The Fund
The Fund's ObjectiveThe ALPS | GNI Long-Short Fund seeks to achieve long-term capital appreciation with an added emphasis on the preservation of capital during unfavorable market conditions. |
The ALPS | GNI Capital Investment StrategyOur focused long-biased, long/short equity portfolio is selected from a broad universe of U.S.-traded stocks using a rigorous, research-driven process that begins with the development of a top-down, macro viewpoint and concludes with fundamentally driven, bottom-up stock selection. Through this approach, we aspire to uncover and allocate capital to the most favorable markets, sectors, and companies available. This opportunistic, go-anywhere strategy is focused on our best ideas and is unconstrained by style-box mandates or a requirement to be fully invested all the time. We strive to be both flexible and nimble in our style and sector selection, adjusting to dynamic capital markets. |
Top-Down and Bottom-Up Analysis | The ProcessOur investment process begins with a thorough, top-down analysis of the macro environment for equities. Is the backdrop desirable for investing in stocks? Unlike traditional long-only funds that are required to be fully invested regardless of market conditions, the investment process used in our long/short equity allows us to be nimble and take action based on market conditions. In favorable times, the portfolio managers can increase the portfolio's net exposure and they can lower it by adding shorts and reducing longs in a challenging environment for equities. The next step in our investment process is crucial: identifying the market's leading industry groups for long candidates and most vulnerable industry groups for short ideas. In fact, studies suggest that as much as 50% of a stock's movement can be attributed to fluctuations in its industry group and sector. Complicating matters further, different parts of a market cycle tend to favor certain industries, and each market cycle is somewhat unique. GNI uses a quantitative system to objectively identify industry groups to focus on. GNI's individual security selection is the result of a rigorous evaluation of company's fundamentals and various valuation measures. The most critical factor in our fundamental work boils down to one word: change. We attempt to identify future catalysts, or key value drivers, that could lead to a systemic change in a company's business or in its valuation. Change can come in many varieties, including company-specific catalysts like new product launches, new management teams, or geographic expansion. These company-specific factors often create the most opportunity to develop an edge through our independent, nonconsensus analysis. |