The Phocas Equity Income strategy invests in common, preferred and convertible preferred equities augmented with non-core equity and fixed income securities and utilizes the S&P U.S. Preferred Stock Index® as a benchmark.
Phocas believes that active managers investing in preferred securities should allocate 2/3 of their portfolio to core positions in order to generate a stable and high level of current income for investors while sufficiently managing risk.
Portfolios typically include between 100 – 200 securities using a core/satellite approach. The portfolio is diversified across sectors.
Investment process combines the fundamental research methodologies utilized in the Phocas Small Cap Value strategy and the Phocas REIT strategy.
The strategy can be characterized as bottom-up and does not utilize macroeconomic forecasting. The Phocas team strives to add performance through security selection and to generate above average current income versus the broader equity markets with lower volatility over time.