Equity

Large Value SMA

Russell 1000® Value Index
Benchmark name
1/1/2010
Inception date
Special Global Equity Team
Team
$157.4M
Strategy assets
Data as of 6/30/2025
SMA overview
Pursuing alpha with a CPA-based approach
The Large Value SMA aims to deliver long-term capital appreciation by investing primarily in large-capitalization companies by using a disciplined, consistent valuation process that evaluates each stock’s upside reward relative to its downside risk.

Accounting expertise and processes guide decision-making.  

Key differentiators

  • Employs rigorous qualitative research and a risk-aware portfolio construction process to allow security selection to determine the portfolio's outcome
  • Seeks to own companies that possess the following three criteria: a durable asset base, flexible balance sheet, and strong and sustainable free cash flow
  • Invests when target company’s price has relatively meaningful upside potential versus downside risk

General facts

Weighted average market cap

$387.28B

(as of 6/30/2025)

Dividend yield

1.65%

(as of 6/30/2025)

Q3 Recap and Q4 Outlook

Bryant VanCronkhite, senior portfolio manager and co-head of the Special Global Equity team, discusses an eventful Q3 and what to watch in Q4.

Transcript

John Ognar: Bryant, we just wrapped up the third quarter. And in the small- and mid-cap space, we saw a change in leadership as that rally extended into the third quarter. I just wonder what you were seeing across your strategies.

Bryant VanCronkhite: Yeah, in small- and mid-cap value, we saw high beta outperform low beta and low ROE (return on equity) beat high ROE. And that's what we call a low-quality rally, which is completely standard after a bear market correction, which we had a very brief one at the end of Q1, early Q2. I liken this to going to a children's birthday party where there's a pinata. And the pinata breaks, which in this case, the pinata breaking was the 90-day pause on tariffs. That starts the free-for-all. The kids all run in. They start grabbing as much candy as they can—not really paying attention to what they're grabbing. They grab it all. And that's what we just went through. That is the classic investor behavior after a bear market. You go and grab risk. You grab economic exposure. But we're about to enter the next phase of the economic cycle, which is when the kids sort out the candy, right? They say, well, I don't really like this. Let me throw this out. That's your high beta, low-quality non-earner that investors get rid of. And they say, oh, I really love this. Let me trade for more of this. And that's the high-quality, cash-flowing, good balance sheet companies. And what we're going to see next is the sifting through of what people grabbed in the last few quarters. And the character will change from low quality to more traditional higher quality going forward from here.

John: And I think the other theme we saw in the quarter was a continuation of this narrow focus on the AI theme. As investors look toward the next phase of that AI buildout, how are you approaching that?

Bryant: Yeah, it's especially true as you go up cap to large cap. The AI early winners have dominated the market and that continued into Q3. I don't have any reason to believe they're going to begin to fall off as leaders, but I believe we're going to see a broadening. If AI is the future we all think it's going to be, it's not going to happen without a broadening opportunity for other companies. So, we're going to see more edge devices, more handheld devices, more computers that require AI technology to be created. And we're going to see those companies need different semis and different tests and packaging. We're going to need companies like consultants to help us implement these things. We're going to see the materials companies, like copper producers or chemical producers, require more demand for their products to build more products. We're going to see industrial companies and transportation begin to participate. And so, if AI is what we think it's going to be and we're getting close from buildout to implementation, I don't see how that can happen without a broadening of the market and more companies participating as we go forward.

John: And as we begin the fourth quarter, what do you think are going to be the major events that investors are going to react to, and what's your outlook for the rest of this year?

Bryant: We start the fourth quarter with a government shutdown, which isn't ideal, but the market's not going to care as long as it doesn't go on for very long. So, let's assume that gets taken care of. Then, we head into earnings season. We get an update from corporates as to how things are looking in their view. And where is demand changing? Where is it growing? Where is it shrinking? And that's going to be important. It's especially important this time because expectations are rising. Typically coming into the back of the year, we see expectations falling and setting lower bars. We have the opposite this time, which could create more volatility. And then, beyond that, we really want to listen to companies about how they are going to absorb the benefits of the new One Big Beautiful Bill from a tax situation. And are they going to give us some teasers about how they're going to pass on pricing as tariffs begin to really start to bite when it comes to cost of goods sold? These are the things we're listening for. I expect volatility to continue to grow from here, given the uncertainty and given the higher bar. But that, again, is an opportunity for us to make smart decisions going forward.

John: Thanks, Bryant. Really appreciate your insights, and we look forward to hearing from you next quarter.

Bryant: Sounds good.

Performance

Average annual returns

Average annual returns

(as of 6/30/2025)
1/1/2010
1M
3M
YTD
1Y
3Y
5Y
10Y
Inception
Composite (Pure Gross)
3.89
6.79
8.87
15.74
18.46
15.78
10.88
12.02
Composite (Net)
3.63
5.98
7.22
12.27
14.94
12.36
7.60
8.73
Russell 1000® Value Index
3.42
3.79
6.00
13.70
12.76
13.93
9.19
10.81
S&P 500 Index
5.09
10.94
6.20
15.16
19.71
16.64
13.65
13.85

One-month, three-month and year-to-date returns are not annualized.

Performance is historical and does not guarantee future results. For more information, please refer to the GIPS composite report found in the documents section.

Calendar year

Calendar year

(as of 12/31/2024)
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
Composite
17.41
14.60
-5.35
23.88
6.63
30.50
-4.62
16.83
8.25
-0.36
Benchmark
14.37
11.46
-7.54
25.16
2.80
26.54
-8.27
13.66
17.34
-3.83

Performance is historical and does not guarantee future results. For more information, please refer to the GIPS composite report found in the documents section.

Performance and volatility metrics

Performance and volatility metrics

(as of 6/30/2025)
3 Year 5 Year 10 Year
Alpha 5.84 2.20 1.89
Beta 0.92 0.96 0.96
Downside Market Capture Ratio 81.49 93.59 96.67
Information Ratio 1.61 0.55 0.54
R2 0.95 0.96 0.96
Sharpe Ratio 0.92 0.83 0.58
Standard Deviation 14.83 15.44 15.38
Tracking Error 3.53 3.36 3.13
Upside Market Capture Ratio 103.90 99.63 101.55
Correlation 0.98 0.98 0.98

Composition

Top 10 holdings

Top 10 holdings

(as of 6/30/2025)
Security
SMA
Canadian Pacific Kansas City Limited
4.57%
Citigroup Inc.
4.29%
Alphabet Inc. Class C
4.09%
Bank of America Corp
3.87%
Intercontinental Exchange, Inc.
3.79%
Mondelez International, Inc. Class A
3.25%
Labcorp Holdings Inc.
2.97%
Cigna Group
2.86%
Berkshire Hathaway Inc. Class B
2.82%
D.R. Horton, Inc.
2.78%
Top 10 represents 35.30% of market value

Largest company weights are based on market value of the representative account and not necessarily held in all client portfolios. The information shown is not intended to be, nor should it be construed to be, a recommendation to buy or sell an individual security. A list of all holdings from the prior one-year period is available upon request.

Sector allocation

Sector allocation

(as of 6/30/2025)
Type
SMA
Benchmark
Cash & equivalents
1.53% -
Communication services
4.09% 7.60%
Consumer discretionary
8.97% 7.60%
Consumer staples
7.61% 8.14%
Energy
5.65% 5.88%
Financials
21.30% 22.73%
Health care
13.84% 11.68%
Industrials
17.55% 13.07%
Information technology
9.79% 10.56%
Materials
3.10% 4.13%
Real estate
3.80% 4.22%
Utilities
2.77% 4.41%

Sector weighting is based on a representative account within the Allspring Global Investments composite and may have changed since the date specified. Percent total may not add to 100% due to rounding.

Documents

Literature Date
Fact Sheet 6/30/2025 Download
Our team
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The team follows a fundamental approach of identifying companies with competitive advantages, sustainable free cash flow, and flexible balance sheets, helping deliver long-term capital appreciation.

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Market Risk: Stock values fluctuate in response to the activities of individual companies and general market and economic conditions. Management Risk: Investment decisions, techniques, and analyses implemented by the manager may not lead to expected returns of the team. Style Risk: Style factor exposure including but not limited to, beta, growth, value, liquidity, etc. can perform differently and shift in and out of favor through a market cycle.

Allspring Managed Account Services (the firm) is a unit within Allspring Global Investments and is responsible for the management and administration of the Allspring Funds Management, LLC, retail separately managed account portfolios (wrap portfolios). Allspring Funds Management acts as a discretionary manager for separately managed accounts ("SMA") and as a non-discretionary model provider in a variety of managed account or wrap fee programs (“MA Programs”) sponsored by third party investment advisers, broker-dealers, or other financial services firms (a “Sponsor”). When acting as non-discretionary model provider, Allspring Funds Management responsibility is limited to providing non-discretionary investment recommendations (in the form of model portfolios) to the Sponsor. The Sponsor may use these recommendations in connection with its management of MA Program accounts. In these “model-based” programs, the Sponsor serves as the investment manager and maintains trade implementation responsibility.