EQLS neutralizes equity exposure through long and short positions using total return swaps. Companies in the fund's swap basket are selected using a machine learning-powered quantitative ranking system. The system considers over 500 fundamental factors based on forward-looking return expectations. The fund typically includes 100 stocks with the best expected returns in the long basket and 100 stocks with the lowest expected returns in the short basket. The swaps provide the fund with approximately 200% equity exposure on both its long and short baskets. The 200% long and short positions are not direct hedges, and the adviser constructs the portfolio such that the fund will achieve a market-neutral result. The actively managed fund typically rebalances monthly based on the ranking system, although the adviser has the discretion to rebalance more frequently. The adviser may also tactically shift the fund's net long/short equity exposure.
