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 focuses on companies that are estimated to trade below their fair values.
In selecting securities for the portfolio, the research team combines top-down and quantitative analysis with fundamental, bottom-up research.
When assessing potential investment opportunities, the team considers companies that exhibit relative strength and positive identifiable catalysts.
Additionally, the team seeks companies that demonstrate consistent or positively trending fundamentals.
The team also prefers companies with favorable margins and return on invested capital), a durable competitive advantage, experienced management with appropriate incentives and a stable capital structure.
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.
In addition, the manager looks to diversify the fund’s holdings among sectors, as well as among growth and value companies.
The portfolio holds between 40 and 60 stocks.