Principle Investments


The Fund will seek to achieve its’ objective by investing primarily in a diversified portfolio of long and short opportunities within the United States equity markets.

The Fund’s long strategy will seek to capitalize on both income and growth-oriented investments in companies with improving fundamentals. The Fund’s income driven investments may be characterized by companies that can demonstrate a history of consistent dividends and/or dividend growth through market cycles. The Fund’s growth driven investments will seek to find capital appreciation with companies that can deliver growth at a reasonable price.

The Fund’s short strategy will seek to capitalize on companies with deteriorating fundamentals. The Fund’s short investments may be characterized by companies with overleveraged balance sheets or an inability to grow into their capital structure. Other fundamental factors may include a loss in market share, eroding margins, sales and/or difficult industry conditions.

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At DJC, we seek to exploit both long and short opportunities through a diversified portfolio of equity securities and sectors primarily in the United States.

We are market capitalization agnostic, that said, we generally invest in large capitalization, dividend-paying securities.

As a core part of our long strategy, we will seek investments characterized by strong free cash flow, Pristine balance sheets, sustainable/defendable Moats and a history of shareholder-friendly actions, including dividend increases and share repurchases.

Our core short strategy tends to exploit investments with highly leveraged balance sheets, are poor users of capital, have either negative or low levels of free cash flow and weakening market share positions.

We believe in an active management approach and opportunistically trade our investments.

The Fund will primarily invest in a diversified portfolio of equity securities and across a broad range of industry sectors that are primarily located in the United States. Our investments may include common and preferred stock, convertibles, ETF’s, options, corporate bonds including investment grade and high yield securities, treasuries and other types of financial instruments.

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At DJC, we have a value-driven orientation, our investment approach includes both bottom-up and top-down fundamental analysis to capture idea generation and security selection.

The Management Company intends to choose investments for the Fund that it believes will increase in value over time, (decrease in value over time in the case of a short position), and provide current income, generally through dividend-paying securities. The Management Company, when considering possible portfolio investments, will review various sources of information including but not limited to the company’s public filings; 10Q’s, 10K’s and annual reports. Additional financial data can be found through company websites, company presentations, industry conferences and published research reports in order generate investment ideas.

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Consistent with our fundamental research approach, the Management Company will conduct a thorough analysis of the company and industry when determining allocating capital either long or short. A short investment prospect may include some of the following characteristics:

  • Declining industry fundamentals
  • Negative free cash flow
  • Key management turnover
  • Overleveraged balance sheet
  • Restrictive regulatory changes
  • Poor business fundamentals
  • Eroding operating margins
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The Fund’s drivers for portfolio construction will be predicated upon a fundamental bottom-up approach including but not limited to the Management Company sector view and relative security valuation. The Fund will be diversified between security and sectors with the core position sizes generally ranging between 1% and 5% of total assets. Exposure to any one sector is not expected to be greater than 25% of the Fund’s total assets. The leverage of the portfolio is expected to be between 1-3 times.

The Fund has no stated minimum holding period for investments and will buy or sell securities whenever the Management Company sees an appropriate opportunity. For example, the Fund may sell shares of a company when the company’s prospects for capital appreciation deteriorate or when its dividend rate becomes unattractive or when the Fund identifies another company with more attractive prospects.

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The Management Company will consistently monitor the portfolio security positions for changes in underlying fundamentals and adjust as necessary in conjunction with the overall portfolio.

The Management company expects to implement hedging strategies against single name positions as well as sectors. For example, the fund could be long and short within the same sector, (pair trade), to reduce sector volatility.

The Management Company expects to hedge the overall portfolio from time to time against the prevailing market. For example, the Fund could hedge the portfolio based upon macro factors such as geopolitical risk, changes to the economic climate, changes to Federal Reserve Policies and market valuation.