(PUB) Investing 2016

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23 Morningstar FundInvestor January 2016
Data through December 31, 2015 FINRA members: For internal or institutional use only.
Third Avenue Real Estate Value Instl Ticker
TAREX
Yield
0.7%
Total Assets
$2,836 mil
Mstar Category
Global Real Estate
Benchmark 1: S&P Global REIT TR USD
Benchmark 2: MSCI ACWI NR USD
Morningstar Analyst Rating 12-18-15
„
Morningstar Pillars
Process ∞ Positive
Performance ∞ Positive
People ∞ Positive
Parent § Negative
Price ¶ 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 „ ´ ‰ Á
Pillar Spectrum
∞ Positive § Negative ¶ Neutral
10.0
15.0
20.0
Historical Profile
Return
Risk
Rating
High
Low
QQQQQ
Highest
5 5 5 5 5 5 5 5 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 12-15 History
29.36 34.64 27.83 14.95 20.46 23.16 20.30 25.37 28.82 31.47 28.73 NAV
14.37 30.14 -8.33 -44.70 38.67 17.76 -12.35 36.24 16.42 13.12 -3.65 Total Return %
3.96 -8.65 2.80 0.34 4.98 -5.68 -14.05 12.51 13.62 -9.68 -4.24 +/- Bmark 1
3.54 9.18 -19.99 -2.50 4.04 5.09 -5.00 20.11 -6.38 8.96 -1.29 +/- Bmark 2
1.65 3.04 1.72 1.53 1.74 4.51 0.00 4.40 1.20 1.76 0.67 Income Return %
12.72 27.09 -10.05 -46.23 36.93 13.25 -12.35 31.84 15.23 11.36 -4.32 Capital Return %
29 82 18 28 19 43 67 26 1 64 88 Total Rtn % Rank Cat
0.44 0.89 0.60 0.43 0.26 0.92 0.00 0.89 0.30 0.51 0.21 Income $
1.03 2.63 3.25 0.00 0.00 0.00 0.00 1.38 0.40 0.63 1.40 Capital Gains $
1.14 1.11 1.10 1.12 1.18 1.18 1.15 1.09 1.09 1.09 1.10 Expense Ratio %
1.15 0.80 1.14 1.22 4.00 2.09 0.26 0.96 0.65 1.82 0.13 Income Ratio %
13 10 19 34 24 26 32 4 13 14 17 Turnover Rate %
2,910 3,262 2,443 1,093 1,476 1,719 1,409 1,691 2,013 2,904 2,451 Net Assets $mil
Performance 12-31-15
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2011 2.63 1.94 -20.97 6.01 -12.35
2012 18.13 0.63 9.12 5.04 36.24
2013 4.26 1.70 5.72 3.85 16.42
2014 5.69 4.53 -2.29 4.80 13.12
2015 3.05 -1.48 -6.29 1.27 -3.65
Trailing Total
Return%
+/- Bmark
1
+/- Bmark
2
%Rank
Cat
Growth of
$10,000
3 Mo 1.27 -3.90 -3.76 83 10,127
6 Mo -5.10 -9.98 -0.20 87 9,490
1 Yr -3.65 -4.24 -1.29 88 9,635
3 Yr Avg 8.26 -0.03 0.57 1 12,689
5 Yr Avg 8.67 -1.16 2.58 4 15,153
10 Yr Avg 5.02 -0.96 0.27 19 16,325
15 Yr Avg 9.77 -0.73 0.87 16 40,483
Tax Analysis Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated) 6.98 1 1.18 35
5 Yr (estimated) 7.45 3 1.12 33
10 Yr (estimated) 3.69 7 1.27 33
Potential Capital Gain Exposure: 14% of assets
Rating and Risk
Time
Period
Load-Adj
Return %
Morningstar
Rtn vs Cat
Morningstar
Risk vs Cat
Morningstar
Risk-Adj Rating
1 Yr -3.65
3 Yr 8.26 High Low QQQQQ
5 Yr 8.67 High Low QQQQQ
10 Yr 5.02 +Avg -Avg QQQQ
Incept 10.91
Other Measures Standard Index Best Fit Index
Alpha 2.8 1.6
Beta 0.69 1.44
R-Squared 73 79
Standard Deviation 8.85
Mean 8.26
Sharpe Ratio 0.94
Portfolio Analysis 07-31-15
Total Stocks: 40
Share change since 04-30-15 Sector Country % Assets
TWeyerhaeuser Co Basic Mat United States 4.82
TForest City Enterprises I Real Est United States 4.30
TFirst Industrial Realty T Real Est United States 3.65
TMacerich Co Real Est United States 3.60
TRayonier Inc Basic Mat United States 3.40
TWestfield Corp Real Est Australia 3.38
Newhall Holding Co Llc Cl — — 3.08
TVornado Realty Trust Real Est United States 2.96
Hammerson PLC Real Est United Kingdom 2.85
Inmobiliaria Colonial SA Real Est Spain 2.83
TCity Developments Ltd Cnsmr Cyc Singapore 2.79
YHenderson Land Developmen Real Est Hong Kong 2.62
Equity Commonwealth Real Est United States 2.54
Zions Bancorp Finan Svcs United States 2.42
Lowe's Companies Inc Cnsmr Cyc United States 2.35
Brookfield Asset Manageme Real Est Canada 2.26
YCK Hutchison Holdings Ltd Real Est Hong Kong 2.13
TWereldhave NV Real Est Netherlands 2.07
Realogy Holdings Corp Real Est United States 2.02
Post Properties Inc Real Est United States 2.00
Current Investment Style
Large Mid Small
Value Blend Growth Market Cap %
Giant 11.3
Large 24.8
Mid 40.0
Small 23.1
Micro 0.8
Avg $mil:
7,033
Value Measures Rel Category
Price/Earnings 19.49 0.94
Price/Book 1.41 0.96
Price/Sales 2.94 0.57
Price/Cash Flow 10.66 0.74
Dividend Yield % 2.73 0.73
Growth Measures % Rel Category
Long-Term Erngs 8.90 1.28
Book Value -1.45 -0.37
Sales -7.34 -7.92
Cash Flow 2.61 0.22
Historical Erngs 13.23 1.37
Composition - Net
Cash 14.9 Bonds 0.0
Stocks 83.5 Other 1.5
Foreign (% of Stock) 47.8
Sector
Weightings
% of
Stocks
Rel
Bmark 1
h Cyclical 97.84 -0.05
r BasicMat 10.21 —
t CnsmrCyc 9.33 116.63
y FinanSvcs 6.08 —
u Real Est 72.22 0.73
j Sensitive 0.00 0.00
i CommSrvs 0.00 —
o Energy 0.00 —
p Industrl 0.00 0.00
a Technlgy 0.00 —
k Defensive 2.16 —
s CnsmrDef 0.00 —
d Hlthcare 2.16 —
f Utilities 0.00 —
Regional Exposure % Stock
UK/W. Europe 19 N. America 55
Japan 0 Latn America 0
Asia X Japan 26 Other 1
Country Exposure % Stock
United States 52
Hong Kong 14
UK 11
Australia 7
Singapore 5
Morningstar's Take by Leo Acheson 12-18-15
Third Avenue Real Estate Value remains a strong choice,
but Morningstar has downgraded its Analyst Rating to
Silver because of instability at its parent. On Dec. 10,
2015, Third Avenue shuttered a different fund, Third
Avenue Focused Credit, because it held highly illiquid
securities and was unable to meet redemption requests
without selling its bonds at fire-sale prices. The firm will
make distributions to investors during the next year or so
as assets are sold at what management deems fairer
prices. Running the open-end fund in the manner that put
it in that situation raises concerns about the firm's
oversight.
Third Avenue subsequently announced it had parted
ways with CEO David Barse. An existing management
committee of five people has taken over management of
the firm.
The Focused Credit fund fiasco represents a major
governance failure and has materially damaged Third
Avenue's reputation. Moreover, the firm has experienced
generally weak results and suffered significant
investment-team turnover, with 15 team members
leaving since early 2013. (The investment team stands at
22 today.) In the near term, outflows will likely pick up
and additional turnover would not be surprising.
Everything considered, Morningstar has downgraded
Third Avenue's Parent rating to Negative.
That said, this fund has mostly escaped the firm's
troubles. It's had a remarkably stable team: Mike Winer
has led the charge since the fund's 1998 inception, and
comanagers Jason Wolf and Ryan Dobratz have worked
on the fund for about a decade. The group has executed
the fund's unique strategy with great success,
outperforming at least 90% of competitors over the
trailing three-, five-, and 10-year periods through
November 2015.
Still, given the recent turmoil at Third Avenue,
investors should closely monitor this fund's flows and the
potential impact on the portfolio. The fund holds primarily
liquid stocks, and Winer confirmed that he could readily
meet significant investor redemptions, alleviating
concerns. Overall, this remains a great fund, though
parent concerns warrant caution.
Address: Third Avenue Trust Minimum Purchase: $100000 Add: $1000IRA: $100000
New York NY 10017 Min Auto Inv Plan: $100000 Add: $200
800-443-1021 Sales Fees: No-load, 1.00%R
Web Address: Management Fee: 0.90%
Inception: 09-17-98 Actual Fees: Mgt:0.90% Dist:—
Advisor: Third Avenue Management LLC Expense Projections: 3Yr:$346 5Yr:$601 10Yr:$1329
Subadvisor: None Income Distribution: Annually
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