Tradewinds
Tradewinds uses an active, research-driven, fundamentals-based, value-oriented process. Tradewinds selects securities by
conducting rigorous, independent, bottom-up fundamental analysis seeking to identify potential investments that it believes trade at
attractive absolute valuations, offer good downside protection/risk-reward and possess strong franchise quality. Tradewinds’ stock
selection process, which is distinguished by deep specialization, fundamental analysis and transparency, identifies an initial
universe of companies with market capitalizations of greater than $1 billion. Those companies are closely monitored within their
respective industries and, based on various quantitative measures (such as price-to earnings, price-to-book value, price-to-sales,
price-to-net present value, price-to-free cash flow, sustainable dividend yield and price to liquidation/replacement value) and
qualitative analysis (such as understanding franchise quality, management strength, corporate strategy, barriers-to-entry, shareholder
value orientation, operating and industry fundamentals and competitive advantage), the universe of companies is reduced.
Following this process, Tradewinds selects securities for the Fund, further evaluating the Fund’s industry/sector exposure and
liquidity/ability to execute.
In accordance with the same principles that are utilized to evaluate the selection of securities, a security becomes a candidate for
sale when risk-reward characteristics change due to the following reasons:
• price appreciation reduces underlying statistical attractiveness;
• deterioration in company fundamentals; and
• a more attractive alternative stock is identified within the same industry that has stronger fundamentals or a more compelling
valuation (substitution swap).
Tradewinds does not employ mechanical sell triggers that dictate the sale of a security if its price falls by a certain percentage.
Tradewinds does, however, review every investment that suffers what it believes is a material decline in value. This review includes
evaluating its original investment premise, current valuation, fundamentals, determining if value is still being created, and
identifying the particular issues pressuring the holding and how long Tradewinds expects them to last. If the result of that review
suggests that the investment is still compelling, Tradewinds may not sell and it may increase the Fund’s position in the stock.

http://www.riversource.com/rvsc/glob...

I note that 6 of Tradewinds top 11 holdings are in Gold and/or metals. I am hoping that the "underlying statistical attractiveness" of KRY is based on the price of metals and/or buyout battle rather than a quick pop via permit...