The fund seeks capital appreciation in the long term by investing in companies across any size in the United States.
The sub-advisor’s investment process is designed to highlight companies in the benchmark index that are trading at a discount to their estimated intrinsic value.
Next, the research team evaluates a company’s intrinsic value on the basis of valuation multiples such as cash flow and sales and free cash flow yield.
In addition, the team focuses on companies with significant operations, a high return on invested assets, products or services that have a lesser chance of becoming obsolete with significant barriers to entry, and capable management teams.
Then the manager constructs a concentrated portfolio of 20 to 35 stocks from a list of companies favored by the research team and allocates capital based on its conviction level.
The manager may also invest cash balances in other investment companies, including money market funds.
The fund has the flexibility to earn additional income by lending its securities to broker-dealers and institutions on a short-term or long-term basis.
The fund is non-diversified which means that it may invest a larger percentage of its assets in a smaller number of issuers than a diversified fund.