The fund seeks capital appreciation in the long term by investing in mega-and large-size companies in the United States.
The sub-adviser employs a value approach in selecting investments and believes that stock prices fluctuate around the true value of a company.
The investment process is driven by quantitative techniques to identify companies from the list included in the benchmark index that are undervalued relative to their long-term earnings prospects or asset values.
Next, the research team relies on valuation multiples to identify companies that are inexpensive on the basis of earnings, book value, sales and dividend yield.
Then the team assesses a company’s products and services, opportunities for future growth or turnaround, track record of generating consistently strong returns on shareholder capital, and balance sheet strength and liquidity.
In addition, the investment team considers factors such as the management’s track record and background, and the company’s global business strategy and current valuation.
The manager constructs a non-diversified portfolio between 25 and 30 securities from the list of companies recommended by the research team.
Also, from time to time the fund may invest a significant portion of its assets in a limited number of industry sectors, but will not concentrate in any particular industry.
The fund may invest up to 20% of its net assets in high quality money market instruments and repurchase agreements. The fund deploys capital in companies that are facing what it estimates are temporary issues.
The sub-adviser looks for well-established companies that have a proven management and financial strength and are most likely to prosper under various economic conditions.