Share Buyback Strategy

High-conviction portfolio strategy that seeks to capture the short-term excess returns associated with share repurchase announcements.

Investment Strategy

  • Construct a rules‐based strategy that holds equally weighted positions in 30 stocks based on the recency and significance of the buyback announcement in the previous three months.
  • Actively manage the strategy to optimize exposure to drivers of excess return.
  • Ongoing maintenance focuses on helping to manage portfolio risks and mitigating potential market impact while maintaining focus on drivers of alpha generation. Optimize exposure to drivers of excess return.
  • Like cash dividends, stock buybacks can be a tangible method of delivering benefits to shareholders; given the current relatively strong financial condition of corporate balance sheets and depressed stock prices, stock buybacks are expected to remain a significant capital market activity

Investing in buybacks presents an intriguing opportunity in today’s investment environment

Unique Approach

  • The EquityCompass approach seeks to capture the short-term excess returns associated with share repurchase announcements; empirical studies show that this approach is much more reliable than those based on longer term outperformance or buyback completions

Actively managed to maintain the right risk/reward balance

  • Reconstituted and rebalanced monthly to seek to optimize exposure to drivers of excess return
  • Individual security exposure is controlled; index holds equal-weighted positions in an optimized number of stocks
  • Imposes size and liquidity constraints to reduce the bias to small-cap companies
  • Minimizing market impact is a major consideration during constitution and ongoing management

At a Glance

November 2011

Asset Alternatives

Tim McCann
Genesis Guanga

Catalyst/EquityCompass Buyback Strategy Fund
Contact a Stifel Financial Advisor



 Fact Sheet


All investments involve risks, including the risk of a possible loss of principal. Foreign investments are subject to risks not ordinarily associated with domestic investments, such as currency, economic and political risks, and different accounting standards. There are special considerations associated with international investing, including the risk of currency fluctuations and political and economic events. Investing in emerging markets may involve greater risk and volatility than investing in more developed countries. Small company stocks are typically more volatile and carry additional risks, since smaller companies generally are not as well established as larger companies. The market risk associated with small‐cap and mid‐cap stocks is generally greater than that associated with large‐cap stocks because small‐cap and mid‐cap stocks tend to experience sharper price fluctuations than large‐cap stocks, particularly during bear markets. Due to their narrow focus, sector‐based investments typically exhibit greater volatility and are generally associated with a high degree of risk.

Quality Dividend Fund is distributed by Foreside Funds Distributors LLC, not an affiliate of EquityCompass.
© 2015 EquityCompass Strategies, 501 North Broadway, St. Louis, MO 63102. All rights reserved.