The fund normally invests at least 80% of its net assets (including any borrowings for investment purposes) in assets issued by small- or mid-cap companies. The fund defines small- and mid-cap securities as those whose market capitalization, at the time of purchase, falls within the market capitalization range of the MSCI USA SMID Cap® Index or another unaffiliated index. The fund invests primarily in U.S. equity securities. The fund may select

stocks with either growth or value characteristics, subject to overall risk controls and desired portfolio characteristics.

The portfolio is typically constructed in a “bottom up” manner, an approach that focuses more on evaluations of individual stocks than on analysis of overall economic trends and market cycles. The fund’s adviser analyzes various metrics, such as returns on equity, capital expenditure, projected growth rates, and price-to-earnings, price-to-cash flows, and price-to-book ratios. Stocks are also evaluated on relative valuation, profitability, stability, earnings quality, management capital allocation actions, and indicators of near-term appreciation potential when compared with other stocks within the relevant investing universe.

Sector allocations are largely the result of the fund’s focus on stock selection. At times, the fund may have a significant portion of its assets invested in the same economic sector.