The fund seeks capital appreciation in the long term by investing in small-size companies in the United States.
The investment process starts with a list of companies in the benchmark index and the research team utilizes quantitative techniques and fundamental analysis to identify investment opportunities.
Next, the research team utilizes a momentum investment style to identify companies that exhibit positive momentum characteristics.
The team believes a security to have positive momentum if it has outperformed other securities on a relative basis over a recent time period.
Factors considered for relative performance include price momentum, earnings momentum, or other types of momentum measured over time periods ranging from one to twelvemonths.
When selecting securities for the portfolio, the team may employ tax management strategies which consider the potential impact of federal income tax on shareholders’ investment return.
Then the manager constructs a portfolio of stocks from a list of companies favored by the research team and allocates capital based on its conviction level.
The fund may also invest in or use financial futures contracts and other types of equity-linked derivative instruments such as equity swaps and equity index swaps, as well as exchange-traded funds.
A portion of the fund’s net assets may be held in cash or cash-equivalent investments including, but not limited to, short-term investment funds.
Additionally, the fund may lend its portfolio securities to certain types of eligible borrowers.