Why choose this strategy?
- As a potential return enhancer for long-term equity investors.
- For investors searching for active management expertise.
- As a complement to a more passive equity indexed approach.
- For investors looking for a less style-box conscious offering with the potential to generate alpha.
Investment strategy
- Vaughan Nelson seeks to take advantage of temporary information and marketplace inefficiencies across the market capitalization range to find opportunities to invest in companies at valuations materially bellow their long-term intrinsic value.
- Managers follow a research-intensive process emphasizing balance sheets and cash flow-based projections.
- The team defines value in three ways and seeks to diversify across company types:
Undervalued Growth
- Earning positive return on capital
- Stable-to-improving returns
- Not paying for future growth
Undervalued Assets
- Priced at a discount to asset value
- Identifiable catalyst with ability to close valuation gap
Undervalued Dividend
- High, secure dividend
- Minimal perceived downside risk
