The fund seeks capital appreciation by investing in small-size U.S. companies.
The fund manages assets by hiring sub-advisers and currently works with six. The fund prefers a multi-manager investing approach. The fund can terminate or replace sub-advisers or materially alter terms of engagement or mandates without shareholder approval.
The sub-advisors operate independently and rely on fundamental research, quantitative techniques and practice value investment style.
The 23% assets are allocated to Channing Capital Management, 20% to Eastern Shore Capital Management, 18% to Neuberger Berman Investment Advisors LLC, 22% to Walthausen & Company and 15% to Heartland Advisors, Inc, and 2% to Rice, Hall, James & Associates.
Heartland Advisors favors companies that are trading at a discount to their intrinsic values and RHJ prefers to focus on companies that are generating superior free cash flow and hold them over a full market cycle.
RHJ believes that small-cap stocks are inefficient because investors have short term outlook and when profitable companies are held for a longer term they can unlock values that can generate excess returns.