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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

6/30/2016

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 $714 million$58 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 6/30/2016, out of 372 Small Value funds, based on risk-adjusted performance for investor class shares
2Overall Morningstar Rating™ as of 6/30/2016, out of 372 Small Value funds, based on risk-adjusted performance for institutional class shares

Portfolio Management Team

Heartland Value Fund Portfolio Management Team

69 years of industry experience
46 years of experience at Heartland

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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 47 years of industry experience, 33 at Heartland.

Eric Miller

Miller is Vice President and Portfolio Manager of the Heartland Value Fund. He has 22 years of industry experience, 13 at Heartland.

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Investing Perspectives

Water & Wells
6/27/16
Heartland Advisors Value Investing Portfolio Manager Bill Nasgovitz

An Active Approach to Finding Value

Should investors look to the Russell 2000® Value rebalance for insights into compelling opportunities? Portfolio Manager Bill Nasgovitz doesn’t think so.

Heartland in the News
4/18/16
Heartland Advisors Value Investing Portfolio Manager Bill Nasgovitz

The Unattractiveness of Low Valuations Based on Financial Engineering

Debt-financed share buybacks may be a short-sighted tactic, says Portfolio Manager Bill Nasgovitz. He explains why we believe businesses with low debt and the ability to improve earnings through sales growth will be poised to outperform in the years ahead.

PM Perspective
3/16
Heartland Value Fund Portfolio Manager Bill Nasgovitz

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

Micro-caps can be an overlooked source of opportunities in a small-cap strategy. Portfolio Manager Bill Nasgovitz explores the advantages and our approach to the group.

PM Perspective
2/16
Heartland Advisors Value Investing Portfolio Manager Bill Nasgovitz

Investing in a 3-D World

Demographics, debt, and the fear of deflation are posing challenges for investors, but we believe some areas of the market are better insulated from the headwinds than others.

Water & Wells
2/2/16
Heartland Advisors Value Investing Portfolio Manager Eric Miller

Mind the Gap

Chasing what has worked may be undercutting downside protection for areas of the market.

Heartland in the News
12/29/15
Heartland Advisors Value Investing Portfolio Manager Bill Nasgovitz

Today’s Market in the Context of 31 Years of Value Investing

Bill Nasgovitz compares this low-interest-rate, growth and momentum market with other conditions that have transpired since the launch of his Heartland Value Fund in December 1984.

Heartland in the News
1/6/16
Heartland Advisors Value Investing Portfolio Manager Bill Nasgovitz

Perspective on Mitigating Volatility in MarketWatch

Chairman, CIO, and Portfolio Manager Bill Nasgovitz is interviewed. He discusses the role of a time-tested process and long-term approach.

Performance

Average Annual Total Returns
  • Month-End
  • Quarter-End
  • Annual
7/31/2016

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
Value
Investor Class
11.739.237.504.464.382.61-0.734.176.00
Value
Institutional Class
11.799.327.614.634.542.77-0.584.275.98
Russell 2000® Value11.089.728.275.8510.036.015.5911.815.40
*Not annualized
6/30/2016

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
Value
Investor Class
11.568.556.943.453.362.75-11.40-1.722.05
Value
Institutional Class
11.628.647.063.623.532.93-11.24-1.612.13
Russell 2000® Value10.939.137.735.158.156.36-2.586.084.31
*Not annualized

2015 (%)2014 (%)2013 (%)2012 (%)2011 (%)2010 (%)2009 (%)2008 (%)
Value Investor Class-11.042.2232.1113.83-6.9221.2844.49-39.53
Value Institutional Class-10.902.3832.3713.98-6.7321.5044.86-39.38
Russell 2000® Value-7.474.2234.5218.05-5.5024.5020.58-28.92
Growth of a Hypothetical $10,000 Investment

6/30/2016

Since inception of the investor class, 12/28/1984 to 6/30/2016
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
6/30/2016
RatingTotal Funds
Overall2372
10-Year2213
5-Year1335
3-Year2372
Morningstar Ratings TM
6/30/2016
RatingTotal Funds
Overall2372
10-Year2213
5-Year2335
3-Year2372

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 Value Fund are 1.06% 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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6/30/16
Heartland Value Fund Portfolio Manager Commentary

Heartland Value Fund 2Q16 Portfolio Manager Commentary

Valuation focused investors received a double dose of good news this quarter: Market breadth expanded and small-cap value stocks outpaced growth.

Portfolio Composition

Characteristics

6/30/2016

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CharacteristicValueRussell 2000® Value
Holdings 104-
Assets $772 million-
Median Market Cap $276 million$572 million
Weighted Average Market Cap $819 million$1.6 billion
Trailing 1-Year Turnover 42.4% -

Capitalization Breakdown
6/30/2016
Cap Range% of Equities in Portfolio
>$15 billion0.0
$2-15 billion12.1
$300 million-2 billion49.4
<$300 million38.5

The above breakdown does not include short-term investments.

Valuation Analysis
Equity securities only, weighted median unless otherwise noted

6/30/2016

*Weighted average

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

Sector Allocation

6/30/2016

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

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

Top 10 Holdings
6/30/2016

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TickerHolding% of Net AssetsIndustry
CTRECareTrust REIT, Inc. 3.57Real Estate Investment Trusts (REITs)
MDUMDU Resources Group Inc3.11Multi-Utilities
ACTGAcacia Research Corporation2.85Communications Equipment
BBSIBarrett Business Services, Inc.2.67Professional Services
FREDFred's, Inc. (Class A)2.09Food & Staples Retailing
ROVIROVI Corp2.02Software
ENDPEndo Pharmaceuticals Holdings, Inc.2.02Pharmaceuticals
LDLLydall, Inc.2.00Machinery
TCBTCF Financial Corporation1.97Commercial Banks
IVCInvacare Corp.1.88Health Care Equipment & Supplies
% of Total Net Assets24.18

Sector-Level Attribution

6/30/2016

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Security-Level Attribution & Contribution

6/30/2016

These materials are for financial professional use only. You will be prompted to log in. Free account registration is available.

5-Year Risk Analysis

  • Investor Class
  • Institutional Class
6/30/2016

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Value-3.8415.790.93-0.800.2183.95104.1086.1696.44
Russell 2000® Value0.0015.711.000.000.51100.00100.00100.000.00

*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.

6/30/2016

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Value-3.6715.790.93-0.770.2284.41103.8086.1396.44
Russell 2000® Value0.0015.711.000.000.51100.00100.00100.000.00

*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)
12/28/2015 12/29/2015   0.13994 - 2.82914
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)
12/28/2015 12/29/2015   0.20977 - 2.82914
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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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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©2016 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 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.

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 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 6/30/2016 Morningstar Ratings™: The Heartland Value Fund investor class was rated against 213, 335, and 372 U.S.-domiciled Small Value funds over the 10-, 5-, and 3-year periods and received 2, 1, and 2 stars, respectively.
As of 6/30/2016 Morningstar Ratings™: The Heartland Value Fund institutional class was rated against 213, 335, and 372 U.S.-domiciled Small Value funds over the 10-, 5-, and 3-year periods and received 2, 2, and 2 stars, respectively.

There is no guarantee that a particular investment strategy will be successful.

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

Unless noted with an asterisk (*), 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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