QSML

QSML targets profitability and high-conviction allocations by employing a fundamentally driven strategy in constructing a broad quality growth portfolio of 300 to 500 US small-cap companies. The fund defines small-caps as firms that are within the bottom 40% of the remaining companies from the initial universe after excluding the 500 largest firms by market-cap. Eligible securities are ranked according to a composite score calculated based on two equally weighted factors: growth and quality. The growth factor is determined based on a company's earnings growth forecast, and trailing three-year sales and earnings growth, while quality factor reflects each firm's three-year average return on equity and return on assets. The top 30% companies based on the composite score are selected and weighted based on market-cap, with individual security weights capped at 5%. The fund excludes firms involved in real estate, utilities, and banking. The index reconstitutes and rebalances semi-annually.