MDT US Equity

At the root of our process is intensive risk management. We employ a variety of benchmark-relative investment constraints, including sector, industry and company limits. We also consider the correlation of our companies so that we can better understand other types of risks our portfolio may be exposed to. The goal is to optimize our outperformance but within a moderate amount of active risk.

Our investment process is fully transparent and behind our quantitative models is human oversight. Members of the team review each trade to ensure the decisions are reflecting accurate, up-to-date information. This process may involve:

• Reviewing after-hours earnings releases
• Checking for any analyst forecast updates
• Evaluating headlines on developing material items

Overall, while less than 1% of proposed trades are overruled, this important step helps reduce the chance of making any trades with incomplete data.

The MDT Team continuously evaluates every element of the investment process for potential enhancements. The effectiveness of each underlying factor may change over time, new factors may arise and others can become obsolete. The ability to rapidly leverage cutting-edge technologies and academic research to maintain its strategies’ alpha potential is an important piece of how the MDT Team seeks to deliver time-tested, repeatable performance across its strategies.

Regression trees provide a methodology to identify different types of companies and the combinations of factors we believe will lead to their outperformance.