Strategies

Different Markets, One Process

All of Lyrical’s active strategies employ a disciplined, bottom-up investment process designed to find the value gems amidst the junk. We begin with our internally developed value screen, which we manually sift through, one-by-one, to look for the best businesses amongst the cheapest stocks. We assemble our investments into concentrated portfolios of our best ideas. Our best ideas rarely align with benchmark construction, driving very high active share, typically 95% or higher. We aim to buy cheap and sell fair, and not get distracted by short-term trading, leading to low turnover of ~15% per annum. We believe if we execute our process well, paying low prices and underwriting future earnings, we can achieve long-term capital appreciation superior to market benchmarks.

Our passive strategy takes a broader approach. Rather than selecting the best value ideas, it selects all 200 of the lowest P/E stocks. This has historically been an effective approach to take advantage of market overreaction in the most unpopular stocks, and we believe a far better approach to passive value investing than what is available from the most prominent large-cap value indices.

U.S. Value Equity

LAM U.S. Value Equity

Fund Description

Lyrical’s U.S. Value strategy is a concentrated portfolio selected from the universe of the largest 1,000 stocks in the United States.

Andrew Wellington, John Mullins, and Dan Kaskawits are the Portfolio Managers for this strategy. Like Lyrical’s other strategies, U.S. Value Equity is grounded in process. The portfolio normally includes 33 best ideas, diversified by sector and industry. Active Share is typically very high at 95% or higher. Tax efficiency has also been high, with average turnover of ~15% per annum.

The strategy’s Top 10 Holdings and Sector Weightings are shown below, for convenience.

Portfolio Details

Product Description

  • ~33 U.S. listed stocks
  • Selected from largest 1,000 U.S. stocks
  • Pure bottom-up

Stock Selection

  • Value
  • Quality
  • Analyzability

Portfolio Construction

  • Single stock limits
  • Industry limits
  • Low turnover

Available Vehicles

Featured Content

Top 10 Positions

Data as of 09/30/2022

Sector Weightings

Data as of 09/30/2022

International Value Equity

LAM International Fund

Fund Description

Lyrical’s International Value Strategy is a concentrated portfolio selected from the universe of the largest 1,500 companies in the world’s developed markets (excluding the United States).

Dan Kaskawits and John Mullins are the Portfolio Managers for this product. Like Lyrical’s other products, International Value Equity is grounded in process. The portfolio normally includes 25-40 best ideas, diversified by sector, industry and country. Active Share is typically very high at 95% or higher. Tax-efficiency has also been high, with turnover suggesting an average holding period of seven years.

The portfolio’s Top 10 Holdings and Sector Weightings are shown below, for convenience.

Portfolio Details

Product Description

  • 25-40 international listed stocks
  • Selected from largest 1,500 non-U.S. developed market stocks
  • Pure bottom-up

Stock Selection

  • Value
  • Quality
  • Analyzability

Portfolio Construction

  • Single stock limits
  • Industry limits
  • Country limits
  • Low turnover

Top 10 Positions

Data as of 09/30/2022

Sector Weightings

Data as of 09/30/2022

Global Value Equity

LAM Global Value

Fund Description

Lyrical’s Global Value Strategy is a concentrated portfolio selected from the universe of the largest 2,500 companies in the world’s developed markets.

Andrew Wellington, Dan Kaskawits, and John Mullins are the Portfolio Managers for this strategy. Like Lyrical’s other strategies, Global Value Equity is grounded in process. The portfolio normally includes 55-75 best ideas, diversified by sector, industry, and country. Active Share is typically very high, at 95% or higher. Tax-efficiency has also been high, with turnover suggesting an average holding period of seven years.

The strategy’s Top 10 Holdings and Sector Weightings are shown below.

Fund Details

Product Description

  • 55-75 global listed stocks
  • Selected from 2,500 of the largest companies in the world’s developed markets
  • Pure bottom-up

Stock Selection

  • Value
  • Quality
  • Analyzability

Portfolio Construction

  • Single stock limits
  • Industry limits
  • Country limits
  • Low turnover

Top 10 Positions

Data as of 09/30/2022

Sector Weightings

Data as of 09/30/2022

Impact

Lyrical Impact (Global Impact Value Equity Strategy, GIVES)

Fund Description

Lyrical’s GIVES strategy is a concentrated portfolio selected from the universe of the largest 2,500 companies in the world’s developed markets.

Dan Kaskawits and John Mullins are the Portfolio Managers for this strategy. Like Lyrical’s other strategies, GIVES is grounded in process. The portfolio normally includes at least 20 best ideas, diversified by sector, industry, and country. This strategy includes only companies that actively seek to improve the world as indicated by their alignment with at least one of the UN’s Sustainable Development Goals. By way of illustration, GIVES’ portfolio companies’ average carbon intensity is 73% less than its benchmark. To be clear, the aim is to do well while doing good.

The strategy’s Top 10 Holdings and Sector Weightings are shown below.

Investment Pillars

Material

At least 50% of a company’s revenue must be directly tied to at least one of the United Nation’s Sustainable Development Goals.

Measurable

Impact must be quantifiable

Intentional

Core business and senior management must be deeply rooted in sustainability efforts

Sustainable

Negative externalities from a company’s operations cannot outweigh its positive impact.

The GIVES Portfolio’s average carbon intensity (Scope 1&2) is 73% less than its benchmark.

Top 10 Positions

Data as of 09/30/2022

Sector Weightings

Data as of 09/30/2022

Passive U.S. Value/ETF

U.S. Value ETF

Fund Description

Endeavoring to capture true value, the ETF harnesses the most inexpensive 200 names, measured by forward earnings multiples, of the largest 1,000 companies in the U.S. market. The ETF was launched after years of researching and lamenting the poorly-founded, in our view, assertions of the demise of value investing. Consistently, value investing critics pointed to the S&P and Russell “value” indices as having fared poorly, in the face of “growth’s” ascendency. Lyrical noted that what was broken was not value investing but rather the indices used to reflect value investing. In Lyrical’s view, when people think of “value,” they think of inexpensive companies relative to fundamentals. The most well-known value indices unexpectedly include some companies trading at 20-40x earnings, have relatively low active share versus the broad indices, and incorporate “anti-growth” factors in portfolio construction. In contrast, Lyrical’s passive value construction, the Lyrical U.S. Value Index, which the ETF tracks, trades at a substantial discount to the broad market and to the well-known value indices.

The portfolio’s Top 10 Holdings and Sector Weightings are shown below.

Top 10 Positions

Data as of 09/30/2022

Sector Weightings

Data as of 09/30/2022