Fayez Sarofim & Co. Large Cap Equity Strategy

Why Invest in this Strategy?

  • Seeks to provide quality growth exposure with lower volatility and less risk than the S&P 500 benchmark
  • Seeks to invest in enduring companies that the managers believe are resilient, well-positioned, and whose earnings can potentially deliver solid growth over the long term
  • Designed to be part of a core holding, with long-term focus and low portfolio turnover
  • Seeks to provide exposure to companies with dominant global positions in structurally attractive industries with clear competitive advantages

Strategy Assets
(Millions)

$25,534  As of 03/31/24

PE RATIO
(1-YEAR FORWARD)

25.83  As of 05/31/24

PB RATIO
(1-YEAR FORWARD)

7.37  As of 05/31/24

Return on
Equity (ROE)

47.52% As of 05/31/24

Median
Market Cap
(billions)

$169.35  As of 05/31/24

Weighted AVG.
Market Cap
(billions)

$905.33  As of 05/31/24

EPS Growth
(5-Years)

15.29% As of 05/31/24

Strategy Assets captures all assets the investment manager manages in that discipline for all client types.

Price/Earnings Ratio - Price-to-earnings (P/E) is the ratio of the market price of a firm’s common stock to its current (or predicted) earnings per share. Price/Book Ratio - Price-to-book value (P/B) is a ratio used to compare a stock's market value with its book value. It is calculated by dividing the current closing price of the stock by the latest quarter’s book value (assets minus liabilities).

Return on Equity is the percentage a company earns on its total equity for the time period listed. The calculation is net income divided by end-of-year net worth. The resulting figure is multiplied by 100.

Median Market Cap is the midpoint of market capitalization (market price multiplied by the number of shares outstanding) of the stocks in a portfolio. Half the stocks in the portfolio will have higher market capitalizations; half will have lower.

Weighted Avg Market Cap - Weighted average market cap is the average market capitalization of corporations in a fund or index, weighted by the percentage of the holding in the fund or index.

Earnings per share (EPS) growth is a figure that represents the annualized rate of net-income-per-share growth over the trailing five-year period for the stocks held by a portfolio.

Fayez Sarofim & Co.
Year Founded: 1958
Newton Investment Management Logo

Fayez Sarofim & Co. was founded in 1958 as a global investment manager. The firm is privately held and based in Houston, Texas. Fayez Sarofim & Co. has benefited from the tenure of its senior investment professionals, who have been with the firm an average of 21 years. The firm’s extensive client list and many long-term client relationships attest to its singular focus for over six decades. At the end of the fourth quarter of 2021, Fayez Sarofim & Co. managed approximately $29.4 billion in assets.

Investment Philosophy
Fayez Sarofim & Co. believes that enduring growth is predicated on industry dominance. Dominant businesses are usually to be found in large companies, with the potential to produce above-average earnings growth and market leadership over sustained time periods. They believe that stock price appreciation is based on earnings growth over the long term.
  • Broad Industry Analysis

    The process starts with a broad sector view to examine the major trends in the industry.
  • Deep Investment Research

    Fayez Sarofim & Co. then identifies potential attractive companies, and then examines its valuations. The considered investment company is subject to ongoing research to validate or overturn Fayez Sarofim & Co.’s thesis..
  • Stock Selection and Portfolio Management

    The firm’s investment committee synthesizes the results and decides if the stock should enter the portfolio. The net result of the firm’s process is a portfolio with an average of 40–60 holdings.

Portfolio Managers

  • Alan R.  Christensen

    Alan R. Christensen, CFA

    Years at the firm: 19

    Years managing strategy: 4

    Years in industry: 29

  • Catherine Crain

    Catherine Crain, CFA

    Years at the firm: 31

    Years managing strategy: 19

    Years in industry: 35

  • William Gentry Lee, Jr.

    William Gentry Lee, Jr., CFA

    Years at the firm: 26

    Years managing strategy: 14

    Years in industry: 30

  • Christopher Sarofim

    Christopher Sarofim

    Years at the firm: 36

    Years managing strategy: 19

    Years in industry: 38

Performance

  • Display Net data
  • Display Gross data
  • Monthly
  • Quarterly
As of 05/31/24
Annualized Returns
Inception Date YTD 1YR 3YR 5YR 10YR SINCE INCEPTION
Fayez Sarofim & Co. Large Cap Equity Strategy 01/01/00 7.90 6.59 23.19 19.65 8.46 5.31 15.92 12.58 11.89 8.65 7.69 4.56
- - - - - - - - - - - -
S&P 500® Index N/A 11.30 11.30 28.19 28.19 9.57 9.57 15.80 15.80 12.69 12.69 -
As of 03/31/24
Annualized Returns
Inception Date YTD 1YR 3YR 5YR 10YR SINCE INCEPTION
Fayez Sarofim & Co. Large Cap Equity Strategy 01/01/00 7.50 6.73 24.74 21.16 10.76 7.55 15.63 12.29 12.32 9.07 7.72 4.60
- - - - - - - - - - -
S&P 500® Index N/A

Sources: Fayez Sarofim, FactSet.

Past performance is no guarantee of future results. Current performance may be lower or higher than the performance quoted. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.

Strategy performance shown above is that of the SMA Large Cap Equity Composite created and managed by Fayez Sarofim & Co. This performance is not the performance of BNY Mellon Securities Corporation ("BNYMSC"), as BNYMSC does not manage any SMA accounts in this strategy.

Net returns assume the reinvestment of dividends, and are net of a 3.0% annual account advisory fee which is the historical industry standard highest fee in the wrap account industry. Gross returns assume the reinvestment of dividends, but do not reflect the deduction of any account advisory fees or other expenses that an investor would pay, which would reduce returns.

Returns for less than one year are not annualized.

The Standard and Poor's 500 Index (the Index) is presented as a benchmark for the returns. The investment portfolios included in the Strategy are structured differently than the Index. The Index is published by Standard & Poor's, a division of S&P Global, Inc. The Index is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the Index are those of large publicly held companies that trade on either of the two largest American stock exchanges: the New York Stock Exchange and the NASDAQ. Investors cannot invest directly in an index.

Download Most Recent GIPS Performance Report for all GIPS Disclosures.

Calendar Year Performance

  • Display Net data
  • Display Gross data

    Sources: Fayez Sarofim, FactSet.

    Past performance is no guarantee of future results. Current performance may be lower or higher than the performance quoted. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.

    Strategy performance shown above is that of the SMA Large Cap Equity Composite created and managed by Fayez Sarofim & Co. This performance is not the performance of BNY Mellon Securities Corporation ("BNYMSC"), as BNYMSC does not manage any SMA accounts in this strategy.

    Net returns assume the reinvestment of dividends, and are net of a 3.0% annual account advisory fee which is the historical industry standard highest fee in the wrap account industry. Gross returns assume the reinvestment of dividends, but do not reflect the deduction of any account advisory fees or other expenses that an investor would pay, which would reduce returns.

    Returns for less than one year are not annualized.

    The Standard and Poor's 500 Index (the Index) is presented as a benchmark for the returns. The investment portfolios included in the Strategy are structured differently than the Index. The Index is published by Standard & Poor's, a division of S&P Global, Inc. The Index is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. The stocks included in the Index are those of large publicly held companies that trade on either of the two largest American stock exchanges: the New York Stock Exchange and the NASDAQ. Investors cannot invest directly in an index.

    Download Most Recent GIPS Performance Report for all GIPS Disclosures.

    Portfolio

    Composition Allocation
    Microsoft Corporation 9.00
    Amazon.com, Inc. 5.75
    Apple Inc. 5.00
    Alphabet Inc. Class C 4.50
    Novo Nordisk A/S Sponsored ADR Class B 4.00
    UnitedHealth Group Incorporated 3.50
    Visa Inc. Class A 3.50
    Intuit Inc. 3.00
    Texas Instruments Incorporated 3.00
    BlackRock, Inc. 2.50

    Asset Allocation

        Source: Fayez Sarofim & Co. Top 10 equity weights are based on a representative model account, exclusive of cash. Total model holdings are from the same representative model account, inclusive of cash. Individual accounts may vary.

        Main Risks

        All investments involve risk, including loss of principal. Equities are subject to market, market sector, market liquidity, issuer, and investment style risks, to varying degrees.

        Risk Metrics

        As of  05/31/24  3-Year trailing Standard Deviation Alpha Beta R-Squared Sharpe Ratio Tracking Error Information Ratio
        Fayez Sarofim & Co. Large Cap Equity Strategy
        17.43 -0.70 0.95 93.61 0.37 4.48 -0.25

        All risk metrics are provided by Morningstar. The index used in the calculations are determined by Morningstar which may not be the strategy’s primary benchmark. The index Morningstar used for this analysis is S&P 500® Index.

        Standard deviation - It is a statistical measure of the degree to which an individual portfolio return tends to vary from the mean, based on the entire population. The greater the degree of dispersion, the greater the degree of risk. In mutual funds, the standard deviation tells us how much the return on the fund is deviating from the expected normal returns.

        Alpha - It is a measure of a security's or portfolio's excess return.

        Beta - It is a measure of a security's or portfolio's volatility, or systematic risk.

        R-Squared - It is a statistical measure that represents the percentage of a fund's or security’s movements that are explained by movements in a benchmark index.

        Sharpe Ratio - It is a risk-adjusted measure that measures reward per unit of risk.

        Tracking Error - is a measure of the volatility of excess returns relative to a benchmark.

        Information Ratio - is a geometric measure of risk-adjusted performance. The Information Ratio is a version of the Sharpe Ratio, but unlike the Sharpe Ratio, the benchmark does not have to be the risk-free return.


        Literature

        PRODUCT MATERIALS

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        Fayez Sarofim & Co. Looking to the Long Term - Brochure Download
        Fayez Sarofim & Co. Large Cap Equity Strategy - Investment Report Download
        Fayez Sarofim & Co. Large Cap Equity Strategy - Presentation Download
        Fayez Sarofim & Co. Large Cap Equity Strategy - Top 10 Rationale Download
        Fayez Sarofim & Co. Large Cap Equity Strategy - Commentary Download

        Investors should carefully review and consider potential risks before investing. Please see Main Risks section above for additional information regarding investment risks.

        Separately Managed Accounts (SMAs) are offered by BNY Mellon Securities Corporation (BNYMSC) in its capacity as a registered investment adviser.

        Fayez Sarofim & Co. is an SEC-registered investment adviser and a wholly owned subsidiary of The Sarofim Group, Inc. Sarofim, among other services, provides advisory services for equity portfolios under various agreements related to wrap-fee programs, and is introduced to wrap-fee program sponsors primarily through the efforts of BNY Mellon Securities Corporation under the terms of a solicitation agreement between Sarofim and BNY Mellon Securities Corporation. With respect to such wrap-fee programs, BNY Mellon Securities Corporation acts as the account administrator and serves as the liaison between Sarofim and the program sponsors and the program sponsors’ clients, and clients and receives in consequence a portion of the fee charged by the program sponsor for its account administration services. BNY Mellon Securities Corporation plays a similar role with respect to the unified managed accounts (UMA) programs for which Sarofim provides investment management or supervisory services. For such UMA programs, BNY Mellon Securities Corporation functions on behalf of Sarofim as the primary administrative contact with program sponsors and acts as account administrator, and administrator and receives in consequence a portion of the fee charged by the program sponsor for providing such services. Sarofim is not affiliated with BNY Mellon Securities Corporation or The Bank of New York Mellon Corporation. BNY Mellon Securities Corporation is a subsidiary of BNY Mellon. BNY Mellon is the corporate brand of The Bank of New York Mellon.

        This information has been distributed for informational purposes only and should not be considered as investment advice or are commendation of any particular investment, strategy, investment manager or account arrangement and should not serve as a primary basis for investment decisions. Information displayed has been obtained from sources believed to be reliable, but not guaranteed. Please consult a legal, tax or financial professional to determine whether an investment product or service is appropriate for a particular situation. No part of this information may be reproduced in any form, or referred to in any other publication, without express written permission.

        MARK-287608-2022-07-22