For the 12 months ending December 31, 2019, the Navigator® Small Cap Core U.S. Equity strategy delivered gains of 26.51% gross (22.84% net) versus 25.52% gains for the Russell 2000. For the fourth quarter of 2019, the strategy had a gain of 9.26% gross (8.47% net) vs a 9.94% gain for the Russell 2000 Index. Positioning in real estate and financials helped relative performance while positioning in Healthcare and Industrials sectors acted as a drag.

Our higher quality holdings such as Newmark Group Inc. and RH helped performance in the quarter as positions in Taylor Morrison Home Corporation and Herman Miller, Inc. hurt performance. The value characteristics of the strategy remain compelling. Its current P/E of 16.1 is far less than that of the S&P Small Cap (23.6) and Russell 2000 with favorable quality characteristics.

Top 5 Contributors

Ticker Quarter Ending December 31, 2019 Average Weight (%) Contribution to Return (%)
NMRK Newmark Group, Inc. Class A 2.46 1.04
RH RH 3.11 0.78
ATKR Atkore International Group Inc. 2.17 0.68
AEL American Equity Investment Life Holding Company 2.17 0.51
CRMT America's Car-Mart, Inc. 2.57 0.46

Top 5 Detractors

Ticker Quarter Ending December 31, 2019 Average Weight (%) Contribution to Return (%)
TMHC Taylor Morrison Home Corporation 2.63 -0.43
MLHR Herman Miller, Inc. 2.91 -0.22
EVR Evercore Inc Class A 0.63 -0.17
CVI CVR Energy, Inc. 0.36 -0.12
CPK Chesapeake Utilities Corporation 0.64 -0.12
Source: Factset. For illustrative purposes only. Past performance does not guarantee future results. The holdings identified do not represent all of the securities purchased, sold or recommended for advisory clients. In the chart above, “weight” is the average percentage weight of the holding during the period, and “contribution” is the contribution to overall performance during the period. To obtain the calculation methodology and a list showing every holding’s contribution to the overall composite during the period, contact: PortfolioAnalytics@ccmg.com.

The views expressed are those of the author(s) and do not necessarily reflect the views of Clark Capital Management Group. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. There is no guarantee of the future performance of any Clark Capital investments portfolio. Material presented has been derived from sources considered to be reliable, but the accuracy and completeness cannot be guaranteed. Nothing herein should be construed as a solicitation, recommendation or an offer to buy, sell or hold any securities, other investments or to adopt any investment strategy or strategies. For educational use only. This information is not intended to serve as investment advice. This material is not intended to be relied upon as a forecast or research. The investment or strategy discussed may not be suitable for all investors. Investors must make their own decisions based on their specific investment objectives and financial circumstances. Past performance does not guarantee future results.
This document may contain certain information that constitutes forward-looking statements which can be identified by the use of forward-looking terminology such as “may,” “expect,” “will,” “hope,” “forecast,” “intend,” “target,” “believe,” and/or comparable terminology (or the negative thereof). Forward looking statements cannot be guaranteed. No assurance, representation, or warranty is made by any person that any of Clark Capital’s assumptions, expectations, objectives, and/or goals will be achieved. Nothing contained in this document may be relied upon as a guarantee, promise, assurance, or representation as to the future.
Index returns include the reinvestment of income and dividends. The returns for these unmanaged indexes do not include any transaction costs, management fees or other costs. It is not possible to make an investment directly in any index.
The S&P 500 measures the performance of the 500 leading companies in leading industries of the U.S. economy, capturing 75 of U S equities.
The S&P SmallCap 600 seeks to measure the small-cap segment of the U.S. equity market. The index is designed to track companies that meet specific inclusion criteria to ensure that they are liquid and financially viable.
Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
The Russell 3000 Index measures the performance of the 3 000 largest U S companies based on total market capitalization, which represents approximately 98 of the investable U.S. equity market.
The Russell 2000 Index measures the performance of the 2000 smallest U.S. companies based on total market capitalization in the Russell 3000, which represents approximately 11% of Russell 3000 total market capitalization..
Past performance is not indicative of future results. This material is not financial advice or an offer to sell any product. Not every client’s account will have these exact characteristics. The actual characteristics with respect to any particular client account will vary based on a number of factors including but not limited to: (i) the size of the account; (ii) investment restrictions applicable to the account, if any; and (iii) market exigencies at the time of investment.
Clark Capital Management Group, Inc. reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. The information provided in this report should not be considered a recommendation to purchase or sell any particular security, sector or industry. There is no assurance that any securities, sectors or industries discussed herein will be included in an account’s portfolio. Asset allocation will vary and the samples shown may not represent an account’s entire portfolio and in the aggregate may represent only a small percentage of an account’s portfolio holdings. It should not be assumed that any of the securities transactions, holdings or sectors discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein.
Clark Capital Management Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Clark Capital’s advisory services and fees can be found in its Form ADV which is available upon request. CCM-670

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