Wells Fargo Managed Account Services
Fact Sheet
As of September 30, 2015
Fundamental All Cap Growth Equity Managed Account
BENCHMARK:
A Unique Approach
Russell 3000® Growth Index
The Fundamental All Cap Growth Equity portfolio managers engage in a unique approach to stock selection. The team
uses a collaborative effort, ensuring that no one person’s bias overly influences stock selection decisions. Any given
stock under consideration is fully researched, presented to the team, and discussed openly before it’s purchased.
Every voice on the team is heard, and frank discussion is encouraged, enhancing a rigorous selection process.
TOP TEN HOLDINGS (%)
Apple Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amazon.com, Inc. . . . . . . . . . . . . . . . . . . . .
Facebook, Inc. Class A. . . . . . . . . . . . . . . . .
Home Depot, Inc.. . . . . . . . . . . . . . . . . . . . .
Visa Inc. Class A. . . . . . . . . . . . . . . . . . . . . .
ServiceMaster Global Holdings Inc. . . . .
Google Inc. Class C . . . . . . . . . . . . . . . . . . .
Constellation Brands, Inc. Class A. . . . . .
Google Inc. Class A . . . . . . . . . . . . . . . . . . .
Celgene Corporation. . . . . . . . . . . . . . . . . .
6.10
3.80
3.66
3.54
3.41
2.24
2.13
2.09
2.04
2.01
Differentiating Characteristics
Portfolio Construction
F ocused approach to emphasize alpha generation.
■■ Research-intensive investment process designed to
“surround the company.”
■■ Analysis of current balance sheet to understand
future earnings.
■■ Disciplined management of valuation targets.
■■ Portfolio construction that balances return and risk.
The portfolio construction methodology is designed to
perform in both up and down markets.
■■ Determine position size by research conviction,
quality, valuation, and catalysts.
■■ Monitor sector and industry weights to maximize
opportunity and manage risk.
■■ Select 75 to 90 of the best ideas across the market
cap spectrum.
■■
Investment Philosophy
The information provided in this report should not
be considered a recommendation to purchase or sell
a particular security. There is no assurance that any
securities discussed herein will remain in an account
portfolio at the time you review this report or securities
sold have not been re-purchased. The securities discussed
do not represent an account’s entire portfolio and, in
the aggregate, may represent only a small percentage
of an account’s portfolio holdings. It should not be
assumed that any of the security transactions or holdings
discussed were or will prove to be profitable or that the
investment recommendations or decisions made in the
future will be profitable or will equal the investment
performance of the securities discussed herein.
40–50% Core Growth Companies
40–50% Developing Situations
5–10% Valuation Opportunities
Supplemental Information
Annualized returns (%)
PORTFOLIO MANAGEMENT
Name We believe that:
■■ The equity markets are inefficient.
■■ Bottom-up security selection can add alpha.
■■ Intensive grass-roots research cannot be outsourced.
■■ Superior long-term returns are generated by
companies that have good business models and are
led by management teams who invest capital wisely.
■■ Because growth stocks can be expensive,
valuation matters.
Industry Start Date
Thomas J. Pence, CFA
Portfolio Manager
1987
Michael T. Smith, CFA
Portfolio Manager
1999
Ozo Jaculewicz, CFA
Associate Portfolio Manager
1995
Chris Warner, CFA
Portfolio Manager
2002
Composite – Pure Gross (incepted 9-1-07)2
Russell 3000 Growth Index
3 months1
-8.29
-5.93
Return and Risk Characteristics3,4
Portfolio (3 Year)
Alpha
-2.55%
Beta
1.09
R2
92.0%
Tracking Error
3.50%
Sharpe Ratio
1.02
Standard Dev.
11.50%
Portfolio Characteristics3,4
Statistic
Dividend Yield
Price/Book
P/E using FY1 est
ROE
EPS 3–5 Year est
Historical 3 Yr EPS Growth
Wtd. Avg. Market Cap ($B)
Portfolio
0.64%
4.64x
22.41x
12.96%
16.04%
17.55%
104.10
Benchmark
1.52%
4.62x
18.32x
22.61%
12.88%
11.55%
116.62
YTD1
-4.87
-1.86
1 year
-1.78
3.21
3 years
11.79
13.54
5 years
12.77
14.38
10 years
–
8.05
Sector Weightings3,4,5(% Equities)
Sector
Portfolio
Consumer Discretionary
20.10
Consumer Staples
3.18
Energy
0.00
Financials
8.28
Health Care
18.64
Industrials
10.03
Information Technology
34.29
Materials
2.72
Telecommunication Services
2.76
Utilities
0.00
Since inception
6.69
–
Benchmark
21.25
10.61
0.73
5.62
17.54
11.21
27.51
3.51
1.97
0.05
Performance is historical and does not guarantee future results. This performance is being used solely as supplemental information to the composite
presentation. For more information, please refer to the attached GIPS compliant presentation. Source of indices: FactSet. Sector weightings, portfolio
characteristics, holdings, and market-cap weightings are based on a representative account within the Wells Capital Management institutional composite.
1. Returns of less than one year are not annualized. 2. The gross performance data is a pure gross of fees return and does not reflect the deduction of any
management fees or transaction costs. 3. The information shown is for a representative account within the Wells Capital Management Fundamental All Cap
Growth Equity Composite and is being provided as supplemental information. Wells Capital Management provides the sub-advisory services for the Wells Fargo
Funds Management retail managed account product. 4. Source: FactSet. 5. Sector weightings may not add up to 100% due to rounding.
Wells Fargo Fundamental All Cap Growth Equity Managed Account Composite Disclosure
9-1-07 (Inception) through 12-31-14 Wells Fargo Fundamental All Cap Growth Equity Managed Account
Composite contains all discretionary client portfolios investing in
approximately 75 to 90 companies that the portfolio manager believes
to have the most favorable growth prospects. Intensive bottom-up
research and stock picking is used and valuations are also scrutinized
in the investment process. Market capitalizations of these companies
will span the capitalization spectrum. These portfolios are considered
to be more aggressive and flexible. The portfolio may invest in cash or
cash-type securities as a temporary defensive position to avoid losses
during adverse market conditions. Investment results are normally
measured versus the Russell 3000® Growth Index. The composite was
created in 2007.
The portfolios in this discipline have been sub-advised by Wells Capital
Management since inception.
Wells Fargo Managed Account Services (the “Firm”) is a unit within
Wells Fargo Fund Management LLC that is responsible for the
management and administration of the retail separately managed
account portfolios (wrap portfolios). A list of the Firm’s composite
descriptions is available upon request. Since inception, wrap accounts
represent 100% of the composite assets.
Calculation Methodology
All information is expressed in U.S. dollars. All returns reflect the
reinvestment of dividends and other earnings. A model fee is utilized
for the net composite returns, which is the maximum annual wrap
Year
Pure Gross2
Returns
Net
Returns
Benchmark3
Returns
20071
2008
2009
2010
2011
2012
2013
2014
9.5%
-45.7%
38.9%
27.1%
-4.3%
20.1%
40.2%
4.8%
8.4%
-47.3%
34.8%
23.4%
-7.1%
16.6%
36.0%
1.7%
3.2%
-38.4%
37.0%
17.6%
2.2%
15.2%
34.2%
12.4%
fee assumed to be in effect during each respective performance
period. Composite net returns are calculated by deducting 1/12th of
the annual wrap fee from the composite’s monthly pure gross return.
Monthly returns are linked to calculate annual composite returns.
The dispersion within a composite is measured by using the equal
weighted standard deviation. The standard deviation of pure gross
annual portfolio returns is calculated from the measurements of
variance from the mean annual portfolio return. A statistical measure
of internal dispersion for composites with five or fewer accounts
included for the entire year is not considered meaningful. The threeyear annualized standard deviation measures the variability of the
composite and the benchmark returns over the preceding 36-month
period. It is not required to be presented for annual periods prior to
2011 or when a full three years of performance is not yet available.
Policies for valuing portfolios, calculating performance, and preparing
compliant presentations are available upon request.
Effective January 1, 2015, the composite no longer has a significant
cash flow policy. From inception through 12/31/2014, portfolios were
temporarily removed from the composite when a significant cash
flow occurred. From January 1, 2011 through December 31, 2014, a
significant cash flow was defined as a client initiated cash flow that
exceeded 50% of the beginning market value of the portfolio. From
May 1, 2010 through December 31, 2010, a significant cash flow
was defined as a client initiated cash flow that exceeded 20% of
the beginning market value of the portfolio. Prior to May 1, 2010, a
significant cash flow was defined as a client initiated cash flow that
exceeded 10% of the beginning market value of the portfolio.
Composite 3-year4
Annualized Ex-post
Standard Deviation
N/R
N/R
N/R
N/R
20.6%
19.5%
15.9%
11.9%
Benchmark 3-year4
Annualized Ex-post
Standard Deviation
N/R
N/R
N/R
N/R
18.2%
16.0%
12.5%
9.7%
Number of
Portfolios
100
461
539
397
449
481
510
505
Fees and Expenses
A wrap-fee account is an account under which a client is charged a
specified fee or fees not based directly upon transactions in a client’s
account for investment advisory services and execution of client
transactions. A typical wrap-fee account has fees that include advisory
and other services (custody, consulting, reporting, performance,
selection, monitoring, and execution of trades). This fee is called a
“wrap fee” because it is a single all-inclusive fee charged for the assetbased brokerage relationship. Net returns presented below are net
of the wrap model fee, which includes commissions and transaction
costs. Actual fees may vary depending on the applicable fee schedule.
Currently, the maximum fee used for the portfolios in the strategy is
3.00%. Some accounts in composite may pay commission in addition
to wrap fee.
Comparison with Market Index
The Russell 3000 Growth Index measures the performance of those
Russell 3000 companies with higher price-to-book ratios and higher
forecasted growth values. You cannot invest directly in an index. Source
of the index data is Russell.
Composite
Dispersion
N/A
0.2
0.29
0.25
0.28
0.24
0.39
0.18
Composite Period
End Total Assets
($MM)
$21.2
$60.8
$117.7
$121.0
$111.7
$145.0
$198.0
$193.8
Percent of Firm
Assets
0.5%
2.2%
4.1%
4.6%
5.6%
8.4%
8.8%
9.0%
1. Period return from 9-1-07 to 12-31-07.
2. Pure gross returns are supplemental information and do not reflect the deduction of any expenses, including transaction costs.
3. Benchmark is the Russell 3000 Growth Index.
4. N/R = Not Required.
Wells Fargo Managed Account Services claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Wells Fargo Managed
Account Services has been independently verified for the periods 1-1-06 through 12-31-14. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite
construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not
ensure the accuracy of any specific composite presentation. Wells Fargo Managed Account Services does not claim compliance with the GIPS standards for periods prior to 1-1-06.
Past performance is not a guarantee of future results.
Wells Fargo Asset Management (WFAM) is a trade name used by the asset management businesses of Wells Fargo & Company. WFAM includes but is not limited to Wells Capital Management (Metropolitan West Capital Management,
LLC and ECM Asset Management), Wells Fargo Funds Management, Wells Fargo Managed Account Services, and Wells Fargo Funds Distributor, LLC.; and Affiliated Managers (Galliard Capital Management, Inc.; Golden Capital
Management, LLC; Nelson Capital Management; Overland Advisors; Peregrine Capital Management; and The Rock Creek Group). Certain investments are distributed by Wells Fargo Funds Distributor, LLC, Member FINRA.
Wells Fargo Funds Distributor, LLC is a subsidiary of Wells Fargo & Company.
Wells Fargo Funds Management, LLC, a wholly owned subsidiary of Wells Fargo & Company, provides investment advisory and administrative services for Wells Fargo Managed Account Services. 237673 10-15
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