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Mid Cap Relative Value Fund

Mutual Funds

Mid Cap Relative Value Fund


Fund Managers

Photo of Andrew  DiZio

Andrew DiZio, CFA®

Overview

A
Shares

STRLX

Inception
Date

11.16.2015

Investment
Min.

$1,000

Subsequent
Investment Min.1

N/A

Max. Up Front
Sales Charge

5.75%

Max. Deferred
Sales Charge

N/A

1If subsequent investments are made as part of an AIP, the minimum is $25.

Philosophy & Process

The Fund uses a value investment approach to invest primarily in common stocks of mid-size companies. We believe that undervalued companies with good earnings prospects have superior appreciation potential with reasonable levels of risk. Quantitatively, we focus on a stock's fundamental valuation relative to its peers. Qualitatively, we seek to identify business catalysts which will serve to drive future earnings growth, increase investor interest and expand valuation.

Within the U.S. equity universe, it is our view that the mid-cap segment offers an attractive mix of growth and stability. Compared to smaller peers, mid-cap stocks are more likely to have proven business models and greater financial flexibility, yet in many cases, still have the potential for rapid growth. As a result, over longer periods of time, Mid-cap stocks have exhibited superior risk-adjusted returns versus both small caps and large caps.

Investment Considerations

Mid-size company stocks are generally riskier than large company stocks due to greater volatility and less liquidity. Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time.

Fund Facts

Term Class A Shares Class C Shares Class I Shares
Ticker STRLXSTRNXSTRGX
Inception Date 11.16.201511.16.201509.30.1972
Investment Min. $1,000$1,000$1,000,000
Subsequent Investment Min.2 N/AN/AN/A
Max. Up Front Sales Charge 5.75%N/AN/A
Max. Deferred Sales Charge N/A1%N/A

2If subsequent investments are made as part of an AIP, the minimum is $25.

Mid Cap Relative Value Fund

Management

View professional designations disclosures

Photo of Andrew  DiZio

Andrew DiZio, CFA®

Portfolio Manager

Performance

Fund Performance as of 06.30.2024

Term QTR YTD 1 Year 3 Years 5 Years 10 Years Since Inception
A Shares with 5.75% Sales Charge -10.00% -1.68% 5.49% 1.54% 7.05% 6.41% 9.89%
A Shares without Sales Charge -4.51% 4.31% 11.94% 3.57% 8.33% 7.04% 10.01%
Institutional Shares -4.44% 4.45% 12.23% 3.83% 8.60% 7.28% 10.06%
Lipper Mid-Cap Value Median -3.55% 3.44% 10.49% 5.22% 8.45% 7.13% N/A

The total expense ratios for Class A, C, and I are 1.13%, 1.88% and 0.88%, respectively.

Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. 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 the original cost. To obtain performance information current to the most recent month end, please visit the performance summary.

The performance of the Sterling Capital Mid Cap Relative Value Fund reflects the deduction of fees for value-added services associated with a mutual fund, such as investment management and fund accounting fees. The inception date for Class A Shares is 11.16.2015. The inception date for Class C Shares is 11.16.2015. The inception date for Class Inst'l Shares is 09.30.1972. The performance shown reflects the reinvestment of all dividend and capital gains distributions. Performance is annualized for periods greater than one year.

The performance shown prior to 11.16.2015 is that of the Stratton Mid Cap Value Fund (the "Predecessor Fund") which reorganized into the Sterling Capital Mid Cap Relative Value Fund Institutional Shares (the Fund). Because the Fund had no investment operations prior to the closing of the reorganization, and based on the similarity of the Fund to the Predecessor Fund, the Predecessor Fund is treated as the survivor of the reorganization for accounting and performance reporting purposes. The inception date of the Predecessor Fund is 09.30.1972.

Performance for Class A is based on the performance of the Institutional Shares of the Predecessor Fund. Class A Shares and Institutional Shares of the Fund would have substantially similar performance because the Shares are invested in the same portfolio of securities and the performance would differ only to the extent that the Classes have different expenses.

Characteristics

Top Ten Holdings as of 06.30.2024

# Company Name Value
1 Carlisle Cos., Inc. 4.10%
2 Casey's General Stores, Inc. 3.89%
3 CACI International, Inc. 3.83%
4 Icon PLC 3.42%
5 Fiserv, Inc. 3.36%
6 Ameriprise Financial, Inc. 3.33%
7 Nvent Electric PLC 3.13%
8 United Rentals, Inc. 3.13%
9 Avery Dennison Corp. 2.98%
10 Performance Food Group Co 2.77%

Current and future portfolio holdings are subject to change and risk. Based on Market Value of securities.

Sector Allocation as of 06.30.2024

Allocations are based on the current weight to funds in the cited Sector. The composition of the fund's holdings is subject to change.

Growth of $10,000 as of 06.30.2024

The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 06.30.2024. It includes the reinvestment of dividends and capital gains.

Statistics

Risk/Return Statistics vs. Russell Midcap® Value Index 3 as of 06.30.2024

Term Value
Alpha 0.17
Beta 0.93
R-Squared 95.23
Standard Deviation 16.78
Sharpe Ratio 0.34

3The Funds composition is subject to change. Annual Turnover Ratio is 12 month rolling calculation. Alpha, Beta, R-Squared, Standard Deviation, and Sharpe Ratio are based on a 10-year calculation.

View a Glossary of Terms.

Summary Statistics as of 06.30.2024

Term Value
Weighted Median P/E 25.90
Weighted Average P/B 2.45
Weighted Average Market Cap $25.64B
Annual Turnover 5%

Equity Funds

Insights

09.18.2024 • Brandon Carl, CFA®

U.S. Equity Market Performance Following the First Fed Funds Rate Cut

After two and a half years of battling elevated inflation with aggressive monetary policy tightening measures, the Federal Reserve (Fed) finally reduced the federal funds target rate range (fed funds rate) by 50 basis points during its September 2024 meeting. With recent inflation indicators seemingly within the Fed’s comfort zone, coupled with an increasing emphasis on supporting the labor market, we believe it’s highly likely that additional rate cuts are forthcoming.

09.12.2024 • Will Smith, CFA®

Down but Not Out: Why Mid-Cap Value Appears Increasingly Attractive

For almost a decade, large-cap growth has been a dominant factor driving market returns. However, we see mounting evidence mid-cap value stocks are due for a comeback. We have long argued mid caps are a potential “sweet spot” for investors. We believe they boast better liquidity, stronger balance sheets, and more durable competitive advantages than small-cap peers and are often more nimble, focused, and less well covered by the sell side than large caps.

09.04.2024 • Charles Wittmann, CFA®

The Lead - Dividend Opportunities

- As we enter September, it appears the Federal Reserve is prepared to lower the federal funds rate at their September 18, 2024 meeting.
- Historically, dividend payers have outperformed non-dividend payers after the first cut.
- One may question if historically it has been better to own high yielders versus dividend growers, and if it has been better to own slower or faster dividend growers. We address these topics in this month’s piece.

08.29.2024

Guardian Capital buys Sterling Capital Management from Truist

(pionline.com) Guardian Capital, a wholly owned subsidiary of Guardian Capital Group, will acquire investment manager Sterling Capital Management from Truist Financial.

08.27.2024 • Andrew DiZio, CFA®

Higher Interest Rates & REITs - Looking Ahead at Lower New Supply

The market has spent much of the last two years fixated on the negative effects of rising rates on Real Estate Investment Trust (REIT) share prices. What has received less attention is the slowdown in new developments of commercial and multifamily real estate due to higher interest rates and the potential for higher rents in coming years should consistent demand growth be unmet by new supply. We believe publicly-traded REITs, which derive much of their earnings growth from existing real estate rather than new development, are overlooked future beneficiaries of this construction slowdown.

08.13.2024
James Kerin, CFA®, Michael McVicker

Natural Gas Prepayment Bonds

Energy prepayment (prepay) bonds enable municipal utilities to lock into a discounted price on a long-term supply of energy, most commonly natural gas or electricity. Issued by special purpose authorities, bonds are structured with far-dated final maturities but shorter-dated mandatory tenders that are backed by the obligation of a bank or insurance company, known as the guarantor, to ensure that it occurs in order to return principal to bondholders. As a result, prepay bonds are ultimately a corporate credit exposure in the tax-exempt market. The final maturity matches the term of the energy supply contract and improves the bond’s market discount tax treatment, while the shorter-dated tender serves to optimize borrowing costs within the transaction.

Contact

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