The fund seeks capital appreciation in the long term by investing in companies in the United States.
The sub-advisor’s investment process is designed to identify companies in the benchmark index that are estimated to trade below their fair values on the basis of estimated future earnings and cash flow.
The investment team prefers companies that are lagging in market price for temporary reasons and trading at a significant discount to their estimated intrinsic value.
Next, the research team screens a dynamic universe of the 500 largest companies to select securities for the portfolio.
Then the team combines fundamental research and proprietary modeling to rank companies from the cheapest to the most expensive based on current share price relative to estimated long-term earnings power.
Additionally, the team narrows the investable universe to a list of the cheapest-ranked companies.
Then the manager constructs a portfolio of stocks of companies with profits that are less than estimated, a business plan to restore earnings to normal, and a durable business advantage.
The fund may invest up to 20% of its net assets in debt securities, including those rated below investment-grade.
The fund may also invest up to 20% of its net assets in securities of foreign issuers, including depositary receipts.