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.
The process relies on multiple investment styles, such as value, momentum and quality.
Next, the research team focuses on attractively-valued companies with positive momentum and stable businesses.
In addition, the team considers companies that appear cheap based on valuation multiples such as book value and earnings.
When assessing positive momentum, the team looks for companies with superior medium-term performance.
Also, the research team focuses on companies that demonstrate excellent profitability and consistent earnings.
When selecting securities for the portfolio, the team may employ tax management strategies which consider the potential impact of federal income tax on shareholders’ investment return.
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 or use financial futures contracts and other types of equity-linked derivative instruments such as equity swaps and equity index swaps, as well as exchange-traded funds.
A portion of the fund’s assets may be held in cash or cash-equivalent investments including, but not limited to, short-term investment funds.
Additionally, the fund may lend its portfolio securities to certain types of eligible borrowers.