Smith Group employs quantitative and qualitative analysis that seeks to identify high quality companies that it believes have the ability to accelerate earnings growth and exceed investor expectations. Smith Group’s selection process consists of three steps. First, Smith Group reviews a series of screens utilizing Smith Group’s investment models, which are based on fundamental characteristics, designed to eliminate companies that Smith Group’s research shows have a high probability of underperformance. Factors considered when reviewing the screens include a multi-factor valuation framework, earnings quality, capital structure and financial quality. Next, securities that pass the initial screens are then evaluated to try to identify stocks with the highest probability of producing an earnings growth rate that exceeds investor expectations. This process incorporates changes in earnings expectations and earnings quality analysis. Finally, these steps produce a list of eligible companies which are subjected to analysis by Smith Group to further understand each company’s business prospects and earnings potential. Smith Group uses the results of this analysis to construct the Portfolio’s security positions.