Quality 250 Investment Process

Holdings are weighted based on financial fundamentals. Fundamental weighting utilizes factors that are dependent only on a company’s financial performance, not its stock price, to determine the appropriate allocation of that stock to the portfolio. This enables the acquisition of securities independent of market factors, as well as disciplined trading. For the Quality 250 the fundamental that we focus on is dividends, and weighting is based on each company’s overall dividend contribution to the portfolio.

Our rebalancing process dictates the dollar amount of the portfolio to be invested in any given stock, enabling us to buy and sell securities in an efficient and disciplined fashion. When shares are highly valued, we will buy fewer shares because the total dollar amount we invest in those shares is dictated by fundamental weighting. Conversely, when shares are fairly valued or undervalued, we will buy more shares. This leads to additional upside opportunity over time as we are able to use the ebbs and flows of the stock market to manage our average cost of each security in the portfolio.