Quality Growth Sell Discipline

The Haverford Investment Committee adheres to the following discipline within the context of our Quality Investing strategy:

• Price Appreciation -
  We will sell a portion of the position when it becomes over-weighted in the portfolio.  For tax-sensitive clients, we take particular care to weigh the benefits of reduced risk and opportunity costs versus the client's budgeted capital gains and the tax costs of doing the trade.
• Fundamental Deterioration -
  We regularly review holdings with a focus on earnings, dividends, and financial strength. A significant deterioration in the business prospects, performance, or financial strength is often a reason to sell.  We continually monitor stock-price performance, analysts' estimate revisions, earnings surprises and corporate events for early warning signs of fundamental deterioration.  A position will be sold if the stock loses its A-rating or eliminates its dividend.
• Enhanced Opportunities -
  We may sell any stock and replace it with a stock that has more attractive risk/return characteristics.
  

It is important to note that Haverford’s investment process, due to its focus on long-term fundamentals, typically leads to very low portfolio turnover of 15–20% per year.