Investment Approach

• Our integrated approach to investing combines fundamental analysis and quantitative models to help shape our process for security selection, portfolio construction, and risk management in a systematic manner.
• The strategy invests primarily in equity investments of large US companies with lower volatility characteristics relative to the broader market.
• The portfolio is generally constructed by buying higher ranked stocks and selecting stocks to sell from those that have a lower rank, subject to overall risk controls and desired portfolio characteristics.
• While stock selection is based on a quantitative model, we explicitly incorporate analyst ratings into our model and portfolio construction process, resulting in the core of our portfolio being comprised of stocks that are ranked utilizing our stock selection model.
• Quantitative models are monitored and security selection results are reviewed for qualitative factors, portfolio risk characteristics, sector weightings and macroeconomic factors in the process of portfolio construction.
• Employs risk models provided by T. Rowe Price’s enterprise risk group and uses analytics developed by the quantitative equity team to monitor portfolio risk.
• Relying on quantitative models entails the risk that the models themselves may be limited or incorrect, that the data that the models rely on may be incorrect or incomplete, and that the adviser may not be successful in selecting companies for investment or determining the weighting of particular stocks.