(PUB) Investing 2016

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23 Morningstar FundInvestor September 2016
Data through August 31, 2016 FINRA members: For internal or institutional use only.
Hotchkis & Wiley Value Opps A Ticker
HWAAX
Yield
1.5%
Total Assets
$466 mil
Mstar Category
Large Value
Benchmark 1: Russell 1000 Value TR USD
Benchmark 2: S&P 500 TR USD
Morningstar Analyst Rating 08-01-16
´
Morningstar Pillars
Process ∞ Positive
Performance ∞ Positive
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
15.0
20.0
5.0
Historical Profile
Return
Risk
Rating
Above Avg
High
QQQ
Neutral
2 2 2 2 1 1 1 1 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
19.91 15.73 9.02 14.67 19.54 17.62 21.49 27.63 27.77 22.87 24.21 NAV
8.26 -11.52 -42.24 65.48 34.54 -7.33 29.26 37.42 9.80 -3.58 5.86 Total Return %
-13.99 -11.35 -5.39 45.79 19.03 -7.72 11.75 4.89 -3.66 0.24 -4.37 +/- Bmark 1
-7.53 -17.02 -5.24 39.01 19.47 -9.45 13.25 5.03 -3.89 -4.97 -1.96 +/- Bmark 2
0.05 0.12 0.41 2.81 1.28 0.43 1.85 0.83 1.29 1.51 0.00 Income Return %
8.21 -11.64 -42.65 62.67 33.25 -7.76 27.41 36.59 8.50 -5.10 5.86 Capital Return %
99 96 84 2 1 83 3 28 48 48 79 Total Rtn % Rank Cat
0.01 0.02 0.06 0.25 0.19 0.08 0.33 0.18 0.36 0.42 0.00 Income $
1.70 1.89 0.00 0.00 0.00 0.39 0.94 1.61 2.09 3.44 0.00 Capital Gains $
1.22 1.23 1.31 1.44 1.40 1.36 1.35 1.28 1.20 1.21 1.25 Expense Ratio %
0.83 -0.14 0.36 1.60 0.87 0.58 1.45 1.22 1.24 1.19 2.55 Income Ratio %
73 53 119 210 166 137 123 98 45 101 62 Turnover Rate %
72 33 10 18 21 25 49 142 187 172 131 Net Assets $mil
Performance 08-31-16
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2012 19.01 -2.43 5.23 5.78 29.26
2013 13.59 4.38 3.96 11.48 37.42
2014 3.08 4.92 -1.04 2.59 9.80
2015 1.12 3.70 -8.79 0.81 -3.58
2016 -2.40 -0.49 — — —
Trailing Total
Return%
+/- Bmark
1
+/- Bmark
2
%Rank
Cat
Growth of
$10,000
3 Mo 6.84 2.25 2.74 4 10,684
6 Mo 20.27 4.01 6.67 3 12,027
1 Yr 3.90 -9.02 -8.65 92 10,390
3 Yr Avg 8.84 -1.85 -3.47 52 12,892
5 Yr Avg 14.12 -0.27 -0.56 13 19,357
10 Yr Avg 8.97 2.89 1.46 2 23,617
15 Yr Avg — — — — —
Tax Analysis Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated) 3.50 88 3.18 88
5 Yr (estimated) 10.23 64 2.36 89
10 Yr (estimated) 6.59 5 1.66 87
Potential Capital Gain Exposure: -8% of assets
Rating and Risk
Time
Period
Load-Adj
Return %
Morningstar
Rtn vs Cat
Morningstar
Risk vs Cat
Morningstar
Risk-Adj Rating
1 Yr -1.56
3 Yr 6.90 -Avg High QQ
5 Yr 12.90 Avg High QQQ
10 Yr 8.39 High High QQQQ
Incept 11.67
Other Measures Standard Index Best Fit Index
Alpha -3.5 0.7
Beta 1.05 1.10
R-Squared 74 79
Standard Deviation 13.36
Mean 8.84
Sharpe Ratio 0.69
Portfolio Analysis 06-30-16
Total Stocks: 42
Share change since 05-31-16 Sector YTD Ret % % Assets
Bank of America Corporati Finan Svcs -3.06 5.67
Corning Inc Technology 26.34 5.42
YMicrosoft Corp Technology 5.52 5.19
American International Gr Finan Svcs -2.42 4.97
Goldman Sachs Group Inc Finan Svcs -4.89 4.24
Danieli & C. Officine Mec Industrl — 4.13
YRush Enterprises Inc A Cnsmr Cyc 8.63 4.02
Oracle Corp Technology 14.07 3.42
WorleyParsons Ltd Energy — 3.42
YZurich Insurance Group AG Finan Svcs — 3.17
Citigroup Inc Finan Svcs -7.25 3.12
Office Depot Inc Cnsmr Cyc -34.31 2.99
TARRIS International PLC Technology -8.18 2.84
TDiscovery Communications Cnsmr Cyc -4.39 2.82
THewlett Packard Enterpris Technology — 2.71
YJPMorgan Chase & Co Finan Svcs 4.29 2.60
YRoyal Mail PLC Industrl — 2.45
Motors Liquidation Co GUC Industrl -31.27 2.15
KSB AG Pfd Shs - Non-voti Industrl — 2.08
Intrawest Resorts Holding Cnsmr Cyc — 1.92
Current Investment Style
Large Mid Small
Value Blend Growth Market Cap %
Giant 30.6
Large 27.9
Mid 15.7
Small 12.0
Micro 13.8
Avg $mil:
14,404
Value Measures Rel Category
Price/Earnings 12.87 0.79
Price/Book 0.94 0.48
Price/Sales 0.57 0.39
Price/Cash Flow 7.75 0.96
Dividend Yield % 2.34 0.79
Growth Measures % Rel Category
Long-Term Erngs 13.69 1.75
Book Value 4.36 2.64
Sales 1.49 -0.99
Cash Flow -22.29 9.31
Historical Erngs -7.27 -2.25
Profitability %
Return on Equity 5.17
Return on Assets 3.21
Net Margin 10.17
Sector
Weightings
% of
Stocks
Rel
Bmark 1
h Cyclical 48.81 1.36
r BasicMat 0.56 0.20
t CnsmrCyc 14.18 3.13
y FinanSvcs 34.06 1.45
u Real Est 0.01 0.00
j Sensitive 46.63 1.25
i CommSrvs 0.00 0.00
o Energy 6.97 0.54
p Industrl 14.56 1.47
a Technlgy 25.10 2.45
k Defensive 4.55 0.17
s CnsmrDef 0.02 0.00
d Hlthcare 4.53 0.41
f Utilities 0.00 0.00
Composition - Net
Cash 1.1
Stocks 86.1
Bonds 11.0
Other 1.8
Foreign 24.2
(% of Stock)
Morningstar's Take by Katie Rushkewicz Reichart, CFA 08-01-16
Hot and cold stretches are inevitable at Hotchkis & Wiley
Value Opportunities, but investors who hold on can be
rewarded over time. Despite above-average fees, the
fund'sconsistent investmentprocess, flexiblenature,and
stable and experienced team help it receive a
Morningstar Analyst Rating of Bronze.
Two managers have led the fund since its late 2002
inception, and there's been little turnover on the broader
investment team that contributes to all the firm's
offerings. The fund has long followed a contrarian, value-
oriented process that, for better and worse, goes its own
way rather than closely adhering to a benchmark.
The fund invests across the capital structure and
market-cap spectrum, with valuations driving asset-
allocation and sector decisions. The fund has primarily
owned equities, but its 11% bond stake as of May 2016
was the highest it's been, given opportunities the
managers have found in distressed industrials and energy
credits over the past year. At times, the fund has held no
bonds. Meanwhile, the fund has favored large-cap
equities in recent years due to valuations, coinciding with
a move to the large-value Morningstar Category from
mid-value in 2015. However, the fund's flexibility
regardingmarket-cap range isaplus,as the firmhasbeen
especially strong in small- and mid-cap stocks.
The fund's fondness for out-of-favor companies and
sectors and its value leanings lead to boom-or-bust
returns. It's lost more than mid-value and large-value
peers in down markets since inception. The fund thrives
in more robust markets, such as 2009, 2010, and 2012.
However, its tendency to take fairly big stakes in top
holdings (occasionally in the low double digits) can
present company-level risk.
With a process that leads to volatile returns, the fund
is not for all investors, as indicated by the gap between
its totalanddollar-weighted returns. Investorswithahigh
risk tolerance can make out better in the long run: Since
inception, the fund has posted category- and benchmark-
beating results.
Address: Hotchkis & Wiley Funds Minimum Purchase: $2500 Add: $100 IRA: $1000
Los Angeles CA 90017-5439 Min Auto Inv Plan: $2500 Add: $100
866-493-8637 Sales Fees: 5.25%L
Web Address: Management Fee: 0.75%
Inception: 12-31-02 Actual Fees: Mgt:0.75% Dist:0.25%
Advisor: Hotchkis & Wiley Capital Management LLC Expense Projections: 3Yr:$901 5Yr:$1175 10Yr:$1957
Subadvisor: None Income Distribution: Annually
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