Dave Harden is Chief Executive Officer and Chief Investment Officer of Summit Global Investments. A graduate of Boston College, B.A., and Boston University, M.S.C.S., Mr. Harden has established himself as an expert in investment technology and quantitative research.
In this 3,839 word interview, exclusively in the Wall Street Transcript, Mr. Harden reveals his “special sauce” in developing his award winning portfolios.
“We like to buy outstanding companies with the least amount of downside surprises in the delivery of high risk-adjusted returns. We are a boutique asset investment firm in the sense that we have very specialized, highly experienced individuals here, so a lot of CFAs — over 80% of the firm is CFA — as well as an in-house General Counsel and Chief Compliance Officer.
We just won two awards from the Institutional Asset Management Awards for 2019. We were awarded the Active U.S. Large Cap Strategy of the Year for the SGI U.S. Large Cap Equity Strategy and the ESG Strategy of the Year for our SGI Global Equity Strategy.”
Several quantitative factors are involved in asset selection, however risk is one major one:
“Risk is managed throughout all our processes. For example, we also use multiple risk covariance matrices. Most shops out there today, if they even use a risk covariance matrix, only use one, and we use multiple, and that’s very important because risk covariances have weaknesses.
Understanding those weaknesses and utilizing multiple matrices allows us to have a better, more robust suggested universe of what to buy and what to sell and ultimately manage risk better. We are the only one that I know of that does that.”
This discipline leads to some interesting portfolio decisions:
“…One of our top holdings is Walmart. Now this is a large company with a lot of U.S. consumer exposure. But it is a global player in the sense that it receives probably on average about 30% to 40% of its sales from international markets. The reality here is that Walmart has done a very good job. They were late to the online game after Amazon (NASDAQ:AMZN). But its online sales have been growing. Actually, they’ve been growing at about 30% a year.
An interesting thing about Walmart and its online growth is that it does well if the market actually goes down. ”
Get all the top picks from this award winning portfolio manager in the entire 3,839 word interview, exclusively in the Wall Street Transcript.