The Hard Work at Woodstock

May 25, 2020Evergreen Q2 2020, News

Woodstock Quarterly Newsletter / Q2 2020

A Woodstock portfolio manager must have aptitude for portfolio construction
Woodstock makes its own unique blend of sausage. It may not surprise you that each manager has his or her own opinions about the stocks that go into your portfolio. The stocks in your portfolio are drawn from a list of stocks that we collectively agree meet our standards for what constitutes high-quality growth stocks, and we commit to following fundamental developments at these companies closely. This list of companies comprises our Monitor List. We assign a manager to provide research coverage of each Monitor List stock, and as portfolio managers we are all free to draw from the entire list to determine the right holdings for your particular portfolio.

Each of the managers here has extensive career experience investing in stocks. At our research meetings, we debate the relative merits of holding each of these investments, a healthy process of continually vetting the names. We do a lot of holding, but not without research and discussion. We compete collegially to generate the best portfolio returns while aiming to do what is right for each client. Having the autonomy to construct individual portfolios, as opposed to implementing decisions handed down from a research committee or other centralized authority, is one of the unique aspects of Woodstock. Not only does this autonomy provide a better, more customized product for clients, but it also attracts professional talent to Woodstock. A Woodstock portfolio manager must have aptitude for portfolio construction, equity analysis, and client relations.

We are proud of this system and the results it generates. Given the great variety of client accounts under management, from grandparents to grandchildren, we are also surprised that the dispersion of portfolio returns is so low. Woodstock’s growth composite, which contains 85% of our assets under management, typically has a dispersion of about three percentage points, meaning two-thirds of portfolios fall within a window of the composite’s return, plus or minus three percent. We are encouraged that, despite all our internal deliberation regarding different stocks and investment tactics, we end up with such similar results.

Adrian G. Davies, President