Risk in the portfolio is managed through the portfolio allocation process. Allocations at inception are either 2% or 4% depending upon the level of discount from intrinsic value and the composition of the portfolio. Generally, a single security position is not permitted to exceed 8% of the portfolio. Sector weightings are a result of the bottom-up approach. While allocation restrictions are not placed on sectors, the portfolio is limited to no more than 25% in any single industry.

The factors that can spur a sale are:

1. Stock materially exceeds RCB estimate of intrinsic value
2. Management disappointment, change in company fundamentals or change in the course of business
3. Superior risk/reward candidate identified

A material drop in the price of the stock compared to its peer group will prompt a full review of the company by a second analyst in order to determine if a sale is in order or whether an opportunity to add to a position is at hand.