Strategy. Under normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings made for investment purposes) in the equity securities, including common stocks and preferred stocks, of small-capitalization companies. Equity securities may take the form of stock in corporations, limited partnership interests, interests in limited liability companies, real estate investment trusts (REITs) or other trusts and other similar securities representing direct or indirect ownership interests in business organizations. Currently, the Fund defines a small-capitalization company to be one whose market capitalization, at the time of purchase, either falls within the capitalization range of the Russell 2000 Value Index or is $3.5 billion or less. While the market capitalization range for the Russell 2000 Value Index … Show more… Under normal circumstances, the Fund will invest at least 80% of its net assets (plus any borrowings made for investment purposes) in the equity securities, including common stocks and preferred stocks, of small-capitalization companies. Equity securities may take the form of stock in corporations, limited partnership interests, interests in limited liability companies, real estate investment trusts (REITs) or other trusts and other similar securities representing direct or indirect ownership interests in business organizations. Currently, the Fund defines a small-capitalization company to be one whose market capitalization, at the time of purchase, either falls within the capitalization range of the Russell 2000 Value Index or is $3.5 billion or less. While the market capitalization range for the Russell 2000 Value Index fluctuates, at December 31, 2024, it was $8.22 million to $13.1 billion. The Fund may, however, invest in companies with large-capitalizations. Vaughan Nelson Investment Management, L.P. (Vaughan Nelson) invests in small-capitalization companies with a focus on those companies meeting Vaughan Nelsons return expectations. Vaughan Nelson uses a bottom-up value oriented investment process in constructing the Funds portfolio. Vaughan Nelson seeks companies with the following characteristics, although not all of the companies selected will have these attributes: Companies earning a positive return on capital with stable-to-improving returns. Companies valued at a discount to their asset value. Companies with an attractive and sustainable dividend level. In selecting investments for the Fund, Vaughan Nelson generally employs the following strategies: Value-driven investment philosophy that selects stocks selling at a relatively low value based on discounted cash flow models. Vaughan Nelson selects companies that it believes are out of favor or misunderstood. Vaughan Nelson starts with an investment universe of 5,000 securities. Vaughan Nelson then uses value-driven screens to create a research universe of companies with market capitalizations of at least $100 million. Vaughan Nelson uses fundamental analysis to construct a portfolio of 60 to 80 securities that, in the opinion of Vaughan Nelson, is made up of quality companies with the potential to provide significant increases in share price over a three year period. Vaughan Nelson will generally sell a security when it reaches Vaughan Nelsons price target or when the issuer shows a change in financial condition, competitive pressures, poor management decisions or internal or external forces reducing future expected returns from those expected at the time of investment. The Fund may also: Invest in convertible preferred stock and convertible debt securities. Invest in foreign securities, including emerging market securities. Invest in REITs. Invest in securities offered in initial public offerings (IPOs). Show less