Portfolio Guidelines

  • A long-biased fund with typically 30–50 long positions and 5–25 short positions
  • Flexible mandate allows for international equities up to 20% (effective May 1, 2018)

Exposure Guidelines

  • Maximum gross market exposure (long % + short %) = Up to 125%
  • Target net market exposure (long % – short %) = 60–100%

Top Five Long Equity Holdings
As Of March 31, 2019

Berkshire Hathaway, Inc. (Cl B)
Diversified Financial Services
Discover Financial Services
Consumer Financial Services
MetLife, Inc.
Bank OZK
Banks, Thrifts & Mortgage Finance
SVB Financial Group
Banks, Thrifts & Mortgage Finance

Top Five Short Equity Holdings
As Of March 31, 2019

Westamerica Bancorp
Banks, Thrifts & Mortgage Finance
Cincinnati Financial Corp.
Western Union Co.
IT Services
Commerce Bancshares, Inc.
Banks, Thrifts & Mortgage Finance
Selective Insurance Group, Inc.

Industry Allocation1
As Of March 31, 2019

Long Portfolio Russell 3000 Financials Index Short Portfolio
Banks, Thrifts & Mortgage Finance 38.7% 27.9% (6.1)%
Insurance 19.8 12.5 (3.3)
REITs & Real Estate Management 11.6 21.0 (4.0)
Capital Markets 10.2 12.2 0.0
IT Services 6.9 15.9 (1.8)
Diversified Financial Services 6.1 7.1 0.0
Consumer Financial Services 5.8 3.5 0.0
Cash & Other 0.9 0.0 0.0

Portfolio Breakdown
As Of March 31, 2019

Net Exposure
U.S. Stocks 77.5%
Non-U.S. Stocks 6.2

The Fund uses short selling which incurs significant additional risk. Theoretically, stocks sold short have the risk of unlimited losses. There are specialized risks associated with small capitalization issues, such as market illiquidity and greater market volatility, than large capitalization issues. Investing in non-U.S. securities may entail risk due to foreign economic and political developments; this risk may be higher when investing in emerging markets. Changes in currency exchange rates and differences in accounting and taxation policies outside the U.S. can raise or lower returns.

Fund holdings, industry 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.

The Overall Morningstar Rating™ is based on 97 financial funds as of 3/31/19. The Fund’s Class I rating was 2 stars among 97, 2 stars among 92, and 4 stars among 77 financial funds for the 3-, 5-, and 10-year periods ended 3/31/19, 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.

© 2019 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 3000 Financials Index.

Since inception risk statistics are calculated using monthly returns beginning on the first day of the Fund’s first full month of performance.
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