The initial reduction in the investment universe would come from our quantitative financial screening, based on financial metrics in our proprietary models. As long-term active investors, we invest in high conviction holdings in concentrated portfolios (typically 40 - 60 holdings). Our benchmark universes will depend on the strategy, i.e., R3000, R1000, S&P500, MSCI EAFE, etc.
Our sector analysts conduct fundamental research and apply ESG integration for attractive investment candidates generally on a bottom-up basis. All companies are given an internal ESG rating of "AAA, AA, A, B." In addition, for custom client accounts, we can take a directive on exclusionary criteria from the Investment Policy Statement.
Generally speaking, based on our financial criteria to reduce the investment universe as the first step, our experience has resulted in a reduction of less than 10% in aggregate of investments that have been reviewed by our fundamental approach and inclusive of both financial and ESG criteria (i.e., less than 10% of companies reviewed have received a "B" rating).