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Small Cap Value Fund

Mutual Funds

Small Cap Value Fund


Fund Managers

Photo of Gerald  Van Horn

Gerald Van Horn, CFA®

Overview

A
Shares

STSNX

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 stock of small capitalization companies (those with market capitalizations that are below the market capitalization of the largest company in the Russell 2000® Index). 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.

In addition to outperforming the broad market over longer periods of time, we believe that the Small Cap segment of the US equity market, given its less efficient nature, offers significant opportunity to add value through active portfolio management. A combination of a larger investment universe, less research coverage, and strong growth potential creates a favorable backdrop for investment in select under-followed and/or under-appreciated small companies.

Investment Considerations

Small 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 Class R6 Shares
Ticker STSNXSTSOXSTSCXSCSIX
Inception Date 11.16.201511.16.201504.12.199302.03.2020
Investment Min. $1,000$1,000$1,000,000N/A
Subsequent Investment Min.2 N/AN/AN/AN/A
Max. Up Front Sales Charge 5.75%N/AN/AN/A
Max. Deferred Sales Charge N/A1%N/AN/A

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

Small Cap Value Fund

Management

View professional designations disclosures

Photo of Gerald  Van Horn

Gerald Van Horn, CFA®

Portfolio Manager

Photo of Andrew  DiZio

Andrew DiZio, CFA®

Associate Portfolio Manager

Performance

Fund Performance as of 03.31.2024

Term QTR YTD 1 Year 3 Years 5 Years 10 Years Since Inception
A Shares with 5.75% Sales Charge 1.60% 1.60% 16.34% 4.33% 8.94% 6.84% 10.11%
A Shares without Sales Charge 7.79% 7.79% 23.44% 6.41% 10.23% 7.47% 10.32%
Institutional Shares 7.87% 7.87% 23.73% 6.67% 10.51% 7.69% 10.39%
Lipper Small-Cap Core Median 12.67% 15.97% 15.97% 7.44% 10.94% 7.20% N/A

The total expense ratios for Class A, C, and I Shares are 1.23%, 1.98% and 0.98%, respectively. The gross expense ratio for Class R6 Shares is 0.98%. The net expense ratio for Class R6 Shares is 0.88%.

The Fund Administrator, Sterling Capital Management LLC, has contractually agreed to waive its administrative fees, pay Fund operating expenses, and/or reimburse the Fund .10% of the Class R6 average daily net assets for the period February 1, 2021 through January 31, 2022. Performance would have been lower without limitations in effect.

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 Small Cap 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 04.12.1993. The inception date for Class R6 Shares is 02.03.2020. The performance shown reflects the reinvestment of all dividend and capital gains distributions.

Characteristics

Top Ten Holdings as of 03.31.2024

# Company Name Value
1 Moog, Inc. 4.00%
2 United Rentals, Inc. 3.98%
3 Casey'S General Stores, Inc. 3.66%
4 Caci International, Inc. 3.55%
5 Crane Co 3.54%
6 Oshkosh Corp. 3.39%
7 Selective Insurance Group, Inc. 3.34%
8 Wintrust Financial Corp. 3.31%
9 Ptc, Inc. 3.27%
10 West Pharmaceutical Services, Inc. 3.22%

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

Sector Allocation as of 03.31.2024

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 03.31.2024

The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 03.31.2024. It includes the reinvestment of dividends and capital gains.

Statistics

Risk/Return Statistics vs. Russell 2000® Value Index 3 as of 03.31.2024

Term Value
Alpha 1.41
Beta 0.89
R-Squared 93.54
Standard Deviation 19.07
Sharpe Ratio 0.33

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 03.31.2024

Term Value
Weighted Median P/E 19.63
Weighted Average P/B 2.30
Weighted Average Market Cap $10.16B
Annual Turnover 2%

Equity Funds

Insights

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05.31.2024

Equity Personnel Update

Today Sterling Capital announces the resignation of Shawn M. Gallagher, CFA®, Co-Portfolio Manager of the firm’s Mid Cap Relative Value and Real Estate strategies, effective immediately. Andrew T. DiZio, CFA®, who served as Co-Portfolio Manager on both strategies, will now serve as sole Portfolio Manager for both strategies, effective immediately.

05.07.2024 • Charles Wittmann, CFA®

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The Lead - "Seeking Advantaged Economies of Scale"

- One important advantage we seek in large capitalization stocks is having dominant market shares that provide economies of scale. - Economies of scale may make a company more profitable and earn higher returns on its capital than its competitors. - We believe it is possible to identify companies that gain scale, market share, and returns at the expense of competitors. - As we have stated for close to two decades as part of our investment philosophy, we believe size usually translates into cost advantages in production, marketing, and research and development expenditures that can be re-invested back into the business, making such advantages sustainable.

03.05.2024 • Charles Wittmann, CFA®

The Lead - "Advantaged Market Share"

- What makes an advantaged company? - In our view, one notable characteristic of an advantaged company is growing its market share. - Simply put, we believe companies with greater market share are more profitable. - We seek to field a portfolio of advantaged companies with strong and potentially growing market shares to position our clients to win.

Contact

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