Portfolio Guidelines

    • A long-biased fund with typically 40–60 long positions and 20–40 short positions

Exposure Guidelines

  • Maximum gross market exposure (long % + short %) = Up to 140%
  • Target net market exposure (long % - short %) = 40-75%

Top Five Long Equity Holdings
As Of June 30, 2017

Citigroup, Inc.
Financials
4.0%
Abbott Laboratories
Health Care
3.9
Alphabet, Inc. (Cl A)
Info. Technology
3.2
MetLife, Inc.
Financials
2.9
United Continental Holdings, Inc.
Industrials
2.6

Top Five Short Equity Holdings
As Of June 30, 2017

Best Buy Co., Inc.
Cons. Discretionary
(2.6)%
Boeing Co.
Industrials
(2.3)
Arista Networks, Inc.
Info. Technology
(1.8)
Cincinnati Financial Corp.
Financials
(1.7)
McDonald's Corp.
Cons. Discretionary
(1.5)

Sector Allocation1
As Of June 30, 2017

Long Portfolio Russell 1000 Index Short Portfolio
Financials 25.3% 14.7% (4.4)%
Cons. Discretionary 17.5 13.1 (9.2)
Info. Technology 13.2 21.8 (4.0)
Industrials 9.8 10.5 (3.5)
Health Care 8.5 13.9 (2.7)
Consumer Staples 4.2 8.0 (1.6)
Energy 1.9 5.8 (0.8)
Materials 1.7 3.3 0.0
Utilities 0.0 3.1 (1.5)
Telecom 0.0 2.1 (0.5)
Real Estate 0.0 3.8 0.0
Cash & Other 18.0 0.0 0.0

The Fund uses short selling which incurs significant additional risk. Theoretically, stocks sold short have the risk of unlimited losses.

Fund holdings, sector allocations, and portfolio statistics subject to change without notice.

1 Cash & Other may include cash, treasuries, money market funds, and short duration fixed income funds.

As of 6/30/17, there were 0 gold rated, 1 silver rated, 3 bronze rated, 8 neutral rated and 128 not rated funds in the U.S. Long-Short Equity category.

The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five pillar evaluation to determine how they believe funds are likely to perform relative to a benchmark, or in the case of exchange-traded funds and index mutual funds, a relevant peer group, over the long term on a risk-adjusted basis. They consider quantitative and qualitative factors in their research, and the weight of each pillar may vary. 

The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. A Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s conviction in a fund’s prospects for outperformance. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months. For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to global.morningstar.com/managerdisclosures/.

The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause Analyst expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund.

The Overall Morningstar Rating™ is based on 175 long-short equity funds as of 6/30/17. The Fund’s Class I rating was 4 stars among 175, 4 stars among 90, and 4 stars among 26 long-short equity funds for the 3-, 5-, and 10-year periods ended 6/30/17, respectively.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The Morningstar Broad Fee Level data point compares the fund's net expense ratio to the net expense ratio of all the other funds within its Morningstar Category.

© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

3 Definitions: Active Share measures the difference between portfolio holdings and the benchmark. The higher the active share, the greater the difference. Standard Deviation measures the volatility of the Fund’s returns. Beta measures the Fund’s sensitivity to market movements. Sharpe Ratio uses the Fund’s standard deviation and average excess return over the risk-free ratio to determine reward per unit of risk. Alpha measures excess return relative to the market that is attributable to active portfolio management. R-squared represents the percentage of the portfolio’s movements that can be explained by general market movements. Upside / Downside Capture Ratio measures a manager’s ability to generate excess return above the benchmark return in up markets and retain more of the excess return in down markets. Statistics for periods less than one year are not annualized. Risk statistics are relative to the Russell 1000 Index.

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