15800 Bluemound Rd., Suite 250 Brookfield, WI 53005 1-800-765-0157
DANA LARGE CAP EQUITY
STRATEGY
HIGHLIGHTS
Fully invested, relative
value strategy.
Sector neutral, industry
aware.
Top down risk controls,
bottom up stock selection.
Has consistently outperformed
the benchmark; the S&P 500 Index since inception.
INVESTMENT
PHILOSOPHY
Dana's Large Cap Equity Strategy looks
for companies undervalued relative to the
marketplace, with reasonable appreciation
potential in the near term.
By utilizing our proprietary systematic
and fundamental analysis methods we create
a portfolio of companies with improving
earnings outlooks, but undervalued in the
current marketplace.
By utilizing a variety of valuation characteristics,
earnings revisions and sector neutrality
we reduce downside risk by eliminating both
overpriced companies and those that are
likely to have negative earnings announcements,
but yet allow exposure to all sectors of
the marketplace.
EQUITY
INVESTMENT PROCESS
Quantitative Analysis
Growth of revenue, earnings and free cash
flow.
Earnings momentum
Positive earnings surprises
Positive estimate revisions
Ratio/ROE analysis
Relative valuation comparison on multiple
valuation metrics
Fundamental Analysis
Earnings quality/consistency
Improving profit margins
Expanding returns on capital
Rising free cash flow generation
Balance sheet strength
Industry trends/ characteristics
Sell Triggers
Unattractive valuation
Negative news
Deteriorating fundamentals
Negative expectations
Persistent underperformance
Portfolio Construction Process
Skeleton portfolio
Equally weighted holdings
Sector neutral
Target portfolio characteristics relative
to benchmark
Market cap neutral
Portfolio Risk Controls
Sector neutral (+/-1%)
Industry aware
Individual concentration (<4%)
PORTFOLIO
CHARACTERISTICS
Value
Growth
Measure
March 2008
Dana
Large Cap
S&P
500 Cap Weighted
Market Capitalization
($Billion)
71.7
96.5
Dividend yield
1.85%
2.16%
Price to Book
9.5
8.9
Price to Trailing 12 Month
Earnings
14.2
15.5
Price to Projected 1 Year
Earnings Growth
1.1
1.2
Projected 5 Year Earnings
Growth
12.5%
12.6%
PORTFOLIO
CONSTRUCTION
By combining factors
generated by our models, we are able to rank the
entire filtered universe of 200 securities from
most attractive to least attractive within each
sector. Portfolio construction begins by determining
the approximate dollars to invest in each sector
based on the weights of the benchmark. Our portfolios
are constructed of essentially equally weighted
security holdings, with a target portfolio of 50
companies, or about 2% of the portfolio in each
company. We then purchase with the most attractive
companies in each sector until the benchmark sector
weights are attained.
RESEARCH
PROCESS
The Dana Large
Cap Equity strategy is derrived from a universe
of the 700 largest companies publically
traded companies, by market capitaliza-tion,
listed on any of the 3 major U.S. exchanges.
We then use proprietary quanti-tative models
to screen stocks within each sector.
The models rank companies based on three
factors: value relative to other stocks
in the sector, value relative to growth,
and earnings momentum. The screening takes
our 700 company universe down to a filtered
universe of approximately 200 companies.
TOP
10 HOLDINGS
as of 3/31/08
International Business Machines
Corp.
Becton Dickinson & Co
XTO Energy Inc.
General Mills Inc.
Wal-Mart Stores Inc.
J. P. Morgan Chase & Company
Johnson & Johnson
Halliburton Co.
Johnson Controls Inc.
MetLife Inc
HIGHER RETURNS WITH LOWER VOLATILITY
Average
Annualized Return Since Inception as of 3/31/08
Since
Inception Standard Deviation of Return to
3/31/08
The Dana Large Cap
Equity Strategy has consistently outperformed
the S&P 500 since inception. Its use of valuation
and earnings revision analyses limits downside
risk by filtering out overpriced stocks and companies
that are likely to have negative earnings announcements.
SUITABILITY
The strategy is
ideal for clients seeking to outperform the S&P
500 while maintaining a diversified, well-disciplined
investment approach. The fully invested, industry
neutral, stock picking strategy works as an excellent
core equity holding
Please
"Contact
Us" for additional strategy and performance
information
on the Dana Large Cap Equity product.
