Concourse Capital Focused Equity ETF employs a value strategy and seeks to build and maintain a concentrated portfolio of companies it believes exhibit a large discrepancy between their intrinsic value and the price of their shares. Concourse primarily invests in mid-cap companies trading in the US, where it finds the market to be relatively less efficient over time, compared to larger cap companies. The Sub-Adviser begins with extensive screening of its primary investment universe (all equity securities of companies located in the US and Canada) looking for companies it believes have the characteristics to grow the intrinsic value of their shares at a mid-teens compound rate for a period of years. In many cases these companies are going through a transitional period such as a management change, merger or acquisition, deleveraging, post-bankruptcy reorg or operational turn-around. We find these situations can frequently result in investor distrust and favorable price/value discrepancies. Other types of situations that attract us are companies that are pursuing a levered equity shrink strategy or platform companies that have shown proficiency in targeted M&A. Through this process we attempt to find companies that are being mispriced due to a misunderstanding or overreaction to one or more temporary issues.

The Sub-Adviser then does deeper due diligence on the companies that meet the initial criteria, including longer term financial models and identification and due diligence of the key issues driving the stock recovery thesis. Ongoing management of the portfolio is done using a multifactor position ranking process. Each week all the positions in the portfolio are ranked against each other and any new ideas that the Sub-Adviser has completed due diligence on. As positions rise in the rankings they are made larger positions in the portfolio. As they fall in the rankings their size is reduced until they are ultimately replaced by other positions. The Sub-Adviser’s goal is to build and maintain a portfolio of 20-30 companies that meet its investment criteria while also representing a sufficient diversity of sectors and thesis drivers.