Andy Eng Takes 27 Years of Quantitative Data and Derives the Best US Stock Portfolio

October 11, 2018

Andy Eng
 joined Renaissance Investment Management in 2016, and he is a Senior Research Analyst on the large-cap growth team and Portfolio Manager for the midcap growth strategy. He has over 20 years of investment experience. Prior to joining Renaissance, he was the equity portfolio manager for Northwestern Mutual Life Insurance Company in Milwaukee. In addition, he had held a variety of analytical and portfolio management roles during his 17 years at Northwestern Mutual, including fundamental stock analysis and portfolio manager of a small-cap growth fund. Prior to joining Northwestern Mutual, Mr. Eng started his investment career with AllianceBernstein.

In this exclusive 3,167 word interview, Mr. Eng details his investing methodology for the Wall Street Transcript.

“…We’re proud of the fact that during the entire existence of the large-cap portfolio, the process has remained consistent. We have always employed a quantitative front-end process, a factor-screening model, which some people refer to as smart beta screen. And we follow that with traditional fundamental research.”

This quantitative front-end is built on proprietary metrics derived from 27 years of internally produced market data:

“We start with the 1,000 largest U.S. companies, excluding ADRs and REITs. And we screen them for profitability and financial strength. And what we end up with is a subset of about 600 companies, which we define as high-quality profitable companies. And within these 600 companies, we employ a scoring process where we score and rank the stocks from one to 600 in terms of their growth, earnings momentum and valuation characteristics, and divide them into quintiles.

The top quintile, which is about 120 to 150 stocks, is what we call our focus list.

This focus list will comprise of stocks that have the highest rankings in growth, earnings momentum and valuation factors. It is from this list that we build a portfolio of about 50 to 60 stocks based on our fundamental research.”

Read the entire 3,167 word interview in order to get the full list of stocks that Andy Eng and his team have developed.