The Neuberger Berman Large Cap Value Fund institutional class generated a 28.48 per cent return for the 2016 calendar year, ranking in the first percentile of Morningstar's Large Value Category (out of 1,268 funds), and outperforming the Russell 1000 Value Index by over 1,100 basis points.
The fund's institutional class returns were 7.87 per cent for the three years and 14.11 per cent for five years ended 31 December 2016 placing it in the 27th (out of 1,088 funds) and 26th (out of 934 funds) percentiles respectively.
Eli Salzmann, the fund's portfolio manager, uses a value-investing discipline with a patient, conviction-based approach creating a portfolio wherein the top 10 contributors of the fund's 2016 returns accounted for a 37.6 per cent average weighting, while the 10 worst performers accounted for only a 9.9 per cent average weighting; demonstrating the benefits of a disciplined approach. Salzmann's team does research and analysis for large cap value strategies at Neuberger Berman.
Salzmann's team conducts independent, "bottom-up" fundamental and quantitative research to identify nuances of each company that cannot be captured solely by financial characteristics.
"The performance of the Neuberger Berman Large Cap Value Fund reflects the importance of active management and a conviction-based strategy," says Salzmann. "We believe our approach will be especially relevant as we enter a more business-friendly environment characterised by lower taxes, less restrictive regulations and robust capital spending, which could provide a tailwind for corporate earnings and stocks in the US. As interest rates begin to normalise, stock performance will once again be differentiated by company fundamentals, creating an environment that may benefit high-conviction, fundamental investors."
