FAQs

A: Value investing seeks underpriced, often mature companies trading below intrinsic value, while growth investing targets companies with rapidly expanding earnings and revenue, sometimes at premium valuations. Value strategies emphasize current fundamentals, dividends, and downside protection, while growth strategies emphasize future potential and capital appreciation. Many investors blend both styles to balance the strengths and weaknesses of each approach across market cycles.

A: Quality growth investing combines the growth factor (companies with above-average earnings, sales, and cash flow growth) with the quality factor (strong balance sheets, high returns on capital, durable competitive advantages, and capable management). The goal is to own businesses that compound value over time rather than simply chasing short-term price momentum.

A: Small cap growth historically offers the highest return potential over long horizons but with the most volatility. Mid caps are often referred to as the sweet spot of investing, which offer a middle ground of growth potential and stability. Large caps provide the most stability but often the lowest growth rates. A balanced approach to asset allocation typically includes dedicated exposure to all three.

A: Small cap stocks offer higher long-term return potential than large-caps and access to companies early in their compounding journey. They are structurally under-researched by Wall Street, creating pricing inefficiencies that disciplined fundamental analysis can exploit. They also offer meaningful diversification from mega-cap-concentrated large-cap growth indices.

A: Mid caps combine the growth potential of small caps with the stability of large caps, the "sweet spot." Since 1978 they have delivered higher returns than large caps with less volatility than small caps; since 1991 the S&P MidCap 400 has beaten the S&P 500 in >70% of rolling 10-year periods.

A: Active investing involves portfolio managers making deliberate buy, sell, and hold decisions in an attempt to outperform a benchmark index or achieve a specific objective, often using research, analysis, and judgment. Passive investing seeks to replicate the performance of a market index or benchmark by holding the same securities in the same proportions, with minimal trading and no attempt to outperform. Active strategies typically charge higher fees to compensate for research and management expertise, while passive strategies generally offer lower costs due to their rules-based, low-turnover approach.

A: Fundamental active investing offers the potential to outperform benchmarks, manage risk dynamically in changing market conditions, and incorporate qualitative factors that indices cannot capture, such as management quality or emerging business trends. It can also provide flexibility to avoid overvalued sectors, underweight struggling industries, or capitalize on market dislocations.

A: Active share measures the percentage of a fund's holdings that differ from its benchmark index, from 0% (identical to the index) to 100% (no overlap). A higher active share typically indicates a more differentiated, conviction-driven portfolio. All of TimesSquare's strategies have an active share of 75% or higher, reflecting a meaningfully distinct portfolio versus their relevant growth indices.

A: A separately managed account is a private investment portfolio managed by a professional asset manager on behalf of an individual investor. Unlike pooled vehicles, the investor directly owns the underlying securities in the account, which allows for greater customization, tax-loss harvesting, and the ability to exclude specific holdings based on personal preferences or values. SMAs typically require higher minimum investments and are commonly used by high-net-worth individuals working with financial advisors. Fees are generally based on assets under management rather than embedded in the product itself.

A: A mutual fund is a pooled investment vehicle that collects money from many investors to purchase a diversified portfolio of stocks, bonds, or other securities, all managed by a professional portfolio manager. Investors own shares of the fund rather than the underlying securities directly, and shares are priced once per day at the net asset value (NAV) calculated after market close. Mutual funds are registered with the SEC under the Investment Company Act of 1940 and offer broad accessibility with relatively low minimum investments. Costs typically include an expense ratio and may include sales loads or redemption fees, depending on the share class.

A: An Exchange Traded Fund is a pooled investment vehicle that holds a basket of securities but trades on a stock exchange throughout the day like an individual stock. ETFs come in passive (index-tracking) and active varieties and are widely accessible to retail investors through any brokerage account. Passive ETFs aim to replicate the performance of a specific index or benchmark, while active ETFs are managed by portfolio managers who make discretionary investment decisions in an attempt to outperform a benchmark or achieve a specific objective. ETFs offer intraday liquidity, price transparency, no minimums and generally lower expense ratios than mutual funds. Their unique creation and redemption mechanism, conducted in-kind with authorized participants, makes them more tax-efficient than most mutual funds because it minimizes capital gains distributions.

A: Neither is universally better; the right choice depends on your goals, account type, and how you plan to invest. ETFs typically offer lower expense ratios, intraday trading, and greater tax efficiency in taxable accounts, making them popular for cost-conscious investors and tactical strategies. Mutual funds remain widely used in retirement accounts, support automatic investment plans and fractional dollar purchases, and provide access to a broader range of actively managed strategies.

A: Model Account Delivery, sometimes called a model portfolio or model delivery program, is an arrangement where an asset manager provides the investment "recipe" (the model portfolio) to a sponsor or overlay manager who then executes trades and maintains the accounts on behalf of end investors. The asset manager does not have discretionary trading authority, instead delivering buy/sell instructions or portfolio weights that the platform implements. This structure is popular on unified managed account (UMA) platforms because it allows multiple strategies to coexist in a single account with centralized tax management and rebalancing. It can reduce costs and improve operational efficiency compared to traditional SMAs.

A: A Collective Investment Trust is a pooled investment vehicle maintained by a bank or trust company and available exclusively to qualified retirement plans, such as 401(k) plans, pension plans, and certain government plans. CITs are regulated by the Office of the Comptroller of the Currency (OCC) or state banking authorities rather than by the SEC, which generally results in lower operating costs and fees than those of mutual funds with similar strategies. They offer institutional pricing and customization for plan sponsors but are not available to individual retail investors outside of an eligible retirement plan. Disclosure requirements are less standardized than mutual funds, so information is typically provided directly to plan fiduciaries rather than through public prospectuses.

A: A GIPS (Global Investment Performance Standards) composite is a collection of all discretionary portfolios managed to the same investment mandate, reported under the internationally recognized CFA Institute performance standards. GIPS compliance ensures gross and net returns are calculated consistently, independently verified, and presented with full disclosures — the institutional gold standard for evaluating investment managers.