RKSG targets companies with accelerating revenue and earnings growth, focusing on firms that can sustain above-market expansion rates. The fund aims to capture the outperformance potential of growth stocks while maintaining some quality filters to avoid speculative names.
How It Works
The fund screens for companies with revenue growth exceeding 15% annually and earnings growth above 20%, then weights holdings based on a composite score of growth consistency, momentum, and profitability metrics. Rebalances quarterly to capture emerging growth stories while cutting positions that show decelerating fundamentals. Unlike pure momentum strategies, RKSG requires positive free cash flow, filtering out unprofitable hypergrowth names.
Key Features
- Requires both revenue and earnings growth, avoiding revenue-only growth traps
- Quarterly rebalancing captures growth inflections faster than annual resets
- Free cash flow requirement screens out speculative growth stories
Risks
- Growth stocks can lose 40-60% in market corrections as valuations compress
- Quarterly turnover could exceed 50% annually, creating tax drag in taxable accounts
- Zero expense ratio suggests securities lending or new fund promotion—sustainability unclear
Who Should Own This
Best suited for aggressive investors with 5+ year horizons who want growth exposure but appreciate some quality guardrails. Works as a 10-20% satellite position alongside value or dividend strategies for balance. The zero expense ratio makes it attractive for cost-conscious growth investors willing to accept an unproven track record.