The fund seeks capital appreciation in the long term and current income by investing in large-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 invests a significant portion of its net assets in non-U.S. stocks.
In addition, the team prefers attractively valued companies with the potential for improving earnings over time.
The team favors companies that are estimated to trade below their fair values and lagging in market price for temporary reasons but having good prospects for capital appreciation or dividend growth.
In addition, the team looks for companies that have low valuation on various earnings, book value, sales, and cash flow metrics, in absolute terms and/or relative to the company’s peers or its own historical norm.
Also, the team prefers companies having low valuation relative to its growth potential.
The team favors companies that may benefit from restructuring activity or other turnaround opportunities.
Other factors that the team focuses on are companies with a sound balance sheet and above-average dividend yield and/or the potential to grow dividends.
The research process is driven by fundamental analysis of one stock at a time. However, country allocation is driven largely by stock selection.
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.
Country and sector allocations are driven primarily by security selection and secondarily by an assessment of top-down, fundamental prospects.
The fund seeks to diversify among the world’s developed countries, but invests modestly in emerging markets.
However, the fund focuses on more mature developing countries.