Heartland Select Value Fund

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

HRSVX, HNSVX

Overview

Investment Focus

Dynamically pursues the best opportunities regardless of market capitalization

Distinguishing Characteristics

  • Multi-cap portfolio that typically invests in stocks with market capitalization of $500 million or greater
  • Designed for investors who seek diversification through an all-cap approach
  • Benchmarked to the Russell 3000® Value Index
  • Typically holds 40-60 stocks
  • Inception date: 1996

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 3000® Value Index

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Investor Class Institutional Class
Ticker HRSVXHNSVX
CUSIP 422352807422352856
Inception Date 10/11/199605/01/2008
Assets $222 million$42 million

Investor
Class ($)
Institutional
Class ($)
Initial Investment1,000500,000
IRA Initial Investment500500,000
Subsequent Investments100100

Shareholder Fees

Paid directly from total investment

  Investor
Class (%)
Institutional
Class (%)
Load 0 0
Sales Charge 0 0
Exchange Fee 0 0
Redemption Fee* 2 2

*If shares are redeemed or exchanged within 10 days of purchase

Annual Fund Operating Expenses

Paid annually as a percentage of total investment value*

  Investor
Class (%)
Institutional
Class (%)
Management Fee 0.75 0.75
12b-1 Distribution Fee 0.25 0.00
Other Expenses 0.20 0.13
Total Expense Ratio 1.20 0.88

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

Overall Morningstar Rating™ in Mid-Cap Value Category

  • Investor Class
  • Institutional Class
3Overall Morningstar Rating™ as of 2/28/2017, out of 338 Mid-Cap Value funds, based on risk-adjusted performance for investor class shares
2Overall Morningstar Rating™ as of 2/28/2017, out of 338 Mid-Cap Value funds, based on risk-adjusted performance for institutional class shares


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Video
2/17 - 2:05

Our Multi-Cap Approach

Will Nasgovitz, Co-Portfolio Manager of the Select Value Fund and its corresponding separately managed account strategy, provides an overview of Heartland's multi-cap strategy.

Portfolio Management Team

Heartland Select Value Fund Portfolio Management Team

52 years of industry experience
42 years of experience at Heartland

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Colin McWey

McWey, CFA, is Vice President and Portfolio Manager of the Select Value and Mid Cap Value Funds and their corresponding separately managed account strategies. He has 14 years of industry experience, 7 at Heartland.

Will Nasgovitz

Nasgovitz is CEO and Portfolio Manager of the Select Value and Mid Cap Value Funds and their corresponding separately managed account strategies. He also is CEO of Heartland Funds. He has 16 years of industry experience, 13 at Heartland.

David Fondrie

Fondrie, CPA, is Senior Vice President and Portfolio Manager of the Select Value Fund and its corresponding separately managed account strategy. He has 22 years of industry experience, all at Heartland.

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Investing Perspectives

Heartland in the News
2/22/17
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Leveraging our Disciplined Approach

Sure a rising tide can lift all boats, but we’re ‘creating our own luck,' explains Portfolio Manager Colin McWey, CFA.

PM Perspective
2/17
Heartland Advisors value investing portfolio manager Will Nasgovitz

What’s in Your Index?

A look at how passive investing may be adding unwanted risk to your portfolio.

Water & Wells
2/7/17
Heartland Advisors Value Investing Portfolio Manager Will Nasgovitz

Corporate America’s Doping Problem

History has been unforgiving for companies that bulk up on debt.

Heartland in the News
1/16/17
Heartland Advisors Value Investing Portfolio Manager Will Nasgovitz

At the Intersection of Art & Science

A look at how both influence our quest for value.

Water & Wells
12/14/16
Heartland Advisors Value Investing Portfolio Manager Will Nasgovitz

Will High-Yielding Companies Get Lost on the Hike?

A look at how the latest Fed rate hike may play out for dividend paying stocks.

Heartland in the News
11/12/16
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Barron's Highlights Heartland Analysis of Dividend-Paying Stocks

Portfolio Manager Colin McWey, CFA, discusses the year-to-date disparity in performance between high-yielding stocks and the rest of the pack. Our view: investors have focused too much on absolute yield, creating opportunity for managers focused on fundamentals.

Heartland in the News
10/5/16
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Retail Stocks: A Mixed Bag

There are too many brands, too much competition, and not enough demand, says Portfolio Manager Colin McWey, CFA. Yet, a closer look yields a handful of names with attractive valuations and compelling catalysts.

Heartland in the News
9/17/16
Heartland Advisors Value Investing Portfolio Manager Will Nasgovitz

Rethinking 'Safe Havens'

The search for stability in pockets of the equity market usually perceived to be “safe” has driven valuations to extreme levels, with outlooks for these groups deteriorating, says CEO and Portfolio Manager Will Nasgovitz. He shares companies we believe are positioned to improve their businesses and increase dividend payments.

Water & Wells
8/30/16
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Creating a Nightmare on Wall Street?

Investor’s willingness to pay up for peace of mind may prove costly if rates rise or the economy continues to grow.

Heartland in the News
8/21/16
Heartland Advisors Value Investing Portfolio Manager Colin McWey

InvestmentNews Publishes Article by Portfolio Manager Colin McWey

The role capital cycle analysis plays in sector allocation.

Water & Wells
6/27/16 - 2:16
Value Investing Portfolio Manager Will Nasgovitz

A Bottom-Up Take on the Russell 3000® Value Rebalance

Portfolio Manager Will Nasgovitz sees room for debate and areas of opportunity from the Russell rebalance.

PM Perspective
4/16
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Why Catalysts and Context Matter

The difference between an unloved laggard and an attractive investment opportunity often begins with perception. Here is a look at internal catalysts and their importance in changing investors’ views and company results.

PM Perspective
4/16
Heartland Advisors value investing portfolio manager Colin McWey

Cash Flow: An Equalizing Force in Analysis

Cash flow helps us evaluate opportunities on an apples to apples basis regardless of industry or debt.

Performance

Average Annual Total Returns
  • Month-End
  • Quarter-End
  • Annual
2/28/2017

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
Select Value
Investor Class
10.4110.129.126.9811.317.4330.463.103.10
Select Value
Institutional Class
10.5510.279.317.2711.637.7130.803.143.14
Russell 3000® Value8.948.307.866.2113.979.7730.024.044.04
*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* (%)
Select Value
Investor Class
10.3310.188.887.0612.675.9519.2519.2510.18
Select Value
Institutional Class
10.4710.329.077.3513.006.2419.5419.5410.24
Russell 3000® Value8.818.407.545.7614.818.5518.4018.407.24
*Not annualized

2016 (%)2015 (%)2014 (%)2013 (%)2012 (%)2011 (%)2010 (%)2009 (%)2008 (%)
Select Value Investor Class19.25-4.164.0735.0313.06-6.6817.7738.63-31.23
Select Value Institutional Class19.54-3.924.4035.4513.43-6.4218.1539.02-31.02
Russell 3000® Value18.40-4.1312.7032.6917.55-0.1016.2319.76-36.25
5-Year Rolling Returns Demonstrate Strong Results

12/31/2016

Source: FactSet Research Systems Inc, 12/31/1996 to 12/31/2016 for the investor class
Rolling returns computed monthly, using 60-month moving windows

Heartland Select Value Fund Rolling Returns Chart 1

Growth of a Hypothetical $10,000 Investment

12/31/2016

Since inception of the investor class, 10/11/1996 to 12/31/2016
Chart represents a hypothetical example of an investment in the Select Value Fund representing historical returns

Heartland Select Value Fund Growth of 10000 Chart

Morningstar Ratings™ in Mid-Cap Value Category
  • Investor Class
  • Institutional Class
Morningstar Ratings TM
2/28/2017
RatingTotal Funds
Overall3338
10-Year3211
5-Year2302
3-Year3338
Morningstar Ratings TM
2/28/2017
RatingTotal Funds
Overall2338
10-Year4211
5-Year2302
3-Year3338

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 gross expense ratios for the investor and institutional classes of the Select Value Fund are 1.20% and 0.94%, respectively. The Advisor has voluntarily agreed to waive fees and/or reimburse expenses with respect to the institutional class, to the extent necessary to maintain the institutional class “Net Annual Operating Expenses” at a ratio not to exceed 0.99% of average daily net assets. This voluntary waiver/reimbursement may be discontinued at any time. Also, through 11/30/2001, the Advisor voluntarily waived a portion of the Fund’s expenses. Without such waivers and/or reimbursements, total returns may have been lower.

The inception date for the Select Value Fund is 10/11/1996 for the investor class and 5/1/2008 for the institutional class.

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 Select Value Fund Portfolio Manager Commentary

Heartland Select Value Fund 4Q16 Portfolio Manager Commentary

Security selection was strong in several sectors and helped the Fund outpace its benchmark.

Portfolio Composition

Characteristics

12/31/2016

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CharacteristicSelect ValueRussell 3000® Value
Holdings 43-
Assets $264 million-
Assets in Dividend-Paying Companies 80.7% -
Median Market Cap $13.1 billion$1.5 billion
Weighted Average Market Cap $66.4 billion$109.9 billion
Trailing 1-Year Turnover 49.3% -

Capitalization Breakdown
12/31/2016
Cap Range% of Equities in Portfolio
>$15 billion55.5
$2-15 billion30.6
$500 million-2 billion9.9
<$500 million4.0

The above breakdown does not include short-term investments.

Valuation Analysis
Equity securities only, weighted median unless otherwise noted

12/31/2016

*Weighted average

Sector Allocation

12/31/2016

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

Heartland Select Value Fund Sector Charts 1Heartland Select Value Fund Sector Charts 2

Top 10 Holdings
12/31/2016

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TickerHolding% of Net AssetsIndustry
XOMExxon Mobil Corporation4.44Oil Gas & Consumable Fuels
DGXQuest Diagnostics Incorporated4.17Health Care Providers & Services
WMTWal-Mart Stores, Inc.3.92Food & Staples Retailing
EMREmerson Electric Co.3.69Electrical Equipment
CACA, Inc.3.61Software
BHIBaker Hughes Incorporated3.44Energy Equipment & Services
WFCWells Fargo & Company3.34Commercial Banks
HESHess Corporation3.30Oil Gas & Consumable Fuels
EXCExelon Corporation3.09Electric Utilities
AXPAmerican Express Company2.94Consumer Finance
% of Total Net Assets35.94

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

  • Investor Class
  • Institutional Class
12/31/2016

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Select Value-2.8812.461.08-0.451.0197.25113.3886.0989.67
Russell 3000® Value0.0010.661.000.001.38100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group, and Standard & Poor's
Alpha, beta, and information ratio are versus the Russell 3000® Value. Depiction is for investor class shares.

12/31/2016

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Select Value-2.6012.461.09-0.381.0498.24112.5386.1489.67
Russell 3000® Value0.0010.661.000.001.38100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group, and Standard & Poor's
Alpha, beta, and information ratio are versus the Russell 3000® Value. Depiction is for institutional class shares.

Distributions

  • Investor Class
  • Institutional Class
Record
Date
Payable
Date
                   Ordinary Dividend
($/share)
Short-Term Capital
Gain ($/share)
Long-Term Capital
Gain ($/share)
12/28/201612/29/2016
0.32901-3.55079
12/28/201512/29/2015
0.29471-2.69596
12/29/201412/30/2014
0.13505-3.73090
12/26/201312/27/2013
0.124670.402275.04691
12/26/201212/27/2012
0.13263-1.00166
12/28/201112/29/2011
0.128132-0.293044
12/28/201012/29/2010
0.157125--
12/28/200912/29/2009
0.141912--
12/26/200812/29/2008
0.131279--
  3/28/2008  3/31/2008
0.000424--
12/26/200712/27/2007
0.1728240.1872782.233630
Record
Date
Payable
Date
                Ordinary Dividend
($/share)
Short-Term Capital
Gain ($/share)
Long-Term Capital
Gain ($/share)
12/28/201612/29/2016
0.40396-3.55079
12/28/201512/29/2015
0.37470-2.69596
12/29/201412/30/2014
0.25584-3.73090
12/26/201312/27/2013
0.252380.402275.04691
12/26/201212/27/2012
0.24740-1.00166
12/28/201112/29/2011
0.226517-0.293044
12/28/201012/29/2010
0.227143--
12/28/200912/29/2009
0.205304--
12/26/200812/29/2008
0.204619--
 

Heartland Advisors Value Investing Team Icon

Additional Historical Distributions

Contact a Relationship Manager for historical NAVs.

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In addition to stocks of large companies, the Select Value Fund invests in small- and mid-sized companies that are generally less liquid and more volatile than large companies. The Fund also invests in a smaller number of stocks (generally 40 to 60) than the average mutual fund. The performance of these holdings generally will increase the volatility of the Fund’s returns.

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

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.

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 2/28/2017 Morningstar Ratings™: The Heartland Select Value Fund investor class was rated against 211, 302, and 338 U.S.-domiciled Mid-Cap Value funds over the 10-, 5-, and 3-year periods and received 3, 2, and 3 stars, respectively.
As of 2/28/2017 Morningstar Ratings™: The Heartland Select Value Fund institutional class was rated against 211, 302, and 338 U.S.-domiciled Mid-Cap Value funds over the 10-, 5-, and 3-year periods and received 4, 2, and 3 stars, respectively.

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.

Economic predictions are based on estimates and are subject to change.

The above individuals are registered representatives of ALPS Distributors, Inc.

CFA is a trademark owned by CFA Institute.

The Heartland Funds are distributed by ALPS Distributors, Inc.

Separately managed accounts and related investment advisory services are provided by Heartland Advisors, Inc., a federally registered investment advisor. ALPS Distributors, Inc., is not affiliated with Heartland Advisors, Inc.

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