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Large Cap Value Equity

Our Large Cap Value strategy is implemented by constructing portfolios of individual stocks, selected on a bottom-up basis, reflecting all three value characteristics: a price/earnings and price/book below the market and a dividend yield above the market. Through the research-intensive process, our seasoned investment team identifies large, well-known companies that are undervalued and temporarily out-of-favor for reasons we can identify and understand. Our independent, in-depth research provides the conviction and patience necessary to invest in a business where negative, short-term sentiment exists and the discernment to sell, as the company becomes fairly valued.

Strategy Summary
Asset Class U.S. Equity
Investment Style Value
Portfolio Benchmark 1: S&P 500® Index
Portfolio Benchmark 2: Russell 1000® Value Index
Portfolio Assets $33,062 MM as of 12/31/2018
Commingled Fund Open
Separate Account Open
Mutual Fund Touchstone Value Fund: TVLIX

Investment Process

Our approach to the equity market is based on the underlying philosophy that markets are inefficient. These inefficiencies can best be exploited through adherence to a value-oriented investment process dedicated to the selection of securities on a bottom-up basis. We do not attempt to time the market or rotate in and out of broad market sectors, as we believe it is difficult, if not impossible, to add incremental value on a consistent basis by market timing.

We stay fully invested with a defensive, conservative orientation based on our belief that superior returns can be achieved while taking below average risks. We implement this strategy by constructing portfolios of individual stocks that reflect all three value characteristics: price/earnings and price/book ratios below the market and dividend yields above the market (S&P 500). While we are exacting in our definition of value, we are equally demanding in our pursuit of quality companies. We look at stocks for what they are - an ownership interest in a business - and never want to own an interest in a company that has a deteriorating business. We seek companies with profitability and earnings growth greater than the market.

Our strategy of emphasizing low price/book ratios as well as high dividend yields provides a measure of protection in down markets, helping to preserve assets. In periods of economic recovery and rising equity markets, profitability and earnings growth are rewarded by the expansion of price/earnings ratios and the generation of excess returns.

Our greatest source of value added comes through individual stock selection. The vast experience of Barrow Hanley's large cap investment team, both in absolute terms and in years working together, is where the value is added in the qualitative part of the decision-making process. The Barrow Hanley team not only has the experience necessary to identify the reasons for a temporary undervaluation of a company's shares in the market, but also has the conviction and patience to invest in shares of stock of the business on a contrarian basis.

Portfolio Characteristics as of 12/31/2018

  Portfolio Benchmark1 Benchmark2
P/E Ratio (Trailing 12 Months) 14.9 16.3 12.5
P/B Ratio 2.1 2.8 1.8
Weighted Average Market Cap ($B) 123.3 200.8 118.0
Median Market Cap ($B) 46.8 18.5 8.3
Dividend Yield 3.0 2.1 2.8
1S&P 500® Index
2Russell 1000® Value Index
Top Holdings as of 12/31/2018
Dollar General 3.9%
Comcast 3.5%
Medtronic 3.4%
Air Products & Chemicals 3.4%
Lowe's 3.4%
ConocoPhillips 3.3%
Pfizer 3.3%
CVS Health 3.1%
Phillips 66 3.0%
Wells Fargo 3.0%
Sector Weightings as of 12/31/2018
Health Care 20.4%
Financials 16.7%
Energy 14.4%
Information Technology 11.9%
Consumer Discretionary 9.9%
Industrials 8.2%
Materials 6.0%
Communication Services 4.3%
Utilities 4.0%
Consumer Staples 3.7%
Real Estate 0.5%
Performance as of 12/31/2018
Annualized Portfolio Returns (%)

*3 Month returns are not annualized.


Barrow Hanley's returns are shown before investment management fees and custody expenses. Index returns do not reflect transaction costs, management fees, and other expenses. Performance is expressed in U.S. currency. Holdings and statistics are presented as supplemental information to the BHMS Large Cap Value Equity composite. A full disclosure presentation may be accessed from the link above. Barrow, Hanley, Mewhinney & Strauss, LLC claims compliance with the Global Investment Performance Standards (GIPS®).

All institutional product information has been provided by Barrow, Hanley, Mewhinney & Strauss, LLC. Any questions about this material or requests for additional information may be made directly to the firm from the "Contact Us" link above.

Mutual Fund Disclosure

Investing involves risk including loss of principal. For more information pertaining to the mutual fund products above, including investment objectives, risks, charges and expenses, obtain a prospectus. Read the prospectus carefully before investing or sending money. Neither this material nor any accompanying oral presentation or remarks by a representative of the distributors is intended to constitute a recommendation of the funds or a determination of suitability for any investor.

‡ Touchstone Value Fund is distributed by Touchstone Securities, Inc., which is not affiliated with Barrow, Hanley, Mewhinney & Strauss, LLC or any other affiliate. For more information on this Fund and to obtain a prospectus, please visit or contact Touchstone at 1-800-543-0407.

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