Scout Investments has launched the Scout Equity Opportunity Fund (SEOFX), a no-load, all-cap fund benchmarked to the Russell 3000 Index.
The fund seeks to provide long-term capital appreciation by investing in companies that represent a corporate capitalisation structure that enables maximum shareholder return through the optimal balance of debt and equity.
"We believe superior risk-adjusted relative performance can be achieved through long-term ownership of a diversified portfolio of levered stocks," says Brent Olson, lead portfolio manager for the fund. "Through the use of fixed income valuation metrics, we approach investing from a defined perspective that allows us to identify companies that we believe are undervalued and thus attractive for investors."
The fund invests in companies with stable or growing free cash flow, in the process of balance sheet improvement or growth, that demonstrate a meaningful desire to improve their leverage profile or move to an optimal debt level.
"We recognise debt metrics as a leading indicator for equity performance and use this as the basis for our disciplined investment process," Olson says. "Through analysis of trends in the broader fixed income markets, as well as debt metrics, such as cash flow, leverage and earnings, we identify companies that we believe provide opportunity for future growth and profitability."
"The Scout Equity Opportunity Fund is an exciting addition to our industry-leading investment product suite that strives to deliver relative outperformance over full market cycles," says Andy Iseman, chief executive officer of Scout Investments. "We are pleased to provide a distinct investment solution led by a tenured manager and supported by Scout's domestic equity research team."