U.S. Value Equity Strategy

Investment Approach

The U.S. Value Equity Strategy invests in U.S. companies that demonstrate compelling growth potential, but have been ignored or discarded by the general marketplace. Employing bottom-up research, the Strategy's management team is neither distracted by prevailing market sentiment nor other emotional indicators. Research is used to identify companies with catalysts including hidden assets, successful restructuring potential, the ability to initiate or increase a dividend, or temporary undervaluation due to sector underperformance.

Key Considerations

• The Strategy's flexible market cap structure allows it to participate in a broad variety of opportunities in the U.S. while keeping a strict focus on identifying companies that trade below their intrinsic value.
• The Strategy's disciplined, bottom-up research process focuses on companies that exhibit low price-to-earnings, low price-to-free-cash flow, and an attractive dividend policy.
• Cash may be used defensively in an effort to manage portfolio risk exposure.

Important Information

This strategy invests in equity securities and is subject to the risk that equity security prices will fall over short or extended periods of time. Historically, the equity markets have moved in cycles, and the value of the strategy's equity securities may fluctuate drastically from day-to-day. Individual companies may report poor results or be negatively affected by industry and/or economic trends and developments. The prices of securities issued by such companies may suffer a decline in response. These factors contribute to price volatility, which is the principal risk of investing in an equity-based strategy. You could lose all or some of your investment.

The smaller capitalization companies in which the strategy invests may be more vulnerable to adverse business or economic events than larger, more established companies. In particular, these small companies may have limited product lines, markets and financial resources, and may depend upon a relatively small management group. Small cap stocks may be very volatile and the price movements of the portfolio's shares may reflect that volatility. It may be more difficult to sell a large quantity of shares of one small cap issuer.

Value stocks tend to be inexpensive based on various measures of their intrinsic value. These stocks are inexpensive because they are out of investor favor for one or more reasons. The goal is to identify value stocks that will increase in price and ultimately reflect their intrinsic value over time. Risks that may prevent value stocks from appreciating include: the portfolio manager's inability to correctly estimate a stock's intrinsic value, the market's inability to realize the stock's intrinsic value over time, or a poorly performing business causes the intrinsic value of the stock to decline.