The fund seeks capital appreciation in the long term by investing in small-size companies outside 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 focuses on high-quality companies worldwide that have the potential to deliver superior returns at an acceptable risk level.
As part of the process, the team considers the anticipated economic growth rate, political outlook, current and forecasted inflation rates, currency outlook and interest rate environment within the applicable region.
Other factors in consideration would be characteristics such as above-average growth and superior potential for capital appreciation, significant growth in revenue through either an expanding market or market share.
The team also considers balance sheet strength, superior management; and differentiated or superior products and services or a steady stream of new products and services.
The research process is driven by fundamental analysis of one stock at a time. In selecting securities for the portfolio, the research team focuses on companies demonstrating durable growth characteristics and that are experiencing positive fundamental change.
Company-specific research includes industry and competitive analysis, revenue model analysis, profit analysis and balance sheet assessment.
The team looks to capitalize on stocks that are under-priced relative to their potential.
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 allocates its investments among securities of issuers located in at least eight different countries (which may include the U.S.) and estimates that the majority of its non-U.S. investments will normally be in Japan and Western Europe.
Additionally, the fund will normally invest no more than 25% of its net assets in issuers located in any one country outside the U.S., other than France, Germany, Japan and the United Kingdom.
Also, the fund may invest up to 30% of its net assets in emerging market securities (but no more than 10% in any one emerging market country).
In addition, the fund may invest in securities issued in initial public offerings and real estate investment trusts.