The fund seeks capital appreciation in the long term by investing in small-size companies in 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 invests in companies that are estimated to trade below their fair values relative to assets, earnings, cash flow, or business franchises.
The team also focuses on companies that are lagging in market price for temporary reasons but have good prospects for capital appreciation.
In addition, the team looks for companies that are inexpensive on the basis of earnings, book value, or cash flow, relative to the Index, or its peers.
The team also evaluates whether a company offers above-average dividend yield and a plan to improve the business through restructuring; and/or a sound balance sheet.
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 invest in foreign stocks.