The fund seeks capital appreciation in the long term and a modest income by investing in companies across any size in the United States.
The investment process is designed to highlight companies in the benchmark index that are engaged in the financial services industry.
The investment team focuses on companies that derive at least 50% of its revenues from conducting business in the financial services industry.
The team considers regional and money-center banks, insurance companies, home, auto, and other specialty finance companies, securities brokerage firms and electronic trading networks, investment management firms, and publicly traded, government-sponsored financial enterprises as related to the financial services industry.
Additionally, thrift and savings banks, financial conglomerates, foreign financial services companies, electronic transaction processors for financial services companies, real estate companies, and securities exchanges are considered as part of the financial services industry.
Then the research process is driven by fundamental analysis of one stock at a time. When selecting securities for the portfolio, the research team focuses on high quality companies with the potential for capital appreciation.
The research team employs growth and value investment styles to identify potential investment opportunities.
In the growth sleeve, the team looks for companies with proven management teams, attractive business niches, superior financial and accounting practices, and consistent revenues, earnings and cash flow growth.
In the value sleeve, the team seeks companies that are estimated to trade below their fair values relative to earnings, projected cash flow, or asset value per share.
The team also focuses on companies that are out of favor for temporary reasons but have future capital appreciation potential not yet recognized by the market.
Then the manager constructs a diversified portfolio from a list of companies favored by the research team and allocates capital based on its conviction level.
The portfolio comprises of stocks of many companies that pay a dividend.
Also, the fund may purchase a security if it believes there could be an increase in value as a result of an extraordinary corporate event, a new product introduction or innovation, or a favorable competitive development, or a management change,
The fund is nondiversified, meaning it may invest a greater portion of its net assets in fewer issuers than is permissible for a diversified fund.