Every few years, a “new” strategy captures the market's attention. A theme takes hold, the financial press hypes it, inflows follow, and investors who weren't positioned for it feel like they missed something. Growth or value. Passive or active. This sector or that one.
Core equity investing doesn't make that list. And according to Dave Stamm, Portfolio Manager and Senior Vice President at Dana— someone who has spent nearly 20 years building and stress-testing core strategies through every kind of market — that's exactly why investors should pay closer attention to it.
"If I can build a core solution that outperforms the S&P 500 Index over the long term with less risk than the market, is that boring?" Stamm asks. It's a fair challenge. The assumption that "boring" and "foundational" are the same thing may be costing investors more than they realize.
Every portfolio needs an anchor. A core equity strategy is built to be just that — benchmarked against a broad-based index and designed to participate in market appreciation across styles and sectors. It's not a bet on growth. It's not a tilt toward value. It's a total market solution.
At Dana, we put this into practice by maintaining sector exposures in line with the benchmark across all 11 GICS sectors, while holding roughly equally weighted positions in a diversified set of companies spanning market caps and investment styles. The goal isn’t to predict which style will win in a given year. It’s to be positioned well regardless.
That's our definition. The case for it runs deeper.
Most investors believe they're diversified. Many aren't, at least not in the way they think.
Consider that today's growth indices are highly concentrated in tech stocks. When investors allocate to growth and value separately, they're not balancing a portfolio; they're placing two large sector bets.
There's also a subtler problem. Style box mandates force managers to sell holdings when a stock drifts across an index boundary. A company that started as a value stock and grew into something more growth-oriented gets sold — not because the investment thesis changed, but because the classification did. The investor loses exposure to a good idea for a bureaucratic reason.
Core equity managers aren't constrained that way. They can follow conviction wherever it leads. This is particularly relevant now. Rate uncertainty, sector rotation, and macro volatility have punished investors who've been forced to pick a lane. When styles rotate, the investors with the steadiest footing are the ones who never chose a lane to begin with.
The most common objection to core equity is opportunity cost: "I might miss the next big growth idea." While it's a reasonable concern, it also misses something.
The major growth themes of recent years — AI, electrification, autonomous vehicles, data center buildouts — have representation in a well-constructed core equity portfolio. So do the classic value characteristics: stable consumer staples, dividend-paying REITs, utilities, value financials. Core isn't a compromise between two views. It's an intentional way to hold both, stay diversified, and participate in market appreciation regardless of which style is in or out of favor.
There's also a long-term compounding argument. Minimizing the swings in performance has the potential to produce better outcomes over full market cycles. An investor who avoids the worst drawdowns by allocating to a stable, balanced core portfolio can compound more effectively than one who chases returns through higher-risk style tilts.
Dave Stamm puts it plainly: “Own core and stay diversified — no matter what the market does.” After nearly 20 years of managing core strategies through every kind of market, it's the simplest summary of what the approach is designed to do.
Dana has been managing core equity strategies for decades. However, it's the consistency of the approach through different environments that Dave believes sets the firm apart.
The philosophy has remained the same through multiple market cycles: sector-neutral, fully invested, equal weights across sectors designed to minimize market-timing bets, style biases, and emotional responses to short-term conditions. A repeatable process aimed at outperforming the benchmark with less volatility over time.
That process has also evolved. Since 2016, the team has refined how it values different parts of the growth market, recognizing that a slow-growing pharmaceutical company and a fast-growing medical equipment provider can't be evaluated on the same terms. The team has also built in more flexibility on position sizing, allowing individual holdings to approach benchmark weights when conviction warrants it.
"The philosophy and portfolio construction process has remained consistent through market cycles," Dave says. "A repeatable, disciplined process is a hallmark of what we do."
For us, core equity isn't a response to today's market. It's been our orientation from the beginning, and that kind of institutional continuity, tested and refined across market cycles, is difficult to replicate.
There's a version of this conversation where core equity investing gets framed as the conservative choice — what you invest in when you don't have conviction. That’s simply not true.
Core equity takes a specific, defensible view: that style-box investing introduces unnecessary constraints, that concentration risk is underappreciated in most portfolios, and that participating in broad market appreciation with less volatility is a better long-term strategy than trying to pick winners by style.
The core-and-satellite framework makes this concrete. When a stable, diversified core holding anchors the portfolio, investors have real freedom to pursue higher-risk strategies at the margins, knowing the foundation is solid. Without that foundation, every speculative bet carries more weight than it should.
Core isn't boring. It's foundational. And in today's environment, foundational is exactly what investors need.
What is core equity investing?
Core equity investing is a strategy designed to provide broad, balanced exposure to domestic equities, typically benchmarked against a broad-based index. Rather than tilting toward growth or value, a core equity strategy holds positions across the full market — covering multiple sectors, sizes, and styles — with the goal of participating in market appreciation over time while managing volatility.
What is the difference between an actively managed core equity portfolio and a broad-based index fund?
A passively managed index fund delivers market returns minus a fee. By design, it is not built to outperform. An actively managed core equity strategy benchmarks against an index but aims to generate better risk-adjusted returns through disciplined stock selection and portfolio construction. The goal isn’t to deviate dramatically from the index. It is to improve on it while managing risk.
What are the risks of style box investing?
Style box investing — dividing equity exposure into separate growth and value mandates — can create unintended concentration risk. Growth indices recently have carried heavy sector tilts, while value indices have leaned into financials. Investors who allocate to each separately may believe they're diversified when they're actually holding two large, opposing sector bets. Style box mandates also force managers to sell holdings when a stock crosses an index boundary, regardless of the underlying investment thesis.
How does core equity investing perform in volatile markets?
Core equity strategies are built for volatility. By spreading exposure across all major sectors at roughly equal weight and avoiding concentrated style bets, a core portfolio has built-in diversification that can help smooth out market swings. That breadth of exposure — across size, style, and sector — is what makes core equity resilient when market conditions shift.
What is a core and satellite portfolio strategy?
The core-and-satellite approach uses a diversified core equity holding as the stable foundation of a portfolio, with smaller "satellite" positions in higher-risk or more specialized strategies on the edges. The stability of the core is what gives the satellite positions room to take risk. Without a solid foundation, every speculative position carries more weight than it should.
Is core equity investing right for long-term investors?
Core equity investing works well for long-term investors because it's designed to participate in broad market appreciation across full market cycles, regardless of which style is in or out of favor at any given time. By minimizing performance swings and avoiding style-driven volatility, a core strategy allows investors to compound more effectively over time.
How long has Dana been managing core equity strategies?
Dana has been managing core equity strategies for nearly 40 years, with a philosophy and portfolio construction process that has remained consistent across multiple market cycles. The approach has been refined over time — including updates to valuation methodology and position sizing— but the foundational principles of sector neutrality, full investment, and a repeatable process have guided the firm throughout.