Heartland International Value Fund

  • Overview
  • Materials
  • Portfolio Management Team
  • Performance
  • Commentary
  • Portfolio Composition
  • Risk Analysis
  • Distributions

HINVX

Overview

Investment Focus

Seeks long-term capital appreciation by investing in small- and mid-cap international companies, with an emphasis on dividends

Distinguishing Characteristics

  • Invests in dividend paying stocks with a market capitalization of less than $5 billion with no more than 35% of assets held in any one country
  • Designed for investors who seek a portfolio of small- to medium-sized international companies
  • Benchmarked to the Russell Global® ex-US Small Cap Index
  • Typically aims to hold 40-60 stocks
  • Inception date: 2010

Investment Process

All stocks are evaluated based on our proprietary, consistent, and time-tested 10 Principles of Value Investing™. These criteria are central to Heartland’s value investing philosophy and provide a framework for evaluating securities.

The Investment Team applies a bottom-up research approach, combining traditional fundamental analysis and meetings with more than 1,000 company management teams in a typical year. The 10 Principles™ are designed to help the Team assess a company's valuation, but also focus on metrics associated with financial soundness, management team strength, and future outlook.

Learn more about our process

  • Basics
  • Minimums
  • Fees
  • Expenses

12/31/2016

Benchmark: Russell Global® ex-US Small Cap Index

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Investor Class
Ticker HINVX
CUSIP 422352823
Inception Date 10/01/2010
Assets $23 million

Investor Class ($)
Initial Investment1,000
IRA Initial Investment500
Subsequent Investments100

Shareholder Fees

Paid directly from total investment


Investor Class (%)
Load0
Sales Charge0
Exchange Fee0
Redemption Fee*2

*If shares are redeemed or exchanged within 90 days of purchase

Annual Fund Operating Expenses

Paid annually as a percentage of total investment value*

  Investor Class (%)
Management Fee 0.85
12b-1 Distribution Fee 0.25
Other Expenses 0.66
Total Annual Fund Operating Expenses 1.76
Fee Waiver and/or Expense Reimbursement -0.27
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement 1.49

*As stated in the prospectus (pdf) dated 5/1/2016

Overall Morningstar Rating™ in Foreign Small/Mid Value Category

2Overall Morningstar Rating™ as of 1/31/2017, out of 53 Foreign Small/Mid Value funds, based on risk-adjusted performance for investor class shares

Portfolio Management Team

Heartland International Value Fund Portfolio Management Team

46 years of industry experience
10 years of experience at Heartland

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Michael Jolin

Jolin, CFA, is Vice President and Portfolio Manager for the Heartland International Value Fund. He has 13 years of industry experience, 7 at Heartland.

Robert C. Sharpe

Sharpe is Vice President and Portfolio Manager of the International Value Fund. He has 33 years of industry experience, 3 at Heartland.

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Investing Perspectives

Water & Wells
1/24/17
Heartland Advisors International Value Investing Portfolio Manager Michael Jolin

Value: No Translation Needed

A look at what normalized price-to-earnings ratios are telling us about valuations overseas.

PM Perspective
9/16
Heartland Advisors Value Investing Portfolio Manager Robert Sharpe

Are Emerging Markets Just Getting Started?

Here’s what skeptics may be overlooking when it comes to the staying power of emerging markets.

White Paper
8/16
Heartland Advisors International Value Investing White Paper

The Role Dividends Can Play in International Equity Investing

Domestic equity investors have long understood the importance of dividends, but their value when investing globally is often overlooked. In this paper, we explore the return and risk profiles of small- and mid-cap international stocks based on their dividend yields.

Water & Wells
8/16/16
Heartland Advisors Value Investing Portfolio Manager Robert C. Sharpe

Japan: Far From Perfect

Economically sensitive stocks in Japan seem priced for a meltdown, but is the pessimism warranted?

PM Perspective
7/16
Heartland Advisors Value Investing Portfolio Manager Robert Sharpe

Japan: An Attractive Mix of Progress and Opportunity

Central bank policy, a tight labor market, and tax code changes could make for compelling opportunities in Japan.

Performance

Average Annual Total Returns
  • Month-End
  • Quarter-End
  • Annual
1/31/2017

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
International Value
Investor Class
2.45---5.170.5129.517.467.46
Russell Global® ex-US Small Cap4.64---6.242.5717.964.134.13
*Not annualized
12/31/2016

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
International Value
Investor Class
1.32---5.69-2.509.549.54-0.90
Russell Global® ex-US Small Cap4.03---7.220.575.045.04-3.61
*Not annualized

2016 (%)2015 (%)2014 (%)2013 (%)2012 (%)2011 (%)
International Value Investor Class9.54-12.09-3.7612.0526.97-22.37
Russell Global® ex-US Small Cap5.040.50-3.6317.2118.84-18.68
Growth of a Hypothetical $10,000 Investment

12/31/2016

Since inception of the investor class, 10/1/2010 to 12/31/2016
Chart represents a hypothetical example of an investment in the International Value Fund representing historical returns

Heartland International Value Fund Growth of 10000 Chart

Morningstar Rating™ in Foreign Small/Mid Value Category
Morningstar Ratings TM
1/31/2017
RatingTotal Funds
Overall253
10-Year--
5-Year237
3-Year253

Based on risk-adjusted performance

Past performance does not guarantee future results. Performance represents past performance; current returns may be lower or higher. Performance information for institutional class shares of Funds that existed prior to 5/1/2008, is based on the performance of investor class shares. The investment return and principal value will fluctuate so that an investor's shares, when redeemed may be worth more or less than the original cost. All returns reflect reinvested dividends and capital gains distributions, but do not reflect the deduction of taxes that an investor would pay on distributions or redemptions. Subject to certain exceptions, shares of a Fund redeemed or exchanged within 10 days (90 days for the International Value Fund) of purchase are subject to a 2% redemption fee. Performance does not reflect this fee, which if deducted would reduce an individual's return.

In the prospectus (pdf) dated 5/1/2016, the Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement for the International Value Fund is 1.49%. The Advisor has contractually agreed to waive its management fees and/or reimburse expenses of the Fund to ensure that Total Annual Fund Operating Expenses for the Fund do not exceed 1.49% of the Fund’s average net assets, through at least 5/1/2017, and subject thereafter to annual reapproval of the agreement by the Board of Directors. Without such waiver and/or reimbursements, the Total Annual Fund Operating Expenses would be 1.81%.

The inception date for the International Value Fund is 10/1/2010.

Performance data quoted for periods prior to 10/1/2013 for the International Value Fund is that of the predecessor Fund (the Heartland International Value Fund a series of Trust for Professional Managers), which commenced operations on 10/1/2010.

Due to the discontinuation of the Russell® Global ex-US Small Cap Value Index, the International Value Fund changed its benchmark to the Russell® Global ex-US Small Cap Index on 3/18/2016.

Heartland Advisors Value Investing Team IconHistorical NAVs

Contact a Relationship Manager for historical NAVs.

Historical NAVs also are available from third party websites, such as Bloomberg, Yahoo! Finance, or Google Finance.

Commentary

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12/31/16
Heartland International Value Fund Portfolio Manager Commentary

Heartland International Value Fund 4Q16 Portfolio Manager Commentary

A new wave of volatility washed over global markets as macro events once again took center stage.

Portfolio Composition

Characteristics

12/31/2016

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CharacteristicInternational ValueRussell Global® ex-US Small Cap
Holdings 48-
Assets $23 million-
Assets in Dividend-Paying Companies 87.7% -
Median Market Cap $643 million$671 million
Weighted Average Market Cap $1.1 billion$1.3 billion
Trailing 1-Year Turnover 55.4% -

Capitalization Breakdown
12/31/2016
Cap Range% of Equities in Portfolio
>$15 billion0.0
$2-15 billion14.6
$300 million-2 billion65.8
<$300 million19.6

The above breakdown does not include short-term investments.

Valuation Analysis
Equity securities only, weighted median unless otherwise noted

12/31/2016

*Weighted average

Heartland International Value Fund Valuation Analysis Charts 1Heartland International Value Fund Valuation Analysis Charts 1

Sector Allocation

12/31/2016

Source: FactSet Research Systems Inc., and Russell Investment Group

Heartland International Value Fund Sector Charts 1Heartland International Value Fund Sector Charts 2

Top 10 Holdings
12/31/2016

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TickerHoldingCountry% of Net AssetsIndustry
IPL AUIncitec Pivot LimitedAustralia3.99Chemicals
184 HKKeck Seng Investments LimitedHong Kong3.84Real Estate Management & Development
8369 JPBank of Kyoto LtdJapan3.18Commercial Banks
CHG LNChemring Group PLCUnited Kingdom3.14Aerospace & Defense
STCK LNStock Spirits GroupUnited Kingdom3.01Beverages
DAN IMDanieli & C. Officine Meccaniche S.p.A.Italy2.88Machinery
ARW LNArrow Global Group PlcUnited Kingdom2.83Consumer Finance
MND CNMandalay Resources CorporationCanada2.81Metals & Mining
SEM AVSemperit Holding AGAustria2.79Machinery
1262 TTGreen Seal Holding Ltd.Taiwan2.79Chemicals
% of Total Net Assets31.26

Country Allocation

12/31/2016

  International
Value Fund (%)
Russell Global®
ex-US Small Cap (%)
Japan          23.4                   22.3
United Kingdom          13.5                     9.1
Hong Kong          10.6                     5.8
Canada            9.7                     7.6
Australia            7.0                     5.5
Taiwan            6.6                     6.3
Brazil            4.8                     1.7
Germany            4.6                     2.4
South Korea            3.5                     4.9
Austria            3.3                     0.5
Italy            3.0                     1.2
France            2.6                     1.7
Slovenia            1.7                       -  
Netherlands            1.6                     1.2
Ireland            1.5                     0.5
United States            1.5                     1.0
Colombia            1.1 <0.1
Total % of Equity Investments        100.0                   71.7
Sector-Level Attribution

12/30/2016

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Security-Level Attribution & Contribution

12/30/2016

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5-Year Risk Analysis

12/31/2016

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
International Value-1.1513.770.98-0.280.4195.24103.8283.6799.64
Russell Global® ex-US Small Cap0.0012.881.000.000.55100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group
Alpha, beta, and information ratio are versus the Russell Global® ex-US Small Cap.

Distributions

Record
Date
Payable
Date
                Ordinary Dividend
($/share)
Short-Term Capital
Gain ($/share)
Long-Term Capital
Gain ($/share)
12/28/201612/29/2016
0.13541--
12/28/201512/29/2015
0.05090-0.08892
12/29/201412/23/2014
0.65792-0.11684
12/26/201312/27/2013
0.48676--
12/26/201212/27/2012
0.17798--
12/26/201112/28/2011
0.03972--

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©2017 Heartland Advisors | 789 N. Water Street, Suite 500, Milwaukee, WI 53202 | Business Office: 414-347-7777 | Financial Professionals: 888-505-5180 | Individual Investors: 800-432-7856

The International Value Fund invests primarily in small foreign companies selected on a value basis. Such securities generally are more volatile and less liquid than those of larger companies. Foreign securities have additional risk, including but not limited to exchange rate changes, political and economic upheaval, and relatively low market liquidity. These risks are magnified in emerging markets.

Value investments are subject to the risk that their intrinsic value may not be recognized by the broad market.

Information about Morningstar Ratings™ are ©2017 Morningstar, Inc. All rights reserved. The information contained herein is (1) proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed, and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. 

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

As of 1/31/2017 Morningstar Ratings™: The Heartland International Value Fund investor class was rated against -, 37, and 53 U.S.-domiciled Foreign Small/Mid Value funds over the 10-, 5-, and 3-year periods and received -, 2, and 2 stars, respectively.

Portfolio holdings are subject to change without notice. Current and future portfolio holdings are subject to risk.

Portfolio holdings exclude cash, cash equivalents, options, and futures.

Certain security valuations and forward estimates are based on Heartland Advisors' calculations. Any forecasts may not prove to be true.

Foreign country classifications are generally determined by referencing country of domicile sourced from FactSet Research Systems Inc.

Heartland’s investing glossary provides definitions for several terms used on this page.

Sector and industry classifications as determined by Heartland Advisors may reference data from sources such as FactSet Research Systems, Inc. or the Global Industry Classification Codes (GICS) developed by Standard & Poor’s and Morgan Stanley Capital International.

The above individual is a registered representative of ALPS Distributors, Inc.

The Heartland Funds are distributed by ALPS Distributors, Inc.

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