The fund seeks capital appreciation 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 invests in companies positioned in new or emerging industries that exhibit the potential for higher growth.
The research process is driven by fundamental analysis of one stock at a time. In selecting securities for the portfolio, the research team focuses on higher-quality companies with sustainable growth prospects.
The team also considers quality of management and superior financial characteristics (e.g., return on assets, return on equity, operating margin) in identifying companies.
In addition, the team seeks companies that exhibit successful and scalable business models.
Also, the team prefers companies in markets that are growing at rates substantially in excess of the average industry and/or the general economy.
Other factors in consideration are a company that is a leader in its industry with a proven management team whose interests are aligned with those of shareholders.
The team emphasizes a company that is experiencing upward margin momentum, a growth in earnings, revenue and sales and/or positive cash flows.
Additionally, the team favors a company that is increasing market share and/or creating increasing barriers to entry either through technological advancement, marketing, distribution or some other innovative means; or that emphasizes organic growth.
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’s investments in equity securities may include common stocks that are offered in initial public offerings.