That is in full recognition of the fact that non-Treasury securities, particularly in the midsummer of last year, did have some issues.
MANNS: Our style is primarily top-down, sector rotation. By that, I mean that we take a look at an economic forecast, try to develop some type of market outlook and, depending upon what that outlook is, then we decide to either neutral weight, overweight or underweight specific [Standard & Poor’s 500-index] sectors and hope that by doing that, we can add value from sector selection and then work with our in-house staff of 30 analysts to derive the best securities, depending upon our sector allocation. It has been a process that has worked very well in the past and I believe that it will work well in the future.
As a large-cap growth manager, we can have a large exposure to technology. We believe that technology will continue to be one of the drivers of the equity markets in 2000, and we plan to continue to have either an equal weighting or an overweighting within the technology sector. That should [give us] a good policy of returns and a better performance in the market.
RUSSELL C.B. EWING II: Paradigm Asset Management is really one of the leaders and innovators of a style of investing called active enhanced-style investing. What that means is that we take the insights of active managers, superior active managers, and combine those with quantitative tools to control risk for our clients.
We also have really one philosophy but that philosophy spreads across the individual styles of large-cap value, large-cap growth, small value and small growth. That is that there are successful investors in the marketplace. If we can glean their insights and these are successful style-pure managers, managers who stick to their knitting, then over time, what we will be able to do is outperform the stated style benchmarks. We have been able to do that with the majority of our products, since the firm’s inception, and no matter what fluctuations occur in the market, since we are looking to the Russell benchmarks to benchmark our product, we tend to outperform those over time.
DIAMOND: Our style, our philosophy, is to take no more risk than return expectations justify because we understand the role the bonds play in the portfolio. We advise our clients that if they want 25 basis points in return above their index, we’re going to take the risk commensurate with that sort of expectation. If they’re looking for 200 basis points or more, we’re going to advise them to use equity managers.
Our approach is to take moderate interest-rate anticipation plus or minus 20% around an index; rotate sectors-that is to overweight those sectors that we find particularly attractive and underweight those that are rich and unattractive; security selection; and finally, risk control.
Our current stance is that we like mortgages and corporates so we are in agreement with Frankie’s standard approach of overweighting those sectors. We, on the other hand, do not have