The fund seeks primarily total return in the long term and secondarily capital appreciation by investing in mid-and large-size 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.
The process employs an investment approach designed to track the performance of the Redwood AlphaFactor Tactical International Index (the International Index).
In selecting securities for the portfolio, the research team focuses on companies’ net share count reduction, free cash flow growth, dividend yield, and volatility and debt/asset ratios.
The team also employs a multi-factor tactical risk management overlay that seeks to identify periods of above-average risk.
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 portfolio typically holds approximately 100 stocks. However, the fund may be invested in more or less than 100 stocks at any given time.
Also, the fund will be invested in a diversified portfolio of securities of developed international markets and emerging market countries or investments that are economically tied to equity securities (i.e., derivatives) such as American Depositary Receipts, equity options, swaps, convertible bonds and warrants.
In addition, the fund seeks to approximate the investment performance of the International Index by investing in a portfolio of securities that generally replicates the International Index.
The fund may concentrate its investments in a particular country, region, industry or group of industries to the extent that the International Index concentrates in a country, region, industry or group of industries.
In response to adverse market conditions, the fund may be invested for temporary, defensive purposes in money market instruments.
These money market instruments may include treasury bills, certificates of deposit and commercial paper and other short-term instruments, money market funds, and in short and intermediate-term U.S. or foreign Treasury bond or bond funds.
