First American Funds has launched three large-cap funds that take a macroeconomic approach, looking at how stocks in their underlying indexes would perform in various economic and market conditions. The funds then apply quantitative statistical and computer-driven portfolio models, as well as rules to constrain risk. The goal is to outperform the benchmarks and limit risk.
The First American Quantitative Large Cap Value Fund will invest in companies that appear underpriced. The First American Quantitative Large Cap Core Fund will invest in both value and growth stocks, and the First American Quantitative Large Cap Growth Fund will seek out companies that may provide better-than-average growth potential.
Walter French, the lead portfolio manager, originated the models the funds use more than 15 years ago. Chief Economist Keith Hembre will provide the economic research to ensure that the models accurately reflect historical and current economic themes.