The fund seeks to replicate total return performance of the benchmark index before fees and expenses by investing in small-and mid-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.
Next, the research team invests by sampling the index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the full index in terms of key characteristics.
These key characteristics include industry weightings and market capitalization, as well as valuation multiples such as earnings and dividend yield.
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 invests in about 3,000 stocks, which span many different industries.