The fund seeks total return by investing in companies across any size in the United States.
The sub-advisor’s investment process is designed to highlight companies investing in the real estate sector, such as Real Estate Investment Trusts.
The investment team considers a company to be participating in the real estate sector if the company derived at least 50% of its total revenues during its most recent completed fiscal year from the ownership, construction, development, financing, management, renting, leasing or sale of, or has at least 50% of its assets invested in commercial, industrial or residential real estate.
Then the research process is driven by fundamental analysis of one stock at a time. The research team’s evaluation of a company includes net asset value estimation, earnings forecast, and balance sheet analyses.
Furthermore, the team also focuses on company specific ratio comparisons by type of property, geographic location and peer group.
As part of its qualitative analysis, the team includes visits to the property and meeting with management teams as well as tenant credit quality and diversification.
Then the manager constructs a portfolio from a list of companies in the benchmark index favored by the research team and allocates capital based on its conviction level.
The focused portfolio typically holds 25 to 35 investments in REITs and other companies in the real estate sector, diversified by property type, geographic location and issuer strategy.
Additionally, the fund may invest up to 20% of its net assets in securities of foreign issuers, including investments in such companies in the form of American Depository Receipts, Global Depository Receipts and European Depository Receipts.
The fund may also invest up to 20% of its net assets in fixed-income securities with maturities typically between one year and ten years.
