(PUB) Investing 2016

391 / 708

5 Morningstar FundInvestor September 2016
Data through August 31, 2016 FINRA members: For internal or institutional use only.
Litman Gregory Masters Intl Instl Ticker
MSILX
Yield
1.8%
Total Assets
$871 mil
Mstar Category
Foreign Large Blend
Benchmark 1: MSCI ACWI Ex USA NR USD
Benchmark 2: MSCI ACWI Ex USA NR USD
Morningstar Analyst Rating 08-18-16
´
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
12.0
14.0
16.0
8.0
Historical Profile
Return
Risk
Rating
Average
Above Avg
QQ
Below Avg
4 4 4 7 7 7 4 4 Investment Style
Equity
Growth of $10,000
Investment Values of
Fund
Investment Values of
Benchmark 1
( & ( & & ) & * & ) ) Performance Quartile
(within Category)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 08-16 History
18.74 18.68 9.47 13.05 15.05 12.58 15.02 18.06 17.36 16.13 15.25 NAV
23.61 20.75 -45.47 38.54 15.86 -16.24 19.96 21.47 -2.72 -5.52 -5.46 Total Return %
-3.04 4.10 0.05 -2.91 4.70 -2.53 3.13 6.18 1.15 0.14 -9.99 +/- Bmark 1
-3.04 4.10 0.05 -2.91 4.70 -2.53 3.13 6.18 1.15 0.14 -9.99 +/- Bmark 2
2.34 1.09 2.08 0.74 0.53 0.17 0.56 1.22 1.17 1.56 0.00 Income Return %
21.27 19.66 -47.56 37.80 15.33 -16.41 19.40 20.25 -3.89 -7.08 -5.46 Capital Return %
66 7 66 17 7 82 23 30 19 86 98 Total Rtn % Rank Cat
0.41 0.20 0.39 0.07 0.07 0.03 0.07 0.18 0.21 0.27 0.00 Income $
2.38 3.87 0.37 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Capital Gains $
1.21 1.19 1.22 1.27 1.28 1.26 1.30 1.30 1.24 1.24 0.99 Expense Ratio %
1.68 0.88 2.19 0.53 0.51 0.73 1.05 1.02 0.94 1.22 2.39 Income Ratio %
98 93 114 104 99 127 107 112 70 52 . Turnover Rate %
1,725 2,069 896 1,241 1,449 1,218 1,176 1,328 1,176 1,024 740 Net Assets $mil
Performance 08-31-16
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2012 13.28 -10.39 8.69 8.72 19.96
2013 5.46 -0.63 11.12 4.31 21.47
2014 -0.33 4.67 -6.69 -0.06 -2.72
2015 5.47 0.87 -11.80 0.69 -5.52
2016 -3.97 -6.52 — — —
Trailing Total
Return%
+/- Bmark
1
+/- Bmark
2
%Rank
Cat
Growth of
$10,000
3 Mo -1.04 -5.03 -5.03 94 9,896
6 Mo 4.45 -9.01 -9.01 98 10,445
1 Yr -8.94 -11.86 -11.86 99 9,106
3 Yr Avg -1.10 -3.13 -3.13 95 9,673
5 Yr Avg 2.76 -0.55 -0.55 84 11,459
10 Yr Avg 2.29 0.25 0.25 29 12,541
15 Yr Avg 5.90 0.22 0.22 18 23,642
Tax Analysis Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated) -1.55 91 0.45 22
5 Yr (estimated) 2.44 73 0.31 10
10 Yr (estimated) 1.12 28 1.14 73
Potential Capital Gain Exposure: -19% of assets
Rating and Risk
Time
Period
Load-Adj
Return %
Morningstar
Rtn vs Cat
Morningstar
Risk vs Cat
Morningstar
Risk-Adj Rating
1 Yr -8.94
3 Yr -1.10 Low +Avg Q
5 Yr 2.76 -Avg High QQ
10 Yr 2.29 +Avg Avg QQQ
Incept 6.93
Other Measures Standard Index Best Fit Index
Alpha -2.9 -3.4
Beta 0.92 0.95
R-Squared 86 91
Standard Deviation 13.17
Mean -1.10
Sharpe Ratio -0.03
Portfolio Analysis 06-30-16
Total Stocks: 47
Share change since 03-31-16 Sector Country % Assets
YShire PLC Hlth Care United Kingdom 4.71
YSampo Oyj A Finan Svcs Finland 4.19
YDon Quijote Holdings Co L Cnsmr Def Japan 4.00
YLloyds Banking Group PLC Finan Svcs United Kingdom 3.68
YCarlsberg A/S B Cnsmr Def Denmark 3.51
YDiageo PLC Cnsmr Def United Kingdom 3.15
YAena SA Industrl Spain 3.13
Altice NV A Comm Svcs France 3.13
YLas Vegas Sands Corp Cnsmr Cyc United States 3.03
TFerrovial SA Industrl Spain 2.94
YValeo SA Cnsmr Cyc France 2.93
YEssilor International SA Hlth Care France 2.76
YHonda Motor Co Ltd Cnsmr Cyc Japan 2.76
YBaidu Inc ADR Technology China 2.61
YCredit Suisse Group AG Finan Svcs Switzerland 2.54
YInforma PLC Cnsmr Cyc United Kingdom 2.51
YLiberty Global PLC C Comm Svcs United Kingdom 2.46
YBNP Paribas Finan Svcs France 2.40
YRoche Holding AG Dividend Hlth Care Switzerland 2.40
YCNH Industrial NV Industrl United Kingdom 2.37
Current Investment Style
Large Mid Small
Value Blend Growth Market Cap %
Giant 42.9
Large 50.5
Mid 6.6
Small 0.0
Micro 0.0
Avg $mil:
26,892
Value Measures Rel Category
Price/Earnings 16.08 1.04
Price/Book 1.53 0.95
Price/Sales 1.06 0.94
Price/Cash Flow 3.79 0.65
Dividend Yield % 3.08 0.93
Growth Measures % Rel Category
Long-Term Erngs 8.93 0.95
Book Value 4.59 1.20
Sales 2.13 -1.43
Cash Flow 17.86 3.33
Historical Erngs 0.05 -0.02
Composition - Net
Cash 0.2 Bonds 0.0
Stocks 99.8 Other 0.0
Foreign (% of Stock) 92.6
Sector
Weightings
% of
Stocks
Rel
Bmark 1
h Cyclical 42.14 0.95
r BasicMat 2.06 0.26
t CnsmrCyc 21.68 1.92
y FinanSvcs 18.40 0.86
u Real Est 0.00 0.00
j Sensitive 30.34 0.93
i CommSrvs 9.74 1.85
o Energy 1.85 0.29
p Industrl 12.29 1.14
a Technlgy 6.46 0.63
k Defensive 27.52 1.20
s CnsmrDef 13.70 1.23
d Hlthcare 13.82 1.61
f Utilities 0.00 0.00
Regional Exposure % Stock
UK/W. Europe 74 N. America 7
Japan 11 Latn America 1
Asia X Japan 7 Other 0
Country Exposure % Stock
UK 26
France 16
Japan 11
United States 7
Switzerland 7
Morningstar's Take by Gregg Wolper 08-18-16
Although Litman Gregory Masters Select International
has question marks, its impressive lineup of subadvisors,
thoughtful approach, and respectable parent earn it a
Morningstar Analyst Rating of Bronze.
This fund has an unusual structure. Unlike the typical
multimanager offering, subadvisors are limited to just
eight to 15 holdings apiece. Moreover, the subadvisors
are not chosen with traditional diversification in mind,
such as filling specific spots in the Morningstar Style Box.
Rather, the overseers at Litman Gregory look for topnotch
managers who they believe have proven effective at
managing very focused portfolios and who relish taking
on that challenge.
This process has yielded impressive results over the
long term. During the 10-year period through July 31,
2016, the fund lands in the 30th percentile of the foreign
large-blendMorningstarCategory,andduring the15-year
period, it’s in the 20th percentile.
Two elements need further examination, however.
First, the current manager lineup can't claim that long-
term record. While David Herro of Harris Associates has
been on board since the fund’s 1997 inception and a trio
from Northern Cross since 2007, others have come and
gone through the years. Of the other three current
subadvisors, Thornburg’s Vinson Walden arrived on this
fund in 2008, Lazard's Mark Little in 2013, and Pictet
Asset Management's duo in mid-2016. Second,
performance during the past 12 months or so has been
awful.The fund lost16.7% for the12months throughJuly
31, 2016, 10 percentage points worse than the category
average. The main culprits have been European financial
firmsownedbyseveralsubadvisors (includingHerro,who
remains confident in his picks) and Valeant
Pharmaceuticals VRX.
Painful as such losses are, managers with strong
convictions will suffer setbacks at times. That said, while
the fund's current lineup is strong, and its concept has
merit, its recent stumble shows the risk of focused
portfolios chosen by unconventional managers, and the
current lineup doesn't have a long record altogether.
Address: Masters Select Funds Trust Minimum Purchase: $100000 Add: $250 IRA: $5000
Glendora CA 91741 Min Auto Inv Plan: $2500 Add: $250
800-960-0188 Sales Fees: No-load
Web Address: Management Fee: 1.10% mx./1.00% mn.
Inception: 12-01-97 Actual Fees: Mgt:1.07% Dist:—
Advisor: Litman Gregory Fund Advisors LLC Expense Projections: 3Yr:$369 5Yr:$657 10Yr:$1478
Subadvisor: Lazard Asset Management LLC Income Distribution: Annually
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