Investment Objective
The investment objective of the fund is capital appreciation. The fund seeks to achieve its investment objective by investing in smaller companies traded in the US markets. The fund takes long and/or short positions in an efficient combination of economic sectors and individual securities.
Investment Strategy
To achieve its investment objective, the Fund, a non-diversified portfolio, invests primarily in U.S. small and midcaps. The fund invests in both long and short positions and remains within these positions as long as targeted values are reached.
The fund's analysts proceed to allocate and select securities using a two-pass test:
First, the Fund continuously identifies sectors with promising reward-to-risk, by defining an optimal allocation mix based on expected changes in economic conditions. This weight optimization process across economic sectors is determined by an efficient frontier. Each sector weight has the constraints of, at most 50% for a long position and at most a 10% allocation for short positions.
Second, the Fund selects securities from each economic sector, based on their value and growth potential. For the second part of the test, using fundamental analysis, securities are selected based on the potential for significant capital appreciation or depreciation in comparison to other companies in that particular company’s sector. In addition, the fund may adopt an event driven strategy to capture gains with news that demonstrate change in the ongoing direction of US markets and companies.
Investment Process
A systematic rebalancing takes place at the end of every semester following the two-pass test aforementioned. However, analysts may decide at any time to (1) sell a long position or sell to cover a short position as new target prices are re-evaluated, and (2) change the sector allocation if a dramatic shift in economic/financial or political paradigm occurs. All trading will be handled and executed by the faculty advisor based on the recommendations of the fund's officers.
For cash management purposes, the fund may hedge risk with an allocation of its net assets to cash. Under normal market conditions, the fund will allocate a majority of its net assets to equity securities. When market conditions are unfavorable for profitable investing, the fund may increase the cash position throughout the holding period. When market conditions are favorable for profitable investing, the fund may increase its margin position throughout the holding period.
The investment objective of the fund is capital appreciation. The fund seeks to achieve its investment objective by investing in smaller companies traded in the US markets. The fund takes long and/or short positions in an efficient combination of economic sectors and individual securities.
Investment Strategy
To achieve its investment objective, the Fund, a non-diversified portfolio, invests primarily in U.S. small and midcaps. The fund invests in both long and short positions and remains within these positions as long as targeted values are reached.
The fund's analysts proceed to allocate and select securities using a two-pass test:
First, the Fund continuously identifies sectors with promising reward-to-risk, by defining an optimal allocation mix based on expected changes in economic conditions. This weight optimization process across economic sectors is determined by an efficient frontier. Each sector weight has the constraints of, at most 50% for a long position and at most a 10% allocation for short positions.
Second, the Fund selects securities from each economic sector, based on their value and growth potential. For the second part of the test, using fundamental analysis, securities are selected based on the potential for significant capital appreciation or depreciation in comparison to other companies in that particular company’s sector. In addition, the fund may adopt an event driven strategy to capture gains with news that demonstrate change in the ongoing direction of US markets and companies.
Investment Process
A systematic rebalancing takes place at the end of every semester following the two-pass test aforementioned. However, analysts may decide at any time to (1) sell a long position or sell to cover a short position as new target prices are re-evaluated, and (2) change the sector allocation if a dramatic shift in economic/financial or political paradigm occurs. All trading will be handled and executed by the faculty advisor based on the recommendations of the fund's officers.
For cash management purposes, the fund may hedge risk with an allocation of its net assets to cash. Under normal market conditions, the fund will allocate a majority of its net assets to equity securities. When market conditions are unfavorable for profitable investing, the fund may increase the cash position throughout the holding period. When market conditions are favorable for profitable investing, the fund may increase its margin position throughout the holding period.