FBR Funds Process

Our disciplined core equity investment process, regardless of market capitalization, is consistent, and systematically applied over time.

We efficiently identify candidates for each portfolio that exhibit a specific set of characteristics through a proprietary combination of quantitative screens, qualitative review, and bottom-up fundamental research. The initial screens focus on profitability (returns on owner’s capital, growth of book value, operating margins) and relative valuation measures (price compared to book value, earnings, and cash flow). Approximately 10 to 15% of companies pass our stringent criteria at any given time.

Once identified, these securities are then subjected to intensive qualitative and fundamental research by the management team. Our portfolio managers assess each company’s business model, industry characteristics, products or services, market position, competitive advantages, and quality of management. We believe superior investment performance is generated through individual stock selection.

We monitor and review each security on a daily basis. Our sell discipline is designed to identify securities which no longer meet the criteria outlined in the buy discipline. Generally, a security position may be sold for the following reasons:

• A stock reaches excessive valuation levels relative to our understanding of intrinsic value and company fundamentals
• A company falls from our investable universe by failing to meet our initial screens
• We recognize deterioration in the long-term fundamentals
• Our investment process identifies a superior candidate with a more attractive risk/reward profile

The net result of our core equity process provides our clients with a diversified portfolio that emphasizes high-quality, conservatively financed companies purchased at low relative and absolute valuations.

All investing involves risk, including loss of principal and there can be no guarantee that any strategy or methodology will be successful.

This website does not constitute an offer to sell or a solicitation of an offer to buy shares of the FBR Funds to any person in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.

Investors should consider the investment objectives, risks, charges, and expenses carefully before investing.

The FBR Funds are distributed by FBR Investment Services, Inc. Member FINRA/SIPC.