Emerson Investment Management

Emerson Investment Management offers four products for institutional investors: capital appreciation, dividend appreciation, multi-sector fixed income and investment-grade fixed income. We also offer a balanced strategy with an expanded set of securities and strategic asset allocation.

Capital Appreciation

Objective: Grow capital through price appreciation and provide attractive, risk-adjusted returns above core equity benchmarks.

Description: Capital Appreciation is a core equity product which invests in large to mid-cap domestic companies that are:

• fundamentally strong,
• under-appreciated by the market, and
• have positive catalysts for growth.

Strategy:Emerson’s capital appreciation philosophy is biased toward ‘growth’ stocks.  Important factors in our quantitative analysis include profitability, valuation and momentum.  Fundamental research focuses on earnings potential, industry and competitive analysis, product cycles, changes in valuation due to non-fundamental reasons, relative value, management changes or reorganizations, changes in industry pricing and other positive catalysts.  Policies guide rebalancing, weighting of investments, sector allocation and sell criteria.

Benchmark: S&P 500 Index, Russell 1000 Growth Index

Managers:John D. Lemery, CFA; Paul A. Tryon, CFA; Jennifer A. Gallagher, CFA, Patrick T. Long 

Dividend Appreciation

Objective: Seek long-term growth with below market volatility by investing in companies that pay dividends.

Description: Dividend Appreciation is a core equity product which invests in mostly domestic companies. Our team looks for companies with:

• above-average dividend yields (versus the S&P 500),
• below market valuations, and
• increasing dividends.

Strategy: Emerson’s dividend appreciation philosophy is bias toward ‘value’ stocks.  Important factors in our quantitative analysis include dividend yield, track record of dividends and potential to increase dividends, earnings trend and variability, dividend coverage, dividend payout and valuation. Fundamental research focuses on changes to a company’s long term earnings potential, sustainability of and potential for increased dividends, market share and product cycles.  Many of our selected companies are temporarily out of favor or ‘fallen angels’.  Policies guide rebalancing, weighting of investments, sector allocation and sell criteria.

Benchmark: S&P 500 Index, Russell 1000 Value Index

Managers: Paul A. Tryon, CFA; John D. Lemery, CFA; Jennifer A. Gallagher, CFA, Patrick T. Long

Multi-Sector Fixed Income

Objective: Pursue higher-than-average yield with potential for capital appreciation in various credit-related markets.

Description: Multi-sector fixed income is a core credit portfolio blending a number of fixed-income sectors and securities.  Our managers:

• pursue higher than-average yield and total return,
• identify relative value and improving credit trends,
• will deviate mildly from benchmark duration.

Strategy: Emerson’s multi-sector approach focuses on relative value in credit-related sectors, improving fundamentals and valuation of individual securities.  Managers maintain an investment grade rating and will allocate to non-investment grade positions according to prevailing credit conditions and valuation. Asset classes include domestic and foreign governments, agencies, corporates, preferreds and convertibles, and publically traded private finance.

Benchmark: Blended Index: 65% Barclays Aggregate Index/35% Barclays High Yield Index

Managers: John D. Lemery, CFA; Jennifer A. Gallagher, CFA

Investment-Grade Fixed Income

Objective: Provide income with moderate price volatility by investing in investment-grade fixed income securities resulting in attractive total return relative to stated benchmark.

Description: Investment grade is a core fixed-income portfolio for investors seeking returns above those traditionally achieved in the government market while maintaining a conservative risk profile. The manager seeks incremental return from:

• Fundamental research driven credit selection and industry exposure
• Allocation to asset class with greatest expected risk adjusted return
• Mild deviation from benchmark duration

Strategy: Emerson's investment-grade approach focuses on relative value among the taxable high-grade markets and security selection based on fundamental research and relative valuation. Sector exposure includes domestic governments, agencies and investment-grade corporate bonds.

Benchmark: Barclays Government/Credit Index

Managers: John D. Lemery, CFA; Jennifer A. Gallagher, CFA

Balanced Income Strategy

Objective: Provide income with growth in a globally diversified portfolio.

Description: With an emphasis on current and recurring income, a Balanced Income portfolio is constructed with a blend of individual securities and funds.  Diversified across many sectors and asset classes, a base case allocation is derived using efficient market analysis which considers the expected return, volatility and correlation of each asset.  Portfolio income is driven by dividend-paying stocks and dependable interest on bonds.

Strategy: Tactical changes in weightings of asset classes and individual investments are based on macro trends, fundamental expectations and relative value. The broad array of asset classes includes:

Benchmark: 60% S&P 500/40% Barclays Aggregate

Managers: John D. Lemery, CFA; Paul A. Tryon, CFA; Jennifer A. Gallagher, CFA; Patrick T. Long, Bradford A. Gardner; Clarence H. King, III, CFA, CIC; Stacy Austin Reinhart; Alyson L. Nickse, CFP®; Carl E. Seadale