relative value.

The Manning & Napier Conservative Growth Composite is a weighted average of discretionary separately managed accounts with a Conservative Growth objective. Accounts in this composite must have a market value greater than $500,000 and tenure of at least one year under our management. Conservative Growth is a blended investment objective that invests in fixed income and equity securities, primarily U.S. with some non-U.S. The investment objective of accounts in this composite is primarily to manage against capital risk by reducing year-to-year volatility and secondly to seek long-term capital growth. Equity exposure for accounts in this composite typically ranges from 5% to 35% with situational adjustments within this range at our discretion. Net-of-fee returns shown reflect the deduction of a model advisory fee applied to the Gross-of-fee returns on a monthly basis. The model advisory fee is determined by applying the strategy’s tiered fee schedule to every account included in the composite, and is inclusive of management fees, advisory fees, and custody fees for Manning & Napier’s affiliated trust company, Exeter Trust Company. Actual account level fees will vary with size and circumstances and these fee differentials would impact returns accordingly. Returns shown do not reflect the deduction of fees paid to an investor’s personal financial advisor, solicitations fees, or third-party custodian costs, as applicable. Past performance does not guarantee future results. Fees used for calculations are firmwide rates prior to 2001 and specific to this composite for 2001 onward. Prior to 01/01/2009, proprietary mutual fund and collective investment trust fund accounts with a Conservative Growth objective were excluded from the composite. This composite includes separately managed accounts that may have a portion of their assets invested in proprietary asset class mutual funds, which may be declined or may not be permitted through the selection of some custodial programs. All data are subject to revision. Performance for periods greater than one year is annualized.