The Size and Style Responsive Strategy (SSR) is a proprietary investment strategy based on the Style Analysis principles of Nobel laureate William Sharpe. He provided convincing proof that Size (large vs. small market capitalization) and Style (“value” vs. “growth”) are the dominant variables in equity portfolio return. This discovery has created explosive new opportunities for savvy investors.
The chart above depicts rolling three-year return differentials between Small-Cap and Large-Cap stocks since the 1920s. Returns above zero indicate periods where Small-Cap outperforms Large-Cap; returns below indicate the reverse.
Over the long run, Small-Cap stocks have out-performed Large-Cap stocks. However, this return advantage is not consistent, as Large-Cap stocks periodically enjoy long periods (typically 3-6 years) of superior return.
Burney’s SSR strategy exploits these cycles by adjusting portfolios to capture the opportunities available during both Large- and Small-Cap market phases.
The chart above depicts rolling 12-month return differentials between Value and Growth stocks since 1979. Returns above zero indicate periods where Value out-performs Growth; returns below indicate the reverse.
Over the long-term, Value stocks have delivered higher returns; however, cycles (typically 18 – 30 months long) periodically occur where the reverse is true.
Burney’s SSR strategy captures the opportunities available during both Value and Growth market phases.
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