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 focuses on companies that are lagging in market price for temporary reasons and are trading at a discount to their estimated intrinsic value.
The team believes there are opportunities in slow, moderate and fast growing companies, cyclical firms, companies undergoing a turnaround, and firms with dormant assets.
Also, the team prefers companies where the management teams and businesses offer opportunities to reinvest cash flows at high rates of return.
Additionally, the team invests in domestic and foreign issuers.
The team also focuses on either growth or value stocks or both.
In addition, the team evaluates a company’s financial condition and industry position, as well as market and economic conditions.
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 looks to own companies where downside is limited but upside is significant.