Marcellus MeritorQ PMS

Fund Snapshot

Unique Feature

Diversification

• Exposure to a variety of unrelated factors, such as value and quality
• The capture of performance from smaller businesses. Zero market cap bias

Periodic Rebalancing

• Rules-compliant semi-annual portfolio rebalancing and review
• Assures portfolio is in line with investment goals
• Keeping portfolio churn in check while routinely buying undervalued stocks

Rules-based

• Method and portfolio construction have been tested over the past 16 years.
• Process of investment over discretion
• Risk-free star portfolio manager

Active monitoring is done to make sure the final portfolio and rules are in line with the investment goals:

• Additionally, they offer an STP (Systematic Transfer Plan) plan that allows customers to space out their investments over a 5-month period.
• Existing Investors can use the Systematic Investment Plan to save and invest in Marcellus Funds regularly.

Several Enduring Guidelines For Successful Investing

Buy Good Companies

• High return on capital
• Solid financial condition
• Clean accounts

At Prices Below Intrinsic Value

• In comparison to the rest of the market, a discount to intrinsic value
• Free cash flow-based intrinsic value

Mitigate Human Biases

• Stay away from behavioral biases
• Process preceding judgment

Investing Principles

• Long only portfolio
• No use of leverage
• No use derivatives
• The exclusive forensics framework from Marcellus

Marcellus MeritorQ Approach

• Construction of a portfolio according to rules based on business fundamentals
• Choose reputable businesses that are undervalued compared to the rest of the market.
• Focus on your portfolio, which provides better risk-adjusted returns, rather than just one or two stocks.
• Refresh portfolio every two years, adding undervalued companies.

Using a rules-based strategy in conjunction with Marcellus’ forensic framework

Universe

Companies in Large, mid, and small-cap segment

Screening

Using Marcellus’ forensic accounting approach, identify accounting red flags

• Low financial leverage
• Consistent profitability

Selection

Choose the top stocks based on composite rank.

• Profitability
• Value

Position Sizing

• Basis value metric
• Semi-annually rebalanced