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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

C
Shares

STSOX

Inception
Date

11.16.2015

Investment
Min.

$1,000

Subsequent
Investment Min.1

N/A

Max. Up Front
Sales Charge

N/A

Max. Deferred
Sales Charge

1%

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

Photo of Shawn  Gallagher

Shawn Gallagher, CFA®

Associate Portfolio Manager

Performance

Fund Performance as of 12.31.2023

Term QTR YTD 1 Year 3 Years 5 Years 10 Years Since Inception
A Shares with 5.75% Sales Charge 5.02% 10.66% 10.66% 7.42% 9.64% 6.54% 9.92%
A Shares without Sales Charge 11.42% 17.41% 17.41% 9.57% 10.95% 7.18% 10.13%
Institutional Shares 11.50% 17.70% 17.70% 9.84% 11.23% 7.39% 10.20%
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 12.31.2023

# Company Name Value
1 United Rentals, Inc. 4.29%
2 Moog, Inc. 4.05%
3 Casey's General Stores, Inc. 3.52%
4 First Industrial Realty Trust, Inc. 3.50%
5 Crane Co 3.46%
6 Selective Insurance Group, Inc. 3.40%
7 Meritage HomeSCorp. 3.40%
8 Caci International, Inc. 3.39%
9 Avient Corp. 3.39%
10 PTC, Inc. 3.38%

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

Sector Allocation as of 12.31.2023

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 12.31.2023

The Growth of $10,000 is hypothetical based upon the performance of net A Shares at NAV for the period ended 12.31.2023. It includes the reinvestment of dividends and capital gains.

Statistics

Risk/Return Statistics vs. Russell 2000® Value Index 3 as of 12.31.2023

Term Value
Alpha 1.22
Beta 0.89
R-Squared 93.54
Standard Deviation 19.06
Sharpe Ratio 0.32

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 12.31.2023

Term Value
Weighted Median P/E 17.82
Weighted Average P/B 2.23
Weighted Average Market Cap $9.65B
Annual Turnover 2%

Equity Funds

Insights

02.06.2024 • Charles Wittmann, CFA®

The Lead - "Actively Aware"

- By utilizing our investment process and our investment team, we believe we can build portfolios different from the benchmark and provide an opportunity to generate returns above the benchmark over time. - Ironically, many passive indexes make active bets themselves. In 2023, the S&P 500 Dividend Aristocrats suffered its worst performance relative to the S&P 500® Index since 1999. - We’ve believed for over 20 years that portfolio managers with material amounts of their net worth invested alongside clients incentivizes portfolio diversification and active adjustments, rather than a static index where there is no vested interest. Our mission is to generate above-average returns with below-average risk over time.

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02.02.2024

Sterling Capital Management LLC to be acquired by Guardian Capital Group Limited

We are delighted to announce that Guardian Capital Group Limited has reached an agreement under which Guardian’s wholly-owned subsidiary Guardian Capital LLC will acquire Sterling Capital from Truist. Post-closing, Sterling Capital will become an independently-operated subsidiary of Guardian.

01.22.2024 • Whitney Stewart, CFA®

Are the S&P 493 and Small Caps Well-Positioned for Attractive Performance?

During the calendar year of 2023, the “Magnificent Seven” (M7) of Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla rallied 111% on average, outperforming the S&P 500® Equal Weight Index (+14% total return for 2024) by 97%, leading to an all-time high concentration for the seven largest stocks in the S&P 500® Index. Based on the factors below, some investors believe the rest of the S&P 493 and small-cap stocks are positioned for attractive returns in 2024 and beyond.

01.04.2024 • Charles Wittmann, CFA®

The Lead - "Seeking Dividend Advantage"

- We believe we can position clients in an advantageous spot by owning stocks whose companies have a track record of paying cash dividends on a regular basis and growing that corporate dividend throughout the year. - Perhaps this higher certainty of receiving dividends that contribute to an investor’s total return is why dividend growth stocks have performed well in the later stages of a Federal Reserve interest rate tightening cycle. - Looking back over time, the return of the S&P 500® Index without dividends is roughly 60% of the return with dividends.

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12.14.2023 • Andrew Richman, CTFA

Fed Preps for Pivot

A bond market that had just come off its strongest month in nearly 40 years in November continued to rally as the Federal Reserve’s (Fed’s) final meeting of 2023 supported the notion that the next move by the Fed will likely be rate cuts.

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12.01.2023

Sterling Capital Announces Liquidation of the Diverse Multi-Manager Active ETF

Sterling Capital Announces Liquidation of the Diverse Multi-Manager Active ETF

Contact

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