The fund seeks capital appreciation and income by investing in mega-and large-size companies in 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 equity securities and derivatives and other investments that have economic characteristics similar to equity securities.
In selecting securities for the portfolio, the research team focuses on a company’s dividend payments, dividend increases, payout ratios, debt coverage ratios, debt levels, earnings history, and revenue growth.
Other factors in consideration would be a company’s earnings growth, stock buybacks, valuation multiples on the basis of earnings, book value, sales, cash flow, as well as growth.
The team also evaluates a company on the basis of the Altman Z scores, and betas.
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 also purchase and sell exchange traded put options, employing an option overlay known as a Put/ Spread strategy in order to provide additional downside protection and risk-reduction.
