The fund seeks capital appreciation in the long term by investing in small-and mid-size companies outside 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 a significant portion of its net assets in foreign securities, including developing markets.
The team relies on fundamental analysis to focus on the market price of a company’s securities relative to its long-term earnings, asset value and cash flow potential.
The investment manager also considers a company’s valuation multiples such as earnings and cash flow as well as profit margins and liquidation value.
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.
However, from time to time, based on economic conditions, the fund may have significant positions in particular regions, countries or sectors.
Also, the fund may engage in currency-related derivatives, such as currency and cross-currency forwards and currency futures contracts, to seek to hedge (protect) against currency risk.