Smaller Companies Fund
Litman Gregory Masters Smaller Companies Fund MSSFX
Overview
Litman Gregory Masters Smaller Companies Fund seeks superior long-term performance relative to its peer group of small cap core funds and its small cap benchmarks. Like the other Litman Gregory Masters Funds, each of the three managers separately runs a portion of the fund's assets by independently managing a portfolio comprised of between 8 and 15 of their highest-conviction stocks. The fund will invest primarily in the securities of small and mid-sized U.S. companies. The Advisor defines a "Smaller Company" as one whose market-capitalization falls within the range of market capitalizations of any company in the Russell 2500 Index. The Russell 2500 Index measures the performance of 2500 small and mid-sized companies. Overall, the Advisor expects the majority of the fund's holdings at any point to be in the smaller half of this market capitalization range, but the fund will have the flexibility to hold mid-sized companies if the investment managers believe that holding these companies will lead to higher overall returns. Though the overall fund may hold more or fewer securities at any point in time, it is expected that the fund will hold between 24 and 45 securities.
This fund is appropriate for investors who:
- Want a core small cap equity investment
- Seek strong market-cycle performance relative to the small-cap asset class, but are less concerned about short-term returns
- Understand the short-term risks associated with the stock market
Cove Street Capital
Jeffrey
Bronchick
Target Manager Allocation: 33%
Size of Company: Small- and mid-sized companies
Stock-Picking Style: Value
Idea generation is driven by both quantitative and qualitative processes. As a value-based, bottom-up manager, Cove Street consistently screens markets for securities that appear statistically inexpensive and allows that pool of ideas to drive its efforts and work rather than begin the day with a preconceived notion of securities it would like to buy. Cove Street also screens for “good businesses” as defined by classic characteristics like consistency of growth and profitability, high returns on invested capital, and sustainable competitive advantages; and determines if the valuation is cheap enough to provide a proper margin of safety. Lastly, Cove Street screens on corporate and executive behavior such as share repurchase and insider buying and selling. On a qualitative basis, ideas are produced from the team’s collective experience, Cove Street’s deep contact network, out-of-office experiences, and obvious headline issues.
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Segall Bryant & Hamill
Mark T.
Dickherber
Shaun P.
Nicholson
Target Manager Allocation: 33%
Size of Company: Small- and mid-sized companies
Stock-Picking Style: Value
Co-portfolio managers Mark Dickherber and Shaun Nicholson are small-cap value-oriented investors who seek to identify companies that have the potential for significant improvement in return on invested capital (ROIC). The idea being that as ROIC improves, each dollar invested in the business earns an incrementally higher return. Importantly, the co-managers disaggregate a company’s ROIC down to the business segment level to understand the drivers (and detractors) of a company’s profitability. Armed with segment-level return data they seek to identify companies with low embedded market expectations that have company-specific returns-improving catalysts.
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Wells Capital Management
Dick
Weiss
Target Manager Allocation: 33%
Size of Company: Small- and mid-sized companies
Stock-Picking Style: Blend
Weiss invests in stocks of small- and mid-sized companies that are undervalued either because they are not broadly recognized, are in transition, or are out of favor based on short-term factors. Weiss also has the flexibility to invest in the stocks of larger companies if in his opinion they offer the potential for better returns. In seeking attractively valued companies, Weiss focuses on companies with above-average growth potential that also exhibit some or all of the following: low institutional investor ownership and low analyst coverage, high-quality management, and sustainable competitive advantage.
Weiss evaluates the degree of under-valuation relative to his estimate of each company's private market value. This private market value approach is based on an assessment of what a private buyer would be willing to pay for the future cash flow stream of the target company.
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Monthly Performance as of 08/31/2017
| Average Annual Total Return | |||||||
|---|---|---|---|---|---|---|---|
| Monthly Performance as of 08/31/2017 | One Month | Year to Date | 12 Month Total Return | 3 Year Average | 5 Year Average | 10 Year Average | Since Inception 06/30/2003 |
Litman Gregory Masters Smaller Companies Fund MSSFX |
-2.28% | 1.55% | 10.45% | -1.43% | 7.50% | 4.68% | 7.58% |
|
Russell 2000 Index
|
-1.27% | 4.42% | 14.91% | 7.67% | 13.15% | 7.38% | 9.84% |
|
Morningstar Small Blend Category Average
|
-1.71% | 2.26% | 12.68% | 5.76% | 11.96% | 6.36% | 9.16% |
Quarterly Performance as of 06/30/2017
| Average Annual Total Return | |||||||
|---|---|---|---|---|---|---|---|
|
Quarterly Performance as of 06/30/2017 |
One Month | Year to Date | 12 Month Total Return | 3 Year Average | 5 Year Average | 10 Year Average | Since Inception 06/30/2003 |
Litman Gregory Masters Smaller Companies Fund MSSFX |
2.19% | 3.48% | 16.40% | -1.63% | 9.06% | 4.29% | 7.82% |
|
Russell 2000 Index
|
3.46% | 4.99% | 24.60% | 7.36% | 13.70% | 6.92% | 10.01% |
|
Morningstar Small Blend Category Average
|
2.53% | 3.27% | 20.96% | 5.66% | 12.71% | 5.87% | 9.35% |
Expense Ratios
| Gross Expense Ratio* | Net Expense Ratio** |
|---|---|
| 1.68% | 1.26% |
* The gross and net expense ratios can be found in the most recent Summary Prospectus (4/30/2017).
**The Advisor is contractually obligated to waive management fees and/or reimburse ordinary operating expenses through April 30, 2018.
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted.
Indexes are unmanaged, do not incur fees and cannot be invested in directly. Click here for index definitions.
Calendar Year Performance
| 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | |
|---|---|---|---|---|---|---|---|---|---|
|
Litman Gregory Masters Smaller Companies (MSSFX) |
19.17%a
|
20.98%
|
5.30%
|
9.67%
|
1.64%
|
-44.81%
|
50.57%
|
22.26%
|
0.47%
|
| Russell 2000 |
24.92%a
|
18.33%
|
4.55%
|
18.37%
|
-1.57%
|
-33.79%
|
27.17%
|
26.86%
|
-4.18%
|
| Morningstar Small Blend Category Average | 24.51%a | 18.86% | 6.92% | 15.20% | -1.36% | -36.89% | 32.10% | 25.60% | -4.27% |
| 2012 | 2013 | 2014 | 2015 | 2016 | |
|---|---|---|---|---|---|
|
Litman Gregory Masters Smaller Companies (MSSFX) |
18.51%
|
36.86%
|
-4.06% |
-13.24% |
18.82%
|
| Russell 2000 |
16.35%
|
38.82%
|
4.89% |
-4.41% |
21.31%
|
| Morningstar Small Blend Category Average | 15.32% | 37.55% | 3.83% | -5.34% | 20.62% |
a Performance from 7/1/03 - 12/31/03
Fund Facts
| Inception Date: | 6/30/2003 |
| Cusip Number: | 53700T 306 |
| Ticker Symbol: | MSSFX |
| Minimum Investment: | $10,000 ($1,000 retirement accounts) |
| Annual Expenses: | 1.68% gross; 1.26% net (as of 4/30/2017)* |
| Sales Loads: | None |
| 12B-1 Fees: | None |
| Phone: | (800) 960-0188 |
|
While the fund is no-load, management and other expenses still apply. |
|
*The Advisor is contractually obligated to waive management fees and/or reimburse ordinary operating expenses through April 30, 2018.
Portfolio Holdings
- To view our most recent portfolio holdings, please click here.
Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security.
Portfolio Composition (as of 6.30.17) |
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|
Sector Allocation vs. Russell 2000 Index (as of 6.30.17) |
 |
Fund holdings and/or sector allocations are subject to change at any time and are not recommendations to buy or sell any security.
Historical Fund Composition (as of 6.30.17) |
 |
Litman Gregory Masters Smaller Companies Fund Commentary, 2nd Quarter 2017
The fund outperformed its benchmark and peer group in the second quarter. Late in the quarter, we replaced longtime sub-advisor FPA with Segall Bryant & Hamill. The manager change led to a meaningful decline in the fund’s exposure to the energy sector, from an overweight to an underweight. ›› Read More
Performance quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the funds may be lower or higher than the performance quoted. To obtain the performance of the funds as of the most recently completed calendar month, please click www.mastersfunds.com. Indexes are unmanaged, do not incur fees, and cannot be invested in directly.