The fund seeks total return in the long term and current income by investing in companies outside 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 Infrastructure Investments. Infrastructure Investments include any assets or projects that support the operation, function, growth or development of a community or economy.
The infrastructure assets in which the fund invests include assets related to transportation, transportation equipment, electric utilities and power, energy, communication networks and equipment, water and sewage treatment, social infrastructure, metals, and mining.
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 may invest in Infrastructure Investments in the United States or in foreign countries, including emerging market countries. However, the fund generally seeks to invest principally in instruments denominated in U.S. dollars.
Additionally, the fund may invest more than 50% of its net assets in investment grade investments and unrated instruments to be of comparable credit quality.
The fund seeks to replicate total return performance of the benchmark index before fees and expenses by investing in companies in the United States.
The investment process focuses on companies that seek capital appreciation and current income in excess of the Shiller Barclays CAPE US Sector TR USD Index.
The strategy employs the Cyclically Adjusted Price Earnings (CAPE) ratio to identify investment opportunities. The classic CAPE Ratio assesses equity market valuations and averages ten years of inflation adjusted earnings to account for earnings and market cycles.
Next, the Index uses a relative version of the classic CAPE Ratio to identify undervalued sectors while also seeking to exclude a sector that may appear undervalued.
Each month, the Index’s methodology ranks eleven US sectors based on a modified CAPE Ratio and a twelve-month price momentum factor. The Index methodology selects the five US sectors with the lowest modified CAPE Ratio, the sectors that are the most undervalued according to the CAPE Ratio. Only four of these five sectors, however, end up in the Index for a given month, as the sector with the worst 12-month price momentum among the five selected sectors is eliminated.
The Index methodology allocates an equally weighted allocation to the four remaining sectors either through sector focused ETFs or derivatives based instruments.
The fund may invest a portion of its assets in debt instruments issued or guaranteed by companies, financial institutions and government entities in emerging market countries.
