Most Frequently Asked Questions

How do you manage risk?

The Brazos Fund’s risk management discipline incorporates a number of techniques that the Fund's adviser has been using since 1983.

Three major components of the Brazos Fund’s risk management discipline are:

•  Diversification – generally, single industry exposure is limited to 25% and individual 

    stock positions are limited to 5%.

•  Research Quality – our “best in class” fundamental research behind each stock selection

    greatly mitigates the downside risk of any individual holding.

•  Specialized Tools – utilized in screening, these include a proprietary “Suspect List,” designed

    to identify problem stocks early on.

Market, sector, portfolio and company-specific risks are monitored daily throughout the investment process.  In addition to continuously assessing operating fundamentals, we incorporate diversification, valuation and technical factors to help constantly manage risk, both in terms of what is currently held in the funds as well as in the search for portfolio candidates.   In the smaller capitalization arena, the same inefficiency that provides much of the opportunity also provides much of the risk.   Avoiding large losses is among the critical components to attaining consistently attractive investment performance.   Each of the companies purchased for the funds continues to be researched and monitored for as long as it remains in the portfolio.

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