We look for companies that derive the bulk of their revenue through sales to U.S. consumers, fulfilling the different levels of human need. We believe that the potential of these stocks to capture upside gains and mitigate downside risk addresses investor fears regarding volatility.
The portfolio includes companies with strong fundamentals and relatively low levels of volatility that have the potential to be more stable in downturns and more profitable in periods of growth. Highly sensitive sectors such as materials and energy are excluded, as are industrials that do not directly interact with consumers.
WHAT WE CONSIDER
- The portfolio is designed to map Personal Consumption Expenditure (PCE) into Maslow’s hierarchy of need. PCE is the primary measure of consumer spending and provides clues to what U.S. consumers buy and how consumer behavior changes over time.
- The portfolio aims to capture both consumer psychology and investor fears.