Heartland Value Fund

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

HRTVX, HNTVX

Overview

Investment Focus

Pursues long-term capital appreciation by investing in micro- and small-cap companies

Distinguishing Characteristics

  • Invests in stocks with a market capitalization of less than $2 billion and can have a significant allocation to micro-cap names
  • Designed for investors who seek a portfolio with micro-cap exposure and additional liquidity provided by small cap stocks
  • Benchmarked to the Russell 2000® Value Index
  • Typically holds 100-150 stocks
  • Inception date: 1984

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

6/30/2015

Benchmark: Russell 2000® Value Index

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Investor Class Institutional Class
Ticker HRTVXHNTVX
CUSIP 422359109422352831
Inception Date 12/28/198405/01/2008
Assets $968 million$75 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 (%)
Load00
Sales Charge00
Exchange Fee00
Redemption Fee*22

*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 Fee0.750.75
12b-1 Distribution Fee0.160.00
Other Expenses0.160.16
Total Expense Ratio1.070.91

*As stated in the prospectus (pdf) dated 5/1/2015

Overall Morningstar Rating™

  • Investor Class
  • Institutional Class
2Overall Morningstar Rating™ as of 8/31/2015, out of 365 Small Value funds, based on risk-adjusted performance for investor class shares
2Overall Morningstar Rating™ as of 8/31/2015, out of 365 Small Value funds, based on risk-adjusted performance for institutional class shares

Portfolio Management Team

Heartland Value Fund Portfolio Management Team

59 years of industry experience
41 years of experience at Heartland

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Adam J. Peck

Peck, CFA, is Vice President and Portfolio Manager of the Value Plus and Value Funds and their corresponding separately managed account strategies. He has 13 years of industry experience, 9 at Heartland.

Bill Nasgovitz

Nasgovitz is Chairman and CIO, and Portfolio Manager of the Value Fund and its corresponding separately managed account strategy. He also is President and Director of Heartland Funds. He has 46 years of industry experience, 32 at Heartland.

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Investing Perspectives

Portfolio Manager Perspective
9/2015
Heartland Advisors Value Investing Portfolio Manager Adam Peck

Housing: A Secular Opportunity?

Low interest rates, demographics, and a solid economy should provide staying power to a resurgent housing market. We are finding attractively valued opportunities related to the area while diversifying idiosyncratic risks in our portfolios.

Water & Wells
5/19/2015
Heartland Advisors Value Investing Portfolio Manager Adam Peck

Quality on Sale

We think depressed valuations for high quality companies are presenting opportunities for investors looking to upgrade their holdings.

Portfolio Manager Perspective
5/2015
Heartland Advisors Value Investing Portfolio Manager Adam Peck

Small-Cap Valuations: Way Too High or Room to Run?

Small-company stocks have posted strong performance over the past several years. Does that mean they’ve run out of steam? We don’t believe so—and here are a few reasons why.

Heartland in the News
5/4/2015
Heartland Value Fund Portfolio Management Team

Forbes Features the Heartland Value Fund

“The Guy With The Kitty Litter Stock” highlights reasons to look at the Heartland Value Fund now, during this late-stage bull market.

Portfolio Manager Perspective
3/2015
Heartland Value Fund Portfolio Management Team

How Micro-Caps Add Value to a Small-Cap Value Strategy

Portfolio Managers Adam J. Peck, CFA, and Bill Nasgovitz share why they emphasize exposure to micro-caps as part of a small-cap strategy.

Portfolio Manager Perspective
1/2015
Heartland Advisors Value Investing Portfolio Manager Adam Peck

How Do We Know When a Stock is Truly Cheap?

Cheap stocks don’t always offer the best values. Portfolio Manager Adam J. Peck, CFA, explains how the EV/EBITDA metric helps to separate the stocks that are truly undervalued from those that are simply inexpensive.

Performance

Average Annual Total Returns
  • Month-End
  • Quarter-End
  • Annual
8/31/2015

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
Value
Investor Class
11.939.378.905.1810.098.47-14.30-11.69-10.50
Value
Institutional Class
11.989.459.005.3310.278.65-14.17-11.58-10.47
Russell 2000® Value11.059.548.745.7013.2311.77-4.95-6.83-7.53
*Not annualized
6/30/2015

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
Value
Investor Class
12.4110.3610.206.9312.2313.13-6.90-1.33-2.00
Value
Institutional Class
12.4610.4410.317.0912.4113.31-6.77-1.24-1.97
Russell 2000® Value11.4010.339.876.8714.8115.500.780.76-1.20
*Not annualized

2014 (%)2013 (%)2012 (%)2011 (%)2010 (%)2009 (%)2008 (%)
Value Investor Class2.2232.1113.83-6.9221.2844.49-39.53
Value Institutional Class2.3832.3713.98-6.7321.5044.86-39.38
Russell 2000® Value4.2234.5218.05-5.5024.5020.58-28.92
Growth of a Hypothetical $10,000 Investment

6/30/2015

Since inception of the investor class, 12/28/1984 to 6/30/2015
Chart represents a hypothetical example of an investment in the Value Fund representing historical returns

Heartland Value Fund Growth of 10000 Chart

Morningstar Ratings™
  • Investor Class
  • Institutional Class
Morningstar Ratings TM
8/31/2015
RatingTotal Funds
Overall2365
10-Year2199
5-Year1308
3-Year2365
Morningstar Ratings TM
8/31/2015
RatingTotal Funds
Overall2365
10-Year2199
5-Year2308
3-Year2365

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 5/1/2015, the gross expense ratios for the investor and institutional classes of the Value Fund are 1.07% and 0.91%, 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. Without such waivers and/or reimbursements, total returns may have been lower.

The inception date for the Value Fund is 12/28/1984 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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6/30/2015
Heartland Value Fund Portfolio Manager Commentary

Heartland Value Fund 2Q15 Portfolio Manager Commentary

Allocation decisions in a number of sectors helped the Fund as did stock selection in Financials; however, it lagged its benchmark. We believe signs point to a bright environment for consumers and have positioned the portfolio to benefit from a solid, expanding economy.

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Archive

3/31/2015

Heartland Value Fund 1Q15 Portfolio Manager Commentary

The Fund was up for the quarter, yet lagged its benchmark. We believe small-cap stocks are poised to benefit from the strength of the U.S. dollar and are finding compelling ideas in areas tied to consumer spending.

12/31/2014

Heartland Value Fund 4Q14 Portfolio Manager Commentary

The Fund held its own for most of the year but was challenged when oil declined in the fourth quarter. Our experience through market cycles has taught us to seize upon these volatile times.

9/30/2014

Heartland Value Fund 3Q14 Portfolio Manager Commentary

Year-to-date, the Fund is outpacing its benchmark by over 200 basis points, although it underperformed for the quarter. Our holdings in Energy, a sector broadly hurt by declining commodity prices, Financials, and Health Care dampened returns; stock selection within Industrials was a bright spot.

Portfolio Composition

Characteristics

6/30/2015

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CharacteristicValueRussell 2000® Value
Holdings 126-
Assets $1.0 billion-
Median Market Cap $314 million$701 million
Weighted Average Market Cap $724 million$1.7 billion
Trailing 1-Year Turnover 40.0% -

Capitalization Breakdown
6/30/2015
Cap Range% of Equities in Portfolio
Large-Cap 0.0
Mid-Cap 6.2
Small-Cap 61.1
Micro-Cap 32.7
Valuation Analysis
Equity securities only, weighted median unless otherwise noted

6/30/2015

*Weighted average

Heartland Value Fund Valuation Analysis Charts 1Heartland Value Fund Valuation Analysis Charts 2

Sector Allocation

6/30/2015

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

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

Top 10 Holdings
6/30/2015

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TickerHolding% of Net AssetsIndustry
TCBTCF Financial Corporation2.8Commercial Banks
IVCInvacare Corp.2.0Health Care Equipment & Supplies
ACTGAcacia Research Corporation2.0Communications Equipment
CTRECareTrust REIT, Inc. 1.9Real Estate Investment Trusts (REITs)
6960 JPFukuda Denshi Co., Ltd.1.9Health Care Equipment & Supplies
FREDFred's, Inc. (Class A)1.8Multiline Retail
ASTEAstec Industries, Inc.1.8Machinery
ENSGThe Ensign Group, Inc.1.8Health Care Providers & Services
BBSIBarrett Business Services, Inc.1.7Professional Services
TRIBTrinity Biotech PLC (ADR)1.7Health Care Equipment & Supplies
% of Total Net Assets19.4

Sector-Level Attribution

6/30/2015

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Security-Level Attribution & Contribution

6/30/2015

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5-Year Risk Analysis

  • Investor Class
  • Institutional Class
6/30/2015

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Value-1.1615.890.92-0.450.7776.42114.9187.5596.30
Russell 2000® Value0.0016.071.000.000.92100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group
Alpha, beta, and information ratio are versus the Russell 2000® Value. Depiction is for investor class shares.

6/30/2015

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Value-0.9915.880.92-0.420.7876.75114.5887.5196.30
Russell 2000® Value0.0016.071.000.000.92100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group
Alpha, beta, and information ratio are versus the Russell 2000® 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)
12/29/2014 12/30/2014   0.22288 1.11429 4.12240
12/26/2013 12/27/2013   0.42958 1.17103 3.98433
12/26/2012 12/27/2012   - 0.17740 2.74405
12/28/2011 12/29/2011   - 0.675954 1.798273
12/28/2010 12/29/2010   - 0.058470 -
  3/28/2008   3/31/2008   - - 0.084234
12/26/2007 12/27/2007   0.239182 0.710262 5.923943

No distributions were paid in 2009.
 

Record
Date
Payable
Date
    Ordinary Dividend
($/share)
Short-Term Capital
Gain ($/share)
Long-Term Capital
Gain ($/share)
12/29/2014 12/30/2014   0.30599 1.11429 4.12240
12/26/2013 12/27/2013   0.50608 1.17103 3.98433
12/26/2012 12/27/2012   - 0.17740 2.74405
12/28/2011 12/29/2011   - 0.675954 1.798273
12/28/2010 12/29/2010   - 0.058470 -

No distributions were paid in 2008 and 2009.
 

 
Heartland Advisors Value Investing Team IconAdditional Historical Distributions

Contact a Relationship Manager for historical NAVs.

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Water & Wells (brief market perspectives)

Quarterly Fund communications (factsheets, commentary, etc.)

Quarterly Strategy communications (factsheets, commentary, etc.)

Portfolio Manager Perspectives (thought pieces from our Investment Team)

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These email lists are created for use by U.S. investment professionals only and are published strictly for informational purposes. Providing access to the content of these emails does not explicitly or implicitly constitute a solicitation of services or products of Heartland Advisors, Heartland Funds, or any of their affiliates. The information contained in these emails is not intended for distribution to, or for use by, investment professionals in a jurisdiction where distribution or purchase is not authorized. The information contained in these emails is not appropriate for use by individual investors. By registering for any of these emails, you agree to Heartland’s terms and conditions and that you are qualified as an institutional investor or otherwise member of a registered broker/dealer, registered investment advisor, or investment consulting firm.
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Quarterly Fund factsheets and commentary

©2015 Heartland Advisors | 789 N. Water Street, Suite 500, Milwaukee, WI 53202 | Business Office: 414-347-7777 | Financial Professionals: 888-881-0882 | Institutional Investors: 414-977-8771 | Individual Investors: 800-432-7856

The Value Fund primarily invests in small companies selected on a value basis. Such securities generally are more volatile and less liquid than those of larger companies.

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

Industry and sector classifications are generally determined by referencing the Global Industry Classification Standard Codes (GICS) developed by Standard & Poor’s and Morgan Stanley Capital International.

The portfolio may lose value in various market conditions and an investor could have a loss of principal.

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 ©2015 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.

For each fund with at least a 3-year history, Morningstar calculates a Morningstar Rating™ based on a risk-adjusted return measure that accounts for variation in a fund’s monthly performance—including the effects of sales charges, loads, and redemption fees—placing greater emphasis on downward variations, and rewards consistent performance. The top 10% of funds in a category receive 5 stars, next 22.5% receive 4 stars, next 35% receive 3 stars, next 22.5% receive 2 stars, and bottom 10% receive 1 star. Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in distribution percentages. The Morningstar Ratings™ are for the specified share class. Classes have a common portfolio, different expense structures, and may have different performance characteristics. For periods prior to the inception date of the institutional class, ratings are calculated using the investor class.

The Overall Morningstar Rating™ for a fund is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year Morningstar Rating™ metrics.

As of 8/31/2015 Morningstar Ratings™: The Heartland Value Fund investor class was rated against 199, 308, and 365 U.S.-domiciled Small Value funds over the 10-, 5-, and 3-year periods and received 2, 1, and 2 stars, respectively.
As of 8/31/2015 Morningstar Ratings™: The Heartland Value Fund institutional class was rated against 199, 308, and 365 U.S.-domiciled Small Value funds over the 10-, 5-, and 3-year periods and received 2, 2, and 2 stars, respectively.

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

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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