(PUB) Investing 2015

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23 Morningstar FundInvestor November 2015
Data through October 31, 2015 FINRA members: For internal or institutional use only.
Meridian Small Cap Growth Investor Ticker
MISGX
Yield
0.0%
Total Assets
$277 mil
Mstar Category
Small Growth
Benchmark 1: Russell 2000 Growth TR USD
Benchmark 2: S&P 500 TR USD
Morningstar Analyst Rating 10-19-15
´
Morningstar Pillars
Process ∞ Positive
Performance ¶ Neutral
People ∞ Positive
Parent ∞ Positive
Price § Negative
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 „ ´ ‰ Á
Pillar Spectrum
∞ Positive § Negative ¶ Neutral
10.0
11.0
12.0
13.0
Historical Profile
Return
Risk
Rating
—
—
Not Rated
9 9 9 Investment Style
Equity
Growth of $10,000
Investment Values of
Fund
Investment Values of
Benchmark 1
& ) Performance Quartile
(within Category)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 10-15 History
. . . . . . . . 10.45 12.26 11.66 NAV
. . . . . . . . . 20.28 -4.89 Total Return %
. . . . . . . . . 14.68 -4.79 +/- Bmark 1
. . . . . . . . . 6.59 -7.60 +/- Bmark 2
. . . . . . . . . 0.00 0.00 Income Return %
. . . . . . . . . 20.28 -4.89 Capital Return %
. . . . . . . . . 1 82 Total Rtn % Rank Cat
. . . . . . . . . 0.00 0.00 Income $
. . . . . . . . . 0.30 0.00 Capital Gains $
. . . . . . . . . 3.63 1.33 Expense Ratio %
. . . . . . . . . -0.70 -0.83 Income Ratio %
. . . . . . . . . 78 45 Turnover Rate %
. . . . . . . . 0 50 151 Net Assets $mil
Performance 10-31-15
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2011 — — — — —
2012 — — — — —
2013 — — — — —
2014 6.60 4.58 -4.55 13.03 20.28
2015 3.67 2.05 -12.41 — —
Trailing Total
Return%
+/- Bmark
1
+/- Bmark
2
%Rank
Cat
Growth of
$10,000
3 Mo -8.26 0.24 -7.63 51 9,174
6 Mo -5.59 -2.12 -6.36 74 9,441
1 Yr -1.69 -5.21 -6.89 78 9,831
3 Yr Avg — — — — —
5 Yr Avg — — — — —
10 Yr Avg — — — — —
15 Yr Avg — — — — —
Tax Analysis Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated) — — — —
5 Yr (estimated) — — — —
10 Yr (estimated) — — — —
Potential Capital Gain Exposure: -3% of assets
Rating and Risk
Time
Period
Load-Adj
Return %
Morningstar
Rtn vs Cat
Morningstar
Risk vs Cat
Morningstar
Risk-Adj Rating
1 Yr -1.69
3 Yr — — — —
5 Yr — — — —
10 Yr — — — —
Incept 10.00
Other Measures Standard Index Best Fit Index
Alpha — —
Beta — —
R-Squared — —
Standard Deviation —
Mean —
Sharpe Ratio —
Portfolio Analysis 09-30-15
Total Stocks: 99
Share change since 06-30-15 Sector YTD Ret % % Assets
TClean Harbors Inc Industrl -3.25 2.92
TNational CineMedia Inc Cnsmr Cyc 3.41 2.25
TSolarWinds Inc Technology 16.46 2.25
TCEB Inc Industrl 4.63 2.20
RSolera Holdings Inc Technology 8.00 2.05
THeritage-Crystal Clean In Industrl -3.33 1.94
TBalchem Corp Basic Mat 2.49 1.83
THeartland Express Inc Industrl -30.06 1.81
TSP Plus Corp Industrl 1.07 1.81
TBank of the Ozarks Inc Finan Svcs 33.36 1.66
YProto Labs Inc Industrl -3.45 1.63
TRigNet Inc Technology -26.88 1.60
TEvolution Petroleum Corp Energy -5.11 1.54
TDel Frisco's Restaurant G Cnsmr Cyc -43.26 1.48
Heico Corp Class A Industrl -7.62 1.43
YWolverine World Wide Inc Cnsmr Cyc -36.38 1.41
THibbett Sports Inc Cnsmr Cyc -29.47 1.39
Y2U Inc Technology — 1.37
TForward Air Corp Industrl -9.23 1.29
TFive Below Inc Cnsmr Cyc -15.90 1.28
Current Investment Style
Large Mid Small
Value Blend Growth Market Cap %
Giant 0.0
Large 0.0
Mid 7.1
Small 45.3
Micro 47.7
Avg $mil:
994
Value Measures Rel Category
Price/Earnings 23.83 0.98
Price/Book 2.46 0.85
Price/Sales 1.38 0.83
Price/Cash Flow 10.58 0.91
Dividend Yield % 0.79 1.04
Growth Measures % Rel Category
Long-Term Erngs 15.44 0.96
Book Value 12.76 1.38
Sales 11.88 1.54
Cash Flow 12.23 1.47
Historical Erngs 7.03 0.74
Profitability %
Return on Equity 3.09
Return on Assets -0.53
Net Margin 2.85
Sector
Weightings
% of
Stocks
Rel
Bmark 1
h Cyclical 26.61 0.86
r BasicMat 2.07 0.38
t CnsmrCyc 18.99 1.09
y FinanSvcs 4.66 0.96
u Real Est 0.89 0.28
j Sensitive 55.28 1.37
i CommSrvs 0.00 0.00
o Energy 1.75 1.68
p Industrl 31.62 2.15
a Technlgy 21.91 0.95
k Defensive 18.10 0.63
s CnsmrDef 1.39 0.30
d Hlthcare 16.71 0.69
f Utilities 0.00 0.00
Composition - Net
Cash 10.8
Stocks 88.0
Bonds 0.0
Other 1.1
Foreign 4.8
(% of Stock)
Morningstar's Take by Greg Carlson 10-19-15
Meridian Small Cap Growth’s proven approach and
management team earn a Morningstar Analyst Rating of
Bronze. This fund is managed by Chad Meade and Brian
Schaub, who left Janus Capital to join Arrowpoint
Partners in mid-2013 just as the latter firm became the
advisor to the Meridian Funds. In September 2013,
MeadeandSchaub took thehelmofMeridianGrowthand
filled theportfoliowithamixofmid-andsmall-capgrowth
stocks (an approach they used successfully at Janus
TritonJATTX). InDecember2013, this fundwas launched
as a pure small-growth play similar to Janus Venture
JAVTX, the managers’ other former charge.
Meade and Schaub have successfully balanced risk
andprudencehere.They favorcompanieswithsignificant
competitive advantages and relatively sturdy cash flows
and balance sheets. But they’ve taken advantage of the
fund’ssmallsizebybuyingmanymicro-capstocks (which
comprised 48% of assets at the end of June, far above
the small-growth norm) and investing in a smattering of
IPOs. Those tactics are part of the reason the fund has
beaten all but one of its small growth peers and trounced
its Russell 2000 Growth benchmark from inception
through Sept. 30, 2015. The fund also benefited from
Meade and Schaub putting money to work slowly after
the fund’s launch (due to lofty valuations), as growth
stocks swooned in early 2014.
Is the managers’ strategy sustainable? Janus
Venturealreadyhad$1billion inassetswhen theduo took
the helm in mid-2010 and swelled to $2.3 billion by the
time they left Janus; its stake in micro-caps wasn’t much
higher than the category norm (it ranged from 15%-24%
of assets) during that span. That said, Meade and Schaub
have generally limited tiny companies to smaller
positions--which has helped the fund hold up well in
downturns--and are taking a more conservative approach
to capacity here--they would close the strategy at under
$2 billion under current market conditions. Also, while
most of this fund’s share classes are currently pricey, the
firm is working to trim fees. All told, this is an appealing
option.
Address: Meridian Fund Inc Minimum Purchase: $99999 Add: — IRA: —
Larkspur CA 94939 Min Auto Inv Plan: $99999 Add: —
800-446-6662 Sales Fees: No-load, 2.00%R
Web Address: Management Fee: 1.00%
Inception: 12-16-13 Actual Fees: Mgt:1.00% Dist:0.00%
Advisor: Arrowpoint Asset Management, LLC Expense Projections: 3Yr:$440 5Yr:$761 10Yr:$1669
Subadvisor: None Income Distribution: Annually
©2015Morningstar, Inc.All rights reserved. The information herein is not represented orwarranted to be accurate, complete or timely. Past
performance is no guarantee of future results.Access updated reports at . To order reprints, call 312-696-6100. ß® Mutual Funds A