Focused Large-Cap Growth Portfolio

Class A: SSFAX • Class B: SSFBX • Class C: SSFTX

Janet WalshMeet Janet Walsh   

Janet Walsh joins SunAmerica Asset Management Corp. as the Portfolio Manager of the SunAmerica Focused Large-Cap Growth Portfolio. Ms. Walsh has over 15 years of investment experience, with extensive expertise in the technology and telecom sectors.

 

 

We sat down with Janet Walsh to discuss her investment philosophy and views on growth investing.

 

Q: Can you discuss your investment philosophy?
A: I invest by employing a growth-oriented approach based on fundamental research, the identification of cyclical and secular themes, and risk-aware portfolio construction.

Q: What characteristics are important for your stock selection process?
A: I expect to drive performance primarily through stock selection, based on fundamental research. Compelling opportunities may include companies with accelerating, sustainable or re-accelerating revenue and earnings growth which can lead to earnings surprises. As such, I seek companies with market dominance or share gain potential, pricing power, and high sustainable returns. Management quality and depth, brand identity, and defensible business models (or competitive moats) are important.

Q: What other factors do you consider?
A: Understanding market sentiment and expectations can be critical to growth investing, particularly in the shorter term. Tracking the company’s strategy and guidance statements, monitoring the technical market trends underlying stock trading, and keeping abreast of buy-side and sell-side views help provide me a window into the prevailing psychology surrounding a stock and can help assess whether there is upside opportunity in an investment idea driven by a sentiment shift. 

Q: Is the portfolio limited to large-cap holdings?
A: While the investment universe is generally defined by its Russell 1000 Growth Index benchmark, the Fund may hold stocks that fall outside the Index as well, given that growth investment opportunities can change over time. I will also consider smaller-cap companies and foreign issuers in cases where our research uncovers unique opportunities.

Q: What makes growth investing unique?
A: Growth holdings must be intensively researched, requiring the constant monitoring of fundamental and competitive trends—shifts in fundamentals often happen on a rapid timeline and result in dramatic stock price movements. Growth stocks are driven by cyclicality—whether economically driven, supply-driven, or product-cycle-driven—and my investment strategy will adjust depending on where I believe we are in such cycles.

Q: What signals indicate it is time to exit a position?
A: A particularly important aspect of growth investing comes in the decision to sell. While I believe that company-specific fundamentals determine stock valuations in the longer term, in the short run, market psychology can overwhelm fundamentals. Security positions are trimmed or sold when a stock’s price moves ahead of the company’s fundamentals or when fundamentals deteriorate. A sale may also be prompted when changes in the relative opportunities offered by various securities warrant a position change. Market volatility creates an opportunity to vary, in a sensible manner, the relative portfolio weights of favored holdings. I am inclined to add to positions on price weakness and trim into price strength, assuming company fundamentals are intact and that the stock price trend has not been violated. However, when new information disproves the fundamental thesis behind a position, I exit.

 

Prior to joining SunAmerica in September 2011, Ms. Walsh was a Portfolio Manager and Global Technology Sector Head at AllianceBernstein L.P. She also headed the firm’s global technology and telecommunications analyst team, and more recently managed a global diversified growth portfolio. Ms. Walsh holds an A.B. cum laude from Harvard University and an M.B.A. from the Columbia University Graduate School of Business.