Our Approach

LACM seeks to bridge the gap between forward-looking fundamental equity management and backward-looking quantitative approaches.

LACM was founded to address the need for a forward-looking systematic approach to equity management, that allows for true breadth of coverage, while seeking to avoid historical biases that can dictate traditional quantitative approaches. With an investment philosophy underpinned by Investor Preference Theory®, and an implementation process driven by a proprietary, dynamic model, LACM constructs portfolios that are designed to adapt and evolve to today's economic environment. 

LACM’s investment philosophy is underpinned by its proprietary concept of Investor Preference Theory®

Investor preferences and risk tolerances change as the market evolves, and long-term historic factor behavior is not always an accurate indication of future performance and returns.

This innovative and dynamic concept forms the DNA of the Firm's investment process, guiding the research team in its search for alpha. Los Angeles Capital's Dynamic Alpha Stock Selection Model® seeks to avoid historical biases in favor of capturing and incorporating the views of today's equity investors, resulting in portfolios that are designed to adapt to the current economic environment.

Get in touch to learn more about LACM's approach.

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Investment Process

Los Angeles Capital’s Dynamic Alpha Stock Selection Model®

  1. Factor Research

    Identify fundamental, sector, region, and country factors.

  2. Model Views

    Proprietary attribution technology identifies and isolates recent factor prices. Forecast factor returns based on their level and stability.

  3. Stock Alphas

    Systematically develop individual stock "alphas" (expected excess return) reflecting most recent market information.

Portfolio Management and Trading

  1. Construct Portfolio

    Optimize portfolio to maximize return subject to client guidelines, incorporating risks, uncertainty, and cost. Rebalancing incrementally shifts positioning towards optimal portfolios resulting in repeatable buy/sell discipline.

  2. Execute Trades

    Trading process seeks to manage and monitor transaction costs.