The Navigator® All Cap strategy remains positioned in approximately 67.5% in large-cap stocks and the remainder in mid/small-cap cap stocks and cash. The portfolio continues to balance portfolio holdings and adjustments between those companies which will benefit from work-from-home trends and the those which will benefit from economic re-opening. In the latter case, we are diligent with respect to a company’s measured antifragility measures and credit exposure as the weakest parts of the economy continue to struggle. During the quarter, the portfolio added Norfolk Southern, Oracle, Fidelity National Financial, and Emergent Biosciences and exited State Street and Gentex.

Our current weighting in the big five (Microsoft, Apple, Google, Amazon and Facebook) has fallen to approximately 16.2% due in part to a reduction in our Apple position and the general pullback in large-cap tech growth stocks. Technology remains the largest sector weight in the strategy at 23.2%. Consumer Discretionary, Financials and Healthcare are our next biggest sector exposures, each with weightings between 12.2% and 17.1%. All Cap’s quality characteristics, as measured by earnings variability and gross and net margins, have now tilted towards a barbell of the what we believe are highest quality, high margin and high yielding companies. We believe that the strong antifragility characteristics score of its holdings will help keep portfolio volatility low.

For the third quarter of 2020, the Navigator® All Cap strategy had a return of 6.73% (5.95% net) vs. a 9.21% gain in the Russell 3000 index. For the five years ending September 30, All Cap gained 7.32% gross on annualized basis (4.16% net) vs. 13.69% for the Russell 3000.

Our positioning in Energy and Real Estate helped relative performance while our positioning in Information Technology and Industrials acted as a drag in the third quarter of 2020. Portfolio holdings in PulteGroup and Charles River Labs helped relative performance while holdings in Regeneron and Hill-Rom hurt performance.

Top 5 Contributors

Ticker Quarter Ending September 30, 2020 Average Weight (%) Contribution to Return (%)
AAPL Apple Inc. 4.45 1.10
PHM PulteGroup, Inc. 2.11 0.68
CRL Charles River Laboratories International, Inc. 2.06 0.53
AMZN Amazon.com, Inc. 3.24 0.43
EXP Eagle Materials Inc. 1.81 0.37

Top 5 Detractors

Ticker Quarter Ending September 30, 2020 Average Weight (%) Contribution to Return (%)
HRC Hill-Rom Holdings, Inc. 0.9 -0.26
REGN Regeneron Pharmaceuticals, Inc. 2.32 -0.24
PSX Phillips 66 0.77 -0.21
FOXA Fox Corporation Class A 0.75 -0.16
CI Cigna Corporation 1.25 -0.14
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.
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 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 ISM Non-Manufacturing Index (NMI) is an economic index based on surveys of more than 400 non-manufacturing (or services) firms’ purchasing and supply executives, within 60 sectors across the nation, by the Institute of Supply Management (ISM).
The volatility (beta) of a client’s portfolio may be greater or less than its respective benchmark. It is not possible to invest in these indices.
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.
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-669

downloadPDF