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By Greg Carlson | 01-30-2013 04:00 PM

Key Themes for the Small-Cap Space

Glenmede manager Chris Colarik sees growth ideas in the auto and aerospace industries, while calming political headwinds could make way for the tech sector, as well.

Greg Carlson: Hi, I'm Greg Carlson, and I'm a mutual fund analyst with Morningstar. I'm joined today by Chris Colarik, manager of Glenmede Small Cap Equity.

Chris, thanks for being here today.

Chris Colarik: Thanks for having me.

Carlson: Now, Chris you have been a comanager on this fund since 2001, is that correct?

Colarik: That is.

Carlson: And you work with Bob Mancuso, who has been a leader on the strategy for even longer than that.

Colarik: That's correct. He took over the lead role in 1993. So, he and I have been working together a little over 12 years now.

Carlson: Right. And you have got a process that you have used for the entire duration of that tenure?

Colarik: Yes, that's correct. The process begins with a quantitative model where we are looking to identify stocks that are inexpensive, beginning to have positive estimate changes that are high-quality in nature and are beginning to be recognized for those qualities by the market. And with that then we do a fundamental overlay, both from a macro perspective looking at sector allocation and industry groups, and then also within the individual securities.

Carlson: And you mentioned your overlay, it's somewhat of a theme-driven process?

Colarik: Yes, it is. When we are doing our analysis, whether it'd be from a macro perspective or looking at the fundamentals of securities, a lot of times what we find out during our conversations again whether it be Wall Street or whether it be with their internal analysts or just reading strategy pieces, themes tend to be identified to float to the top, that become obvious that we want to begin to look for names to participate in.

Those particular groups might be experiencing a growth cycle, longer-term secular trends that we are going to try to latch on to and try to benefit the portfolio from.

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