Financial Trust’s Smart Beta Strategies invest in the highest rated stocks within each of the 11 economic sectors of the associated universe/benchmark. Stocks within each sector are ranked according to Financial Trust Asset Management’s proprietary ranking system which ranks the companies in three broad areas. The Earnings Momentum ranking compares each company’s revenue growth and net income growth in each of the last 3 years. The Profitability and Quality ranking compares profitability and quality factors such as return on equity, return on assets, profit margin, and financial leverage. The ValueMomentum Leaders™ ranking compares valuation and momentum factors. The scores are then combined to come up with an overall ranking. Each portfolio is invested in the top 20% of stocks in each sector. Sector weights are kept equal to the benchmark. However, within each sector, positions are equally weighted. The portfolio is rebalanced and reallocated on a quarterly basis.
Each strategy and its associated benchmark for comparison purposes are listed below. Note: For these strategies, the stocks in the benchmark also comprise the strategy’s investment universe.
| Strategy | Universe/Benchmark* | Market Capitalization | Target Number of Holdings |
|---|---|---|---|
|
American Disciplined Equity™ |
S&P 500 Index |
Large Cap |
100 |
|
American Disciplined Mid Cap |
S&P Midcap 400 Index |
Mid Cap |
80 |
|
American Disciplined Small Cap |
S&P Small Cap 600 Index |
Small Cap |
120 |
Summary
|
Asset Class |
U.S. Equity |
|
Investment Objective |
Long-term growth of capital |
|
Passive/Active |
Semi-active |
|
Long Only/Tactical |
Long-only |
|
Factors |
Value, Momentum, Quality, Growth |
*Please see benchmark descriptions.