Fact Sheet

PHILOSOPHY

We believe that in-depth fundamental valuation-based analysis can produce superior investment results. We invest in publicly traded companies, not sectors or macroeconomic trends. We invest in managers with experience and proven skill that is evident in strong track records. People make money, things don’t. We thoroughly evaluate how management built a business that produces persistent profitable growth, making it a possible investment candidate. We regularly meet with managers to learn how they will continue to be reliable stewards of our and our clients’ money.

STRATEGY

Capital Counsel invests in 15 to 25 large-cap and mid-cap companies based in the U.S. or with large U.S. operations. We choose these stocks from ideas generated through the investment team’s bottom-up research efforts. Our investment approach is guided by these principles:

  • We are informed, long-term investors in companies with managements who have achieved persistent earnings growth. Their continuing ability to deliver this growth allows us to take advantage of compounding annual returns.
  • We value a company as we would if we were taking the entire company private.
  • We are less concerned about short-term price fluctuations than we are about finding the right investments that earn high returns and increase in value over time. Stock selection is the core of our investment approach. We learn how the companies operate and why they achieve consistently superior returns.
  • We invest in companies that have sound capital structures, achieve consistently high levels of profitability, and finance their growth using free cash flow and not debt. We avoid investing in industries with regulated prices.
  • We invest in our companies for an average of five years and have held many for more than a decade. This low turnover reduces taxes and trading expenses.

*Past performance is not indicative of future results.
*The presented information is supplemental to the GIPS disclosure presentation. A full presentation is an integral part of this report and is available on request.

Disclosures

Foundation & Endowment Composite contains fully discretionary taxable and tax exempt foundation and endowment accounts. For comparison purposes, the composite is measured against the S&P 500 Index which includes the reinvestment of income. The minimum account size for this composite is $400 thousand. Equities must comprise at least 50% of each account. No one equity can hold more than 40% of each account’s combined assets. As of January 1, 2015, the composite excludes accounts that hold more than 30% fixed income holdings and/or hold more than 30 equity securities. These guidelines were added in addition to the existing composite inclusion guidelines to more accurately reflect the investment strategy.

Capital Counsel LLC is an independent Registered Investment Adviser. The Foundation & Endowment Composite was created with data commencing April 1, 2005. Prior to December 2006, the composite was named the Foundation Composite. The firm maintains compliant presentation and a complete list of composite descriptions, which are available upon request by emailing info@capcounsel.com, along with additional information regarding policies for valuing portfolios, calculating performance and preparing compliant presentations.

Capital Counsel LLC claims compliance with the Global Investment Performance Standards (GIPS®). Capital Counsel LLC has been independently verified for the periods November 1, 1999 through September 30, 2018.

The verification and performance examination reports are also available upon request. Results are based on fully discretionary accounts under management, including accounts no longer with the firm. The U.S. Dollar is the currency used to express performance. Returns are presented net of actual management fees and include all the reinvestment of income. The management fee schedule is as follows: 1.00% on all assets. Actual investment advisory fees incurred by clients may vary.

Client portfolio holdings may change, and stocks of companies noted may or may not be held by one or more client portfolios from time to time. Investors should not consider references to individual securities as an endorsement or recommendation to purchase or sell such securities. Transactions in such securities may be made which seemingly contradict the references to them for a variety of reasons, including but not limited to, liquidity to meet redemptions or overall client portfolio rebalancing. Investing in the stock market involves gains and losses and may not be suitable for all investors. Investment return and principal value of an investment will fluctuate.

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