4
Morningstar Analyst Rating
02-03-14
„
Morningstar Pillars
Process
Performance
People
Parent
Price
Positive
Positive
Positive
Positive
Positive
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst Rating Spectrum
Œ „ ´ˇ ¨
Pillar Spectrum
Positive
§
Negative
¶
Neutral
NAV
21.71
22.44
17.62
15.34
15.18
13.02
10.33
15.38
14.43
13.30
13.09
12.24
Total Return %
-3.25
30.74
15.69
3.30
17.77
27.01
-31.80
10.96
12.65
4.80
7.88
23.38
+/-S&P 500
0.21
-1.65
-0.31
1.19
2.71
0.55
5.20
5.47
-3.14
-0.11
-3.00
-5.30
+/-Russ 1000Gr
-0.40
-2.74
0.43
0.66
1.06
-10.20
6.64
-0.85
3.58
-0.46
1.58
-6.37
Income Return %
0.00
0.69
0.75
0.64
0.59
0.98
1.02
1.11
1.06
0.95
0.93
0.73
Capital Return %
-3.25
30.05
14.94
2.66
17.18
26.03
-32.82
9.85
11.59
3.85
6.95
22.65
Total Rtn % Rank Cat
72
76
43
12
10
50
10
13
75
59
78
81
Income $
0.00
0.12
0.12
0.10
0.08
0.10
0.16
0.16
0.14
0.12
0.11
0.07
Capital Gains $
0.00
0.47
0.01
0.24
0.08
0.00
0.00
0.47
0.41
0.30
0.00
0.00
Expense Ratio %
. .
0.80
0.80
0.80
0.80
0.80
0.80
0.80
0.80
0.80
0.80
Income Ratio %
. .
0.85
0.73
0.63
0.95
1.11
1.03
0.97
0.90
0.92
0.71
Turnover Rate %
. .
12
20
23
26
31
26
24
21
. .
Net Assets $mil
329
324
161
102
72
49
37
54
50
47
37
34
Performance
01-31-14
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-8.62 15.36 14.05 5.64 27.01
5.68 -9.23 10.01 11.60 17.77
7.18 0.00 -14.51 12.73
3.30
11.99 -4.71
7.64 0.72 15.69
10.84 1.43
6.06 9.64 30.74
Trailing
Total
+/-
+/- Russ %Rank Growth of
Return% S&P 500 1000Gr
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
2.61 0.61
-0.13
64 10,261
6.84 -0.01
-3.31
92 10,684
20.21 -1.31
-4.14
82 12,021
14.02 0.09
-0.35
35 14,823
19.24 0.05
-1.64
52 24,105
8.00 1.17
0.70
25 21,589
6.62 2.47
3.88
12 26,157
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
13.53
26
0.43
42
18.81
46
0.36
49
7.48
25
0.48
62
Potential Capital Gain Exposure: 25% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
20.21
3 Yr
14.02
Avg
-Avg
5 Yr
19.24
Avg
-Avg
10 Yr
8.00
+Avg
Low
Incept
8.40
Other Measures
Standard Index
Best Fit Index
S&P 500
R3000
Alpha
0.0
0.2
Beta
1.01
0.97
R-Squared
96
97
Standard Deviation
12.78
Mean
14.02
Sharpe Ratio
1.09
Morningstar’s Take
by Katie Rushkewicz Reichart, CFA 02-03-14
LKCM Equity is worth owning.
This fund hasn’t garnered a ton of attention or
assets, but it’s a solid large-cap pick. Lead manager
and firm founder Luther King has run the fund since its
late 1995 inception, though he’s been running money in
a similar fashion since founding the firm in 1979.
King focuses on companies with high returns on
equity, strong cash flows, and reasonable debt loads,
which has kept the fund’s volatility in check. Valuation
factors in, too, though he avoids deep-value plays and
prefers to invest in good businesses even if they look a
little pricey on traditional valuation metrics, such as
current holdings Google GOOG and Amazon.com
AMZN. As a result, the fund currently lands in
Morningstar’s large-growth category.
By no means is it an aggressive growth fund,
though. Its long-term earnings growth and sales
growth are typically below most category peers’, as it’s
avoided some of the most speculative names. Instead
it prefers a good dose of steady blue-chip growers,
including longtime holdings Procter & Gamble PG and
Kimberly Clark KMB. Accordingly, the fund falls near
the growth/blend border of the Morningstar Style Box,
so investors shouldn’t be concerned if it doesn’t keep
pace with its racier category rivals. It lagged three
fourths of its peers in 2013, for instance, but its 30.7%
gain was actually quite impressive considering it held
10% cash during a huge equity rally.
King isn’t concerned about whether the fund neatly
fits into a particular section of the style box, and that
flexibility has served shareholders well. Top
contributors in recent years have been
lower-market-cap names that aren’t in the fund’s S&P
500 benchmark, including Tractor Supply TSCO, Kirby
KEX, and Jarden JAH. This approach has given the
fund an edge over the benchmark and large-growth
and large-blend peers since inception, particularly on a
risk-adjusted basis.
Finally, the fund charges a reasonable fee
considering its small asset base.
Address:
301 Commerce
Fort Worth, TX 76102
800-688-5526
Web Address:
Inception:
12-29-95
Advisor:
Luther King Capital Mgmt Corp
Subadvisor:
None
NTF Plans:
N/A
Minimum Purchase:
$2000
Add: $1000 IRA: $0
Min Auto Inv Plan:
$2000
Add: $100
Sales Fees:
No-load, 1.00%R
Management Fee:
0.70%
Actual Fees:
Mgt:0.70% Dist:
.
Expense Projections:
3Yr:$293
5Yr:$521 10Yr:$1175
Income Distribution:
Annually
Data through January 31, 2014
LKCM Equity Instl
Ticker
Status Yield Total Assets
Mstar Category
LKEQX Open
0.6% $329 mil
Large Growth
99% 99% 100% 94% 92% 97% 89% 91%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 01-14
Historical Profile
Return
Risk
Rating
Average
Below Avg
Above Avg
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
S&P 500
Performance Quartile
(within Category)
History
10.0
14.0
18.0
22.0
26.0
Portfolio Analysis
12-31-13
Share change since 09-13 Total Stocks:78 Sector
PE Tot Ret% % Assets
Invesco Short-Term Inv T
. . .
2.88
Federated Govt Obligs In
. . .
2.85
Dreyfus Government Cash
. . .
2.85
Google, Inc. Class A
Technology 33.0 5.38 2.77
Thermo Fisher Scientific
Hlth care 31.6 3.40 2.06
Monsanto Company
Basic Mat 22.9 -8.21 1.98
Apple Inc
Technology 12.4 -10.77 1.87
Union Pacific Corp
Industrl
19.2 3.71 1.82
Cabot Oil & Gas Corporat
Energy
69.4 3.20 1.80
Danaher Corporation
Industrl
20.8 -3.64 1.79
International Business M Technology 12.2 -5.81 1.74
Prudential Financial Inc
Finan Svs
.
-8.49 1.71
E.I. du Pont de Nemours
Basic Mat 21.2 -6.10 1.71
Jarden Corporation
Cnsmr Cyc 31.3 -1.47 1.71
Honeywell International,
Industrl
22.5 -0.15 1.69
Wells Fargo & Co
Finan Svs 11.9 -0.13 1.68
Trimble Navigation Ltd.
Technology 43.9 -6.83 1.66
Gentex Corporation
Cnsmr Cyc 24.1 -1.36 1.63
Comerica Inc
Finan Svs 15.7 -3.66 1.59
Celgene Corporation
Hlth care 43.7 -10.08 1.57
Current Investment Style
Market Cap %
Giant
35.5
Large
29.5
Mid
31.5
Small
3.5
Micro
0.0
Avg $mil:
34,767
Value Blnd Growth
Large Mid Small
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
18.25
2.97
2.07
9.46
1.65
1.02
1.03
1.14
0.95
1.25
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
10.30
7.75
6.60
10.05
-13.84
0.77
0.75
0.82
0.78
NMF
Profitability
% Rel Category
Return on Equity
Return on Assets
Net Margin
19.59
8.08
14.41
0.94
0.83
1.02
Sector
Weightings
% of
Stocks
Rel
S&P 500 High
3 Year
Low
Cyclical 31.33 1.09
BasicMat 7.05 2.30 12 6
CnsmrCyc13.00 1.52 16 11
FinanSvs 11.28 0.72 12 9
Real Est 0.00 0.00 1 1
Sensitive 48.88 1.12
CommSrvs 2.22 0.55 2 1
Energy 10.29 0.96 13 9
Industrl 19.67 1.73 20 14
Technlgy 16.70 0.95 19 16
Defensive19.81 0.72
CnsmrDef 6.59 0.54 9 6
Hlthcare 13.22 1.12 15 11
Utilities 0.00 0.00
. .
h
r
t
y
u
j
i
o
p
a
k
s
d
f
Composition - Net
(% of Stock)
Cash
8.6
Stocks 91.4
Bonds 0.0
Other
0.0
Foreign 0.0
©
2014Morningstar, Inc.All rights reserved.The informationherein is not represented orwarranted tobeaccurate, correct, completeor
timely. Pastperformance is no guarantee of future results.Access updated reportsat
Toorder reprints, call312-696-6100.
mfb.morningstar.com.
Mutual Funds
ß
®
EQ
∞
∞
∞
∞
∞
∞
