(PUB) Investing 2015

Morningstar Analyst Rating

01-23-15

Morningstar Pillars

Process

Performance

People

Parent

Price

Positive

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

20.65

20.86

17.10

15.25

15.61

14.14

11.04

15.26

15.19

13.39

12.66

11.02

Total Return %

-2.69

12.36

30.48

14.86

1.49

11.41

29.68

-26.91

4.11

16.68

9.12

17.52

+/-S&P 500

0.31

-1.33

-1.91

-1.14

-0.62

-3.65

3.22

10.09

-1.38

0.89

4.21

6.64

+/-Russ 1000

0.06

-0.88

-2.63

-1.56

-0.01

-4.69

1.25

10.69

-1.66

1.22

2.85

6.12

Income Return %

0.00

0.87

1.03

1.29

1.14

0.97

1.55

0.75

0.89

0.74

0.27

0.66

Capital Return %

-2.69

11.49

29.45

13.57

0.35

10.44

28.13

-27.66

3.22

15.94

8.85

16.86

Total Rtn % Rank Cat

Income $

0.00

0.18

0.20

0.18

0.14

0.17

0.11

0.13

0.10

0.03

0.07

0.03

Capital Gains $

0.00

1.24

0.21

0.42

0.00

0.43

0.33

0.37

0.20

0.13

Expense Ratio %

0.94

0.96

0.97

1.00

1.13

Income Ratio %

0.87

0.95

1.25

1.03

1.18

1.80

1.13

1.06

0.88

0.64

0.85

Turnover Rate %

Net Assets $mil

9,280

9,631

8,689

6,233

4,477

3,676

2,404

1,543

639

301

Performance

01-31-15

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

Total

2010

2011

2012

2013

2014

5.66 -10.31

7.91 8.95 11.41

4.74 1.83 -14.05 10.71

1.49

11.08 -2.07

4.76 0.79 14.86

11.40 3.10

4.48 8.74 30.48

2.49 5.75

-1.77 5.53 12.36

Trailing

Total

+/-

+/- Russ %Rank Growth of

Return% S&P 500

1000

Cat

$10,000

3 Mo

6 Mo

1 Yr

3 Yr Avg

5 Yr Avg

10 Yr Avg

15 Yr Avg

0.56 1.20

0.99

12 10,056

2.69 -1.68

-1.66

61 10,269

14.21 -0.01

0.45

17 11,421

16.10 -1.37

-1.52

54 15,649

13.18 -2.42

-2.66

69 18,572

9.05 1.44

1.12

4 23,782

. . . . .

Tax Analysis

Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat

3 Yr (estimated)

5 Yr (estimated)

10 Yr (estimated)

14.15

1.68

11.83

1.19

8.05

0.92

Potential Capital Gain Exposure: 23% of assets

Rating and Risk

Time Load-Adj

Morningstar

Period Return % Rtn vs Cat

Risk vs Cat

Risk-Adj Rating

1 Yr

14.21

3 Yr

16.10

Avg

-Avg

5 Yr

13.18

Avg

-Avg

10 Yr

9.05

High

Low

Incept

8.92

Other Measures

Standard Index

Best Fit Index

S&P 500

Alpha

0.4

Beta

0.90

R-Squared

Standard Deviation

8.76

Mean

16.10

Sharpe Ratio

1.75

Morningstar’s Take

by Gretchen Rupp 01-23-15

FMI Large Cap continues to execute a prudent brand of

value investing that has kept it on a steady course,

earning it a Morningstar Analyst Rating of Gold. Pat

English’s team favors high-quality businesses with

stable, recurring revenues and strong returns on

invested capital. They are conscious of valuations and

will trim holdings whose future return characteristics

are diminished by lofty price multiples.

The team doesn t play a short-term game. It plans

for the long term, holding stocks for three to five years

on average. The fund’s turnover rate of 31% clocks in

at half the large-blend Morningstar Category average.

Professional services firm Accenture ACN and

diversified industrial 3M MMM have both been

holdings for more than five years. Accenture has

demonstrated exceptional return on invested capital, a

key metric for the team. And 3M continues to generate

solid free cash flows and has a strong balance sheet,

virtually clear of debt. Always on the hunt for good

stewards of capital trading at reasonable prices, the

team has found slim pickings of late. It is especially

skeptical of the uptick in mergers and acquisitions in a

pricey market. The team sold media firm Omnicom

Group OMC in 2013 after it announced a merger with

rival Publicis Groupe because it saw a cultural

mismatch. Omnicom came to a similar conclusion,

walked away from the deal, denounced future

acquisition plans, and FMI reestablished a stake in the

company. Holding Covidien benefited from

Medtronic’s MDT buyout, but the team generally

doesn’t favor its holdings making excessive

acquisitions. Recent purchase Honeywell HON is an

exception. English says its management has a proven

record of making accretive acquisitions.

It often lags in frothy markets but has delivered in

spades over time. Its 12.4% return in 2014 just lagged

the S&P 500’s but still topped 60% of large-blend

funds. Over the long haul it has delivered solid returns

in buoyant markets while losing less in downdrafts; an

annualized 9.2% return since inception outpaces 97%

of peers and tops the benchmark by 2.5% annually,

with considerably less volatility.

Address:

FMI Funds Inc

Milwaukee, WI 53202

800-811-5311

Web Address:

www.fmifunds.com

Inception:

12-31-01

Advisor:

Fiduciary Management, Inc. of Milwaukee

Subadvisor:

None

NTF Plans:

Fidelity Retail-NTF, CommonWealth NTF

Minimum Purchase:

Closed

Add:

IRA:

Min Auto Inv Plan:

Closed

Add:

Sales Fees:

No-load

Management Fee:

0.75%, 0.20%A

Actual Fees:

Mgt:0.75% Dist:

Expense Projections:

3Yr:$306

5Yr:$531 10Yr:$1178

Income Distribution:

None

Data through January 31, 2015

FMI Large Cap

Ticker

Status Yield Total Assets

Mstar Category

FMIHX Closed 0.8% $9,280 mil

Large Blend

90% 93% 92% 91% 100% 93% 92% 93%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 01-15

Historical Profile

Return

Risk

Rating

Above Avg

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

12-31-14

Share change since 09-14 Total Stocks:25 Sector

PE Tot Ret% % Assets

Potash Corp of Saskatche

Basic Mat 22.9 11.41 5.70

UnitedHealth Group Inc

Hlth care 19.1 36.12 5.62

Accenture PLC Class A

Technology 19.2 10.99 5.50

Berkshire Hathaway Inc C

Finan Svs 16.3 26.64 5.21

Bank of New York Mellon

Finan Svs 14.6 18.00 5.02

AmerisourceBergen Corp

Hlth care 78.7 29.65 4.49

American Express Co

Finan Svs 14.9 3.63 3.73

Danone ADR

Cnsmr Def 33.0 -7.63 3.71

Devon Energy Corp

Energy

11.1 0.45 3.66

Progressive Corp

Finan Svs 12.8 4.45 3.61

Microsoft Corp

Technology 16.3 27.24 3.56

Honeywell International

Industrl

18.4 11.40 3.56

PACCAR Inc

Industrl

16.5 -11.62 3.54

Schlumberger NV

Energy

19.1 -3.54 3.48

Comerica Inc

Finan Svs 14.0 0.19 3.35

Ross Stores Inc

Cnsmr Cyc 21.6 26.87 3.35

Omnicom Group Inc

Cnsmr Cyc 17.5 6.72 3.30

3M Co

Industrl

22.3 19.60 3.14

Comcast Corp Class A

Comm Svs 16.8 12.93 3.12

Nestle SA ADR

Cnsmr Def 23.7 1.89 3.11

Current Investment Style

Market Cap %

Giant

39.7

Large

47.5

Mid

12.8

Small

0.0

Micro

0.0

Avg $mil:

50,869

Value Blnd Growth

Large Mid Small

Value Measures

Rel Category

Price/Earnings

Price/Book

Price/Sales

Price/Cash Flow

Dividend Yield %

17.43

2.76

1.27

11.72

1.94

1.21

1.35

1.01

1.65

0.89

Growth Measures

% Rel Category

Long-Term Erngs

Book Value

Sales

Cash Flow

Historical Erngs

10.25

7.69

11.12

4.49

8.61

0.99

1.45

3.82

0.66

0.48

Profitability

% Rel Category

Return on Equity

Return on Assets

Net Margin

20.52

7.48

11.11

1.07

0.97

0.87

Sector

Weightings

% of

Stocks

Rel

S&P 500 High

3 Year

Low

Cyclical 38.81

BasicMat 6.15

7 2

CnsmrCyc10.07

14 3

FinanSvs 22.59

23 18

Real Est 0.00

. . .

Sensitive 40.51

CommSrvs 3.37

3 3

Energy 7.71

11 6

Industrl 16.37

25 16

Technlgy 13.06

13 11

Defensive20.67

CnsmrDef 9.75

20 9

Hlthcare 10.92

15 10

Utilities 0.00

. . .

Composition - Net

(% of Stock)

Cash

7.4

Stocks 92.6

Bonds 0.0

Other

0.0

Foreign 15.9

timely. Pastperformance is no guarantee of future results.Access updated reportsat

Toorder reprints, call312-696-6100.

mfb.morningstar.com.

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