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23 Morningstar FundInvestor October 2016
Data through September 30, 2016 FINRA members: For internal or institutional use only.
Hotchkis & Wiley Mid-Cap Value A Ticker
HWMAX
Yield
0.1%
Total Assets
$2,051 mil
Mstar Category
Mid-Cap Value
Benchmark 1: Russell Mid Cap 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
Average
High
QQ
Below Avg
2 2 2 2 2 2 2 2 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 09-16 History
29.67 20.37 11.49 17.79 23.80 21.70 28.31 40.17 40.60 30.90 33.30 NAV
16.34 -17.19 -43.16 56.03 34.04 -8.82 30.77 42.20 11.90 -12.75 7.77 Total Return %
-3.87 -15.76 -4.71 21.82 9.29 -7.44 12.26 8.75 -2.85 -7.97 -5.95 +/- Bmark 1
0.55 -22.68 -6.16 29.57 18.98 -10.94 14.76 9.82 -1.79 -14.13 -0.07 +/- Bmark 2
0.00 0.33 0.24 1.19 0.25 0.00 0.30 0.30 0.36 0.09 0.00 Income Return %
16.34 -17.52 -43.40 54.84 33.79 -8.82 30.47 41.91 11.53 -12.84 7.77 Capital Return %
41 99 90 3 1 92 2 8 26 94 79 Total Rtn % Rank Cat
0.00 0.10 0.05 0.14 0.04 0.00 0.07 0.08 0.15 0.04 0.00 Income $
3.02 4.16 0.04 0.00 0.00 0.00 0.00 0.00 3.97 4.43 0.00 Capital Gains $
1.27 1.26 1.28 1.40 1.35 1.33 1.35 1.32 1.26 1.25 1.27 Expense Ratio %
0.16 0.19 0.38 0.67 0.03 -0.06 0.28 0.32 0.29 0.10 0.48 Income Ratio %
55 45 51 85 67 62 72 66 55 54 42 Turnover Rate %
1,183 628 242 244 255 175 224 662 756 406 313 Net Assets $mil
Performance 09-30-16
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2012 22.72 -3.30 4.62 5.33 30.77
2013 17.31 5.33 8.15 6.42 42.20
2014 5.35 5.39 -3.74 4.70 11.90
2015 0.22 -1.92 -11.30 0.07 -12.75
2016 1.23 -3.68 10.52 — —
Trailing Total
Return%
+/- Bmark
1
+/- Bmark
2
%Rank
Cat
Growth of
$10,000
3 Mo 10.52 6.07 6.67 2 11,052
6 Mo 6.46 -2.97 0.06 69 10,646
1 Yr 7.84 -9.42 -7.59 91 10,784
3 Yr Avg 3.84 -6.65 -7.32 90 11,197
5 Yr Avg 18.59 1.21 2.22 2 23,457
10 Yr Avg 6.60 -1.29 -0.64 57 18,949
15 Yr Avg 10.79 0.07 3.64 17 46,534
Tax Analysis Tax Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated) -0.09 94 2.04 50
5 Yr (estimated) 15.86 9 1.24 42
10 Yr (estimated) 4.79 77 1.17 51
Potential Capital Gain Exposure: -10% of assets
Rating and Risk
Time
Period
Load-Adj
Return %
Morningstar
Rtn vs Cat
Morningstar
Risk vs Cat
Morningstar
Risk-Adj Rating
1 Yr 2.18
3 Yr 1.99 Low High Q
5 Yr 17.32 High High QQQQ
10 Yr 6.03 -Avg High Q
Incept 9.87
Other Measures Standard Index Best Fit Index
Alpha -8.3 -9.2
Beta 1.18 1.24
R-Squared 69 79
Standard Deviation 15.37
Mean 3.84
Sharpe Ratio 0.31
Portfolio Analysis 08-31-16
Total Stocks: 58
Share change since 07-31-16 Sector YTD Ret % % Assets
YPopular Inc Finan Svcs — 4.74
YARRIS International PLC Technology -7.33 4.49
YRegions Financial Corp Finan Svcs 4.79 3.70
YCitizens Financial Group Finan Svcs -4.35 3.47
YCorning Inc Technology 31.59 3.47
TNRG Energy Inc Utilities -3.02 3.47
YKosmos Energy Ltd Energy — 3.36
TCalpine Corp Utilities -12.65 3.29
TOffice Depot Inc Cnsmr Cyc -36.26 3.25
YGoodyear Tire & Rubber Co Cnsmr Cyc -0.49 3.14
YCairn Energy PLC Energy — 2.86
YNavistar International Co Industrl 158.94 2.81
YOphir Energy PLC Energy — 2.75
YWillis Towers Watson PLC Finan Svcs 4.31 2.70
YRoyal Mail PLC Industrl — 2.69
YBed Bath & Beyond Inc Cnsmr Cyc -10.13 2.54
TWhiting Petroleum Corp Energy -7.42 2.33
YCIT Group Inc Finan Svcs -7.43 2.30
YBrown & Brown Inc Finan Svcs 18.62 2.24
YCDW Corp Technology 9.54 2.19
Current Investment Style
Large Mid Small
Value Blend Growth Market Cap %
Giant 0.0
Large 14.9
Mid 59.4
Small 19.1
Micro 6.6
Avg $mil:
5,214
Value Measures Rel Category
Price/Earnings 13.15 0.77
Price/Book 0.92 0.51
Price/Sales 0.59 0.50
Price/Cash Flow 4.32 0.62
Dividend Yield % 1.99 0.83
Growth Measures % Rel Category
Long-Term Erngs 9.62 1.07
Book Value -0.25 -0.14
Sales -4.93 -6.13
Cash Flow -15.46 -5.65
Historical Erngs -21.54 -6.69
Profitability %
Return on Equity 3.74
Return on Assets -0.87
Net Margin 2.27
Sector
Weightings
% of
Stocks
Rel
Bmark 1
h Cyclical 45.84 0.94
r BasicMat 0.00 0.00
t CnsmrCyc 17.65 1.64
y FinanSvcs 27.21 1.66
u Real Est 0.98 0.06
j Sensitive 45.48 1.43
i CommSrvs 0.00 0.00
o Energy 17.07 1.63
p Industrl 8.69 0.80
a Technlgy 19.72 2.24
k Defensive 8.67 0.44
s CnsmrDef 1.65 0.47
d Hlthcare 0.20 0.04
f Utilities 6.82 0.60
Composition - Net
Cash 1.0
Stocks 99.0
Bonds 0.0
Other 0.0
Foreign 20.8
(% of Stock)
Morningstar's Take by Katie Rushkewicz Reichart, CFA 08-01-16
Hotchkis & Wiley Mid-Cap Value doesn't look good at
every turn, but over time it can reward investors who hold
on. Despite above-average fees, the fund's consistent
investment process and stable and experienced team
help it earn a Morningstar Analyst Rating of Bronze.
Three managers have led the fund since its 1997
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 the Russell Mid Cap
Value Index. The portfolio is indeed cheaper than the
benchmarkon traditionalvaluationmetrics,suchasprice/
earnings and price/book.
Sector weightings can vary greatly depending on
opportunities. The fund gravitated to the beat-up energy
sector in 2015 as oil prices slid. The sector overall has
weighed on results during the trailing three years through
June, a period when the fund landed in the bottom decile
of the mid-value Morningstar Category. Despite the
sector's rebound in 2016, the fund hasn't seen as big of
a bounce, as some of its picks have been slower to
recover.Meanwhile,otherpickshaveweighedon results,
including Office Depot ODP, whose merger was blocked.
Adhering to the process, the managers added to the
name when it was down.
The fund's fondness for out-of-favor companies and
sectors leads to boom-or-bust returns. It underperformed
during the 2007-09 financial crisis and posted bottom-
decile showings in 2011 and 2015. But when the market
turns in its favor, it produces: the fund landed near the
top of the category in 2009, 2010, 2012, and 2013.
With a process that leads to volatile returns, the fund
is not for all investors. It won't help those who can't hang
on during stretches of underperformance, as indicated by
its poor dollar-weighted returns. Investors with a high risk
tolerance can make out better: since inception, which
encompasses two bear markets, the fund has topped the
benchmark and the category.
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% mx./0.60% mn.
Inception: 01-02-01 Actual Fees: Mgt:0.75% Dist:0.25%
Advisor: Hotchkis & Wiley Capital Management LLC Expense Projections: 3Yr:$907 5Yr:$1185 10Yr:$1978
Subadvisor: None Income Distribution: Annually
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