Portfolio Insights: Small Cap Focus & Mid Cap Focus
But we're very thematic. I think about the portfolio and digital transformation is in the forefront of what we do. And that's almost regardless of any industry, even a consumer company we invest in. We want to have benefit in digital transformation. For example, Wingstop. They are really focused on digital and delivery. That's why they've been doing so well. It's one of the very few companies that does well in the consumer space. And I’ve been invested since 2016. So clearly, it's long-term thinking and of course cloud computing, we have a lot of exposure out. And e-commerce, very important. Industrial automation, which we believe will come back because automation is a very important being turning data into actionable information. And the most important is health care. Whether it's in diagnostics, advanced health care testing or medical devices. It's a very important area, but I think of our portfolio one is in seeing we want to be in those, we are the key themes that cutting edge of the innovation and also how business going to trend it into that theme. Right? Because our portfolio is very levered into the digital economy, which I think going forward after we come out of this, everything will be more digitized. So, whether it's going to be from working more from home or getting food more through like digital and the delivery in health care. Even for Veeva, now they're doing a huge initiative digital engagement with the salespeople who the CRM is used by--pharmaceutical sales people. They can actually give their sell extremely efficiently and effectively online, which is very important. So, those are the important things that we are focusing on that seem to our position as well. Not just for the crisis but importantly for the future. Brad Newman : Got it. Those are definitely exciting themes. You also manage the Alger Mid Cap Focus Fund, which was launched about a year ago and has had some very strong performance. The fund was recently recognized by Morningstar on its Prospects List, which highlights up and coming investment strategies that may be worth an investor's consideration. Can you briefly discuss your management of the fund?
Amy Zhang : I'm glad that we are doing well. From the launch of the product it's always been my belief that this will be an actual extension of what I've done for over 17 years as small cap manager. A lot of companies that I've known through the years have grown to be mid cap. And a lot of small companies are graduating through mid cap. I think it will be a very fertile ground for active management because it's very synergistic and it's been mutually beneficial for our small cap strategy as well. Because we are in a particular space there are different companies that some could be mid cap and some could be small cap that either compete with each other or they complement each other. I've also made a concerted effort to reduce overlap. When I first launched the SMA, before the fund was launched last year, we had 60% overlap, which is sort of understandable since most of the names I know that I believe could do well, but one can always do better, as I believe. Now we have 26% overlap. So it's much more diversified in the sense that, because I want to position the mid cap to be complementary to small focus, that they are two different strategies. They behave differently. Also, if you look at its holdings, it's very diversified. I always believe in diversification in terms of markets served, sources of revenue, business models and a lot of companies, again, on natural hedges. And that's very important to deliver strong performance for both. Again, it's stock selection and we're looking for the same type of high-quality high growth companies. I use an analogy of knowing someone as a baby and watching it to grow into a teenager. I think having that experience and knowledge when a company was small has given me and my team more of an insight into how they would do going forward becoming larger companies. Brad Newman : Great. Well, that seems very synergistic. So that's nice to hear. We can open it up to the audience for some Q&A.
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