Portfolio Guidelines

  • Typically 50–70 positions
  • Maximum position size is 7%
  • Top 10 holdings are typically greater than 25% of net assets
  • Maximum industry exposure is 20%
  • Maximum sector exposure is 30%

Market Capitalization

The Fund typically invests at least 80% of its net assets in small and medium capitalization companies, defined as those companies with a market capitalization between $500 million and $10 billion (or, if greater, the maximum market capitalization of companies generally within the capitalization range of the Russell 2500 Index) at the time of purchase.

Top Ten Equity Holdings
As Of December 31, 2019

BorgWarner, Inc.
Cons. Discretionary
Willis Towers Watson PLC
Kirby Corp.
Post Holdings, Inc.
Consumer Staples
Red Rock Resorts, Inc. (Cl A)
Cons. Discretionary
Hub Group, Inc. (Cl A)
Liberty Media Corp. Series C Liberty Formula One
Communication Services
UGI Corp.
Real Estate
BankUnited, Inc.
Total As % Of Net Assets 26.9%

Sector Allocation1
As Of December 31, 2019

Small-Mid Cap Fund Russell 2500 Index
Financials 24.2% 16.1%
Industrials 19.7 15.0
Cons. Discretionary 12.1 11.3
Real Estate 8.1 10.2
Consumer Staples 7.1 2.9
Materials 5.9 5.1
Info. Technology 4.1 16.1
Utilities 3.6 3.6
Energy 3.3 2.7
Communication Services 2.4 3.1
Health Care 2.2 13.9
Cash & Other 7.2 0.0

There are specialized risks associated with small capitalization issues, such as market illiquidity and greater market volatility, than large capitalization issues.

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.

The Russell 2500 Index is an unmanaged market capitalization-weighted index comprised of the smallest 2,500 companies by market capitalization in the Russell 3000 Index, which is comprised of the 3,000 largest U.S. companies by total market capitalization. The Russell 2500 Value Index is an unmanaged market capitalization-weighted index measuring the performance of the small and midcap value segment of the U.S. equity universe including those Russell 2500 Index companies with lower expected growth values. These indices do not incur fees and expenses (which would lower the return) and are not available for direct investment.

As of 12/31/19, there were 5 gold rated, 8 silver rated, 7 bronze rated, 16 neutral rated, 102 not rated, and 1 under review funds in the U.S. Mid-Cap Value category. Morningstar Analyst ratings relative to the Morningstar Category are based on the cheapest share class for each fund as defined by Morningstar. The cheapest share class does not necessarily equate to the highest rated share class.

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 377 mid-cap value funds as of 12/31/19. The Fund’s Class I rating was 3 stars among 377, 4 stars among 342, and 4 stars among 233 mid-cap value funds for the 3-, 5-, and 10-year periods ended 12/31/19, 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.

© 2020 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.

2 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.

3 The Russell 2500 Index is the core index. The Russell 2500 Value Index is the value index.

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