Our strategies use cash-flow-based measures of value and quality that are designed to avoid accounting distortions that we believe have rendered many traditional metrics less relevant in an increasingly asset-light world.
Our Core Beliefs
FUNDAMENTALS MATTER
We assess corporate fundamentals the
way a business owner would. Our diversified portfolios seek first to preserve capital and limit downside risk.
DIFFERENTIATED APPROACH
Our unique valuation and quality measures
result in portfolios that are significantly
different than many traditional value and
quality offerings.
RATIONAL DESIGN
Our process is simple and intuitive. Our approach relies on fact rather than speculation and is applied with rigor and discipline.
Since May 2017, the S&P 500 has achieved a 14.3% annualized total return, with a significant portion (4.6 percentage points) stemming from valuation expansion, particularly among the largest stocks. The remaining return came from dividends and free cash flow growth. Distillate’s U.S. FSV strategy, which has nearly matched the S&P 500’s performance over this period, did not benefit from this valuation expansion. Instead, its net-of-fee returns were driven by superior underlying free cash flow growth, primarily due to systematically rebalancing into less expensive stocks.
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