The portfolio is constructed by using a combination of quantitative models and systematic processes.
STEP 1: RiverFront utilizes a scoring system to identify those stocks with the most attractive value and quality characteristics, in our view. RiverFront considers multiple factors within each category such as free cash flow to price when determining value and debt to equity when determining quality. RiverFront then assigns each qualifying security a score based on these characteristics.
STEP 2: Nasdaq Dorsey Wright & Associates ("DWA") uses price momentum-based measurements from their point and figure charting methodology. DWA believes that point and figure analysis is more effective at identifying meaningful price movements in stocks than more traditional charting methods. DWA’s ranking system rewards for sustained outperformance versus the broad market with reasonable volatility.
These two disciplines are blended together for an actively managed solution that we believe can add value over a passive index and provides a compliment to RiverFront’s broader global Advantage balanced solutions.