Why choose this strategy?
- To pursue potentially strong risk-adjusted returns from small-cap value stocks.
- As a US small-cap value holding.
Investment strategy
- Vaughan Nelson seeks to take advantage of temporary information and marketplace inefficiencies in the small-cap universe to find opportunities to invest in companies at valuations materially below 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 Earnings Growth
- Future redeployment of capital is not reflected in current valuation.
Undervalued Assets
- Priced at a discount to asset value.
- Identifiable catalyst with ability to close valuation gap.
Undervalued Dividend Yield
- High, stable dividend.
- Minimal perceived downside risk.
