The fund seeks capital appreciation in the long term by investing in companies across any size outside the United States.
The sub-adviser’s 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.
The fundamental, bottom-up investment process starts by identifying foreign companies that exhibit superior and improving prospects.
The investment team also considers environmental, social and governance factors when assessing investment opportunities and this analysis forms an integral part of the quality rating for all companies.
Then the team focuses on sustainable businesses and the company's ESG performance.
The research team evaluates companies on the basis of quality and price. Next, the team assigns each company a proprietary overall and also an ESG-quality rating ranging from 1 to 5 (1 indicating leaders and 5 indicating laggards).
The team prefers companies rated 3 or better on both the overall and ESG-quality rating. In the overall quality sleeve, the manager evaluates a company’s growth prospects and balance sheet strength.
In the ESG-quality sleeve, the manager evaluates the company’s ownership structures, governance and management quality as well as potential environmental and social risks.
The fund will not invest in companies that have failed to uphold one or more principles of the UN Global Compact, an industry tied to controversial weapons; or a revenue contribution of 10% or more from the manufacture or sale of conventional weapons or weapons systems; or a revenue contribution of 10% or more from tobacco or are tobacco manufacturers, or more from the extraction of unconventional oil and gas, or a revenue contribution from thermal coal extraction.
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.
Additionally, the fund may invest in securities of any market sector and may hold a significant amount of securities of companies, from time to time, within a single sector.