The fund seeks capital appreciation by investing in companies across any size outside the United States.
The sub-adviser’s 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 securities of franchise companies.
According to the team, these companies will have a leading share of industry sales, the ability to generate consistent sales growth over time, and a track record of return on capital invested in the company with a sustainable competitive advantage.
A franchise company is one whose return on invested capital over a three-year period is above its cost of capital.
The team utilizes fundamental analysis to assess a company’s health, its competitive positioning, management strength, and competitive advantages.
The research team focuses on companies that are trading at significant discounts to their estimated intrinsic value.
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 manager primarily invests in common stocks of developed and emerging companies, as well as ADRs, which trade on U.S. exchanges.
The fund may invest significantly in securities of companies in certain sectors, such as the consumer staples and consumer discretionary sectors.
The fund invests at least 40% of its net assets in issuers domiciled outside of the United States.
Additionally, the fund is a non-diversified fund, which means that it may invest in a smaller number of issuers than a diversified fund and may invest more of its assets in the securities of a single issuer.