In the small cap strategy, the first step in our process is our sector factors, a set of qualitative judgments that set us apart by focusing our attention on more productive industries while biasing us against the more accident-prone or difficult-to-manage companies. There are specific factors for each of the five major sectors: in consumer we avoid fashion risk and look for brand loyalty, with a preference for staples; in financials we avoid spread businesses and focus on niche opportunities; in health care we seek to minimize our exposure to government reimbursement risk and invest in technologies that improve outcomes; in industrials we look for innovators and/or problem solvers and avoid capital-intensive business; and in technology we avoid rapid product obsolescence, which leads us to the software industry and away from hardware. Companies that clear the sector factors then go through a fundamental analysis of company attributes. If a security passes this evaluation, the final phase of the process is the valuation analysis. Only once a security has gone through these phases will the idea be formally presented for discussion around potential inclusion in the portfolio. If the team decides the security is going to be added to the portfolio, they will also discuss an entry strategy and the position size.