23
Morningstar FundInvestor
November
2013
Morningstar Analyst Rating
10-08-13
´
Morningstar Pillars
Process
Performance
People
Parent
Price
¶
¶
Positive
Positive
Positive
Neutral
Neutral
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
13.62
11.59
11.10
10.03
9.20
9.99
10.70
9.90
. . . .
Total Return %
12.30
7.95
7.10
13.77
12.18
-4.58
0.43
12.60
22.22
. . .
*
*
+/-M* MdTgRk
0.25
-4.09
6.51
1.44
-9.59
17.61
-8.20
-0.35
. . . .
+/-Mstr Md Cn Rk
4.66
-1.71
4.50
4.12
-3.13
8.48
-7.58
2.88
. . . .
Income Return %
1.27
2.05
2.63
2.94
3.04
3.45
5.51
4.30
. . . .
Capital Return %
11.03
5.90
4.47
10.83
9.14
-8.03
-5.08
8.30
. . . .
Total Rtn % Rank Cat
2
74
5
6
92
1
93
24
. . . .
Income $
0.15
0.29
0.29
0.28
0.34
0.58
0.42
0.04
. . . .
Capital Gains $
0.00
0.00
0.00
0.00
0.00
0.20
0.00
0.00
. . . .
Expense Ratio %
.
0.90
0.90
0.90
1.00
1.00
1.00
1.00
. . . .
Income Ratio %
.
2.63
2.93
3.18
3.22
3.57
5.45
4.89
. . . .
Turnover Rate %
.
24
26
34
91
99
62
45
. . . .
Net Assets $mil
1,403
815
504
223
146
80
114
92
3
. . .
Performance
10-31-13
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
Total
2009
2010
2011
2012
2013
-3.85 4.53
6.71 4.59 12.18
3.23 -0.27
7.54 2.76 13.77
3.20 1.51
-5.49 8.18
7.10
4.24 0.60
3.72 -0.75
7.95
8.46 0.91
0.27
. .
Trailing
Total
+/- M* +/- Mstr
%Rank Growth of
Return% MdTgRk Md Cn Rk
Cat
$10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
1.01 -2.79
-1.70
93 10,101
1.32 -3.75
-1.59
58 10,132
12.27 -1.77
3.46
8 11,227
9.32 -0.01
2.13
7 13,065
10.61 -1.09
1.13
26 16,557
. . . . .
. . . . .
Tax Analysis
Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
8.51
3
0.74
31
9.64
22
0.88
34
. . . .
Potential Capital Gain Exposure: 12% of assets
Rating and Risk
Time Load-Adj
Morningstar
Morningstar
Morningstar
Period Return % Rtn vs Cat
Risk vs Cat
Risk-Adj Rating
1 Yr
12.27
3 Yr
9.32
High
Avg
5 Yr
10.61
+Avg
Avg
10 Yr
. . . .
Incept
7.58
Other Measures
Standard Index
Best Fit Index
M* MdTgRk
DJ IndusAvg
Alpha
2.9
2.9
Beta
0.67
0.52
R-Squared
75
82
Standard Deviation
6.56
Mean
9.32
Sharpe Ratio
1.38
Morningstar’s Take
by Laura Lallos 10-08-13
Westwood Income Opportunity has made good use of
its freedom.
This newly rated Bronze offering is one of the best
in the conservative-allocation category for the year to
date, with a 9.7% return through Oct. 4. Given that its
equity stake is now twice the category norm of 25%,
its outperformance during a stock rally may seem a
given.
There’s more to the story. Since its late 2005
inception, the fund has returned an annualized 7.3%,
compared with 4.5% for its average peer. Its mild loss
in 2008 reflects a lower stock allocation (between 20%
and 40%) dating back to 2006, when manager Mark
Freeman couldn’t pass up 6% yields on high-quality
bonds. That quality focus held it back in 2009. Freeman
began buying attractively valued equities following the
financial crisis and kicked off a great run.
The fund is now on the cusp of Morningstar’s
moderate-allocation category (which includes funds
with equity stakes between 50% and 70%). Yet its risk
profile is in line with the conservative-allocation
category: Its Morningstar Risk ratings, which
emphasize downside risk, are below average over the
five-year period. With rising rates an inevitable threat
to fixed-income investments, this fund is positioned to
hold up better than many of its peers over the near
term.
How to use it? Its quirky custom benchmark is not
much of a guide: 25% S&P 500 Index, 25% FTSE
NAREIT Equity Index, 25% 3-month T-bills, and 25%
10-year Treasuries. Freeman says that isn’t a neutral
allocation but that it reflects the fund’s ability to move
among a wide range of securities, with REITs standing
in for master limited partnerships, convertible bonds,
and preferred stocks. He says it would be fair to
consider this an alternative to a 60/40 balanced fund.
It has beat Vanguard Balanced Index VBINX by a
percentage point annualized since inception with
lower standard deviation.
It is not for investors looking to maximize income
but is a strong choice for those who share Freeman’s
goal: attractive total return with moderate risk.
Address:
Westwood Funds
Kansas City, MO
877-386-3944
Web Address:
Inception:
12-19-05
Advisor:
Westwood Management Corp Texas
Subadvisor:
None
NTF Plans:
N/A
Minimum Purchase:
$100000
Add: $0 IRA: $0
Min Auto Inv Plan:
$100000
Add: $25
Sales Fees:
No-load
Management Fee:
0.75%, 0.12%A
Actual Fees:
Mgt:0.75% Dist:
.
Expense Projections:
3Yr:$290
5Yr:$504 10Yr:$1120
Income Distribution:
Quarterly
Data through October 31, 2013
Westwood Income Opportunity Instl
Ticker
Status Yield Total Assets
Mstar Category
WHGIX Open
1.6% $1,549 mil
Conservative Allocation
58% 35% 30% 19% 41% 51% 55% 58% 57%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 10-13
Historical Profile
Return
Risk
Rating
Above Avg
Average
Above Avg
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
M* MdTgRk
Performance Quartile
(within Category)
History
10.0
8.0
12.0
14.0
16.0
Portfolio Analysis
09-30-13
Total Stocks:39
P/E
YTD % Net
Share change since 06-30-13
Sectors
Ratio Return % Assets
Novartis AG ADR
Hlth care
16.1 27.85 2.45
PepsiCo Inc
Cnsmr Def
17.3 25.74 2.41
General Mills, Inc.
Cnsmr Def
14.7 28.35 2.39
General Electric Co
Industrl
15.1 28.63 2.38
Johnson & Johnson
Hlth care
18.8 35.46 2.31
Spectra Energy Corp
Energy
19.2 32.56 2.15
Travelers Companies, Inc.
Finan Svs
11.3 22.61 1.95
U.S. Bancorp
Finan Svs
11.0 19.58 1.94
Alexandria Real Estate Eq
Real Est
66.2 -1.47 1.92
Date of
Amount
Value % Net
Total Fixed-Income:33
Maturity
$000
$000 Assets
General Elec Cap FRN
12-31-49 12,500 13,594 0.93
Citigroup FRN
12-29-49 14,000 13,090 0.89
FNMA 1.125%
04-27-17 13,000 13,045 0.89
Total Cap 2.7%
01-25-23 13,750 12,802 0.87
Occidental Pete Corp Del
02-15-23 11,500 10,625 0.72
FNMA 2.625%
11-20-14 10,000 10,280 0.70
Bk Amer Fdg 5.65%
05-01-18
9,000 10,157 0.69
FHLMC 3.75%
03-27-19
8,000 8,803 0.60
FHLMC 2.375%
01-13-22
9,000 8,760 0.60
Equity Style
Fixed-Income Style
Style: Blend
Size: Large-Cap
Duration:
.
Quality:
.
Avg Eff Duration
.
Avg Eff Maturity
.
Avg Credit Quality
.
Avg Wtd Coupon
3.79%
figure provided by fund
1
1
Value Measures
Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
17.82
1.96
1.65
9.51
3.35
1.20
1.05
1.20
1.38
1.20
Growth Measures
% Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
8.75
8.66
5.53
-0.34
3.85
0.85
5.81
1.07
NMF
0.06
Market Cap %
Giant 42.9
Large 39.0
Mid 16.0
Small
2.1
Micro
0.0
Avg $mil:
46,599
Composition - Net
(% of Stock)
Cash 22.1
Stocks 56.9
Bonds 11.8
Other
9.2
Foreign 4.3
Sector
Weightings
% of
Stocks
Rel M*
MdTgRk High
3 Year
Low
Cyclical 25.13 0.64
BasicMat 5.32 0.90 5 2
CnsmrCyc 2.19 0.19 7 2
FinanSvs 10.59 0.60 11 2
Real Est 7.03 1.80 14 5
Sensitive 49.82 1.32
CommSrvs 4.27 1.11 7 2
Energy 27.45 3.03 31 20
Industrl 10.53 0.87 11 6
Technlgy 7.57 0.59 9 2
Defensive25.06 1.08
CnsmrDef10.55 1.20 13 8
Hlthcare 10.46 1.03 13 10
Utilities 4.05 0.97 18 4
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2013Morningstar, Inc.All rights reserved. The information herein isnot represented orwarranted to be accurate, correct, complete or
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