Heartland Value Plus Fund

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

HRVIX, HNVIX

Overview

Investment Focus

Invests in undervalued small companies and seeks to reduce volatility through strong balance sheets and dividends

Distinguishing Characteristics

  • Invests in stocks with market capitalization between $250 million and $4 billion
  • Designed for investors who seek a portfolio of small company stocks that may produce modest dividend income
  • Benchmarked to the Russell 2000® Value Index
  • Typically holds 40-70 stocks
  • Inception date: 1993

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 HRVIXHNVIX
CUSIP 422352500422352849
Inception Date 10/26/199305/01/2008
Assets $891 million$790 million

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

New investor restrictions may apply.

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 Fee0.700.70
12b-1 Distribution Fee0.250.00
Other Expenses0.190.19
Total Expense Ratio1.140.89

*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
1Overall 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 Plus Fund Portfolio Management Team

32 years of industry experience
25 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.

Bradford A. Evans

Evans, CFA, is Senior Vice President, Director of Equity Research, and Portfolio Manager of the Value Plus Fund and its corresponding separately managed account strategy. He has 19 years of industry experience, 16 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
3/19/2015
Heartland Advisors Value Investing Portfolio Manager Bradford Evans

Bradford A. Evans Interviewed on Bloomberg Surveillance

Tom Keene and Michael McKee interview Portfolio Manager Bradford A. Evans, CFA. In the radio interview, Evans explains the dynamics creating tough conditions for small-cap value and provides examples of how Heartland’s 10 Principles of Value Investing(TM) are applied in today’s market.

Heartland in the News
3/19/2015
Heartland Advisors Value Investing Portfolio Manager Bradford Evans

Bradford A. Evans Highlights 3 Stocks We Like in TheStreet Video

Portfolio Manager Bradford A. Evans, CFA, uses our 10 Principles of Value Investing(TM) to highlight why we like three particular companies.

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.

Heartland in the News
11/16/2014
Heartland Advisors Value Investing Portfolio Manager Bradford Evans

PM Demonstrates How Heartland Evaluates Management and Insider Ownership

Senior Vice President and Portfolio Manager Bradford A. Evans, CFA, applies several criteria from Heartland’s 10 Principles of Value Investing(TM) to weigh in on an out-of-favor stock.

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 Plus
Investor Class
9.839.539.266.558.594.80-19.98-16.20-12.79
Value Plus
Institutional Class
9.949.649.416.768.905.08-19.79-16.06-12.74
Russell 2000® Value9.649.548.745.7013.2311.77-4.95-6.83-7.53
*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 Plus
Investor Class
10.6110.6310.428.2610.8310.08-11.24-3.92-1.33
Value Plus
Institutional Class
10.7110.7410.568.4811.1510.38-11.01-3.80-1.27
Russell 2000® Value10.1110.339.876.8714.8115.500.780.76-1.20
*Not annualized

2014 (%)2013 (%)2012 (%)2011 (%)2010 (%)2009 (%)2008 (%)
Value Plus Investor Class-2.7034.1511.38-5.3728.5026.37-17.88
Value Plus Institutional Class-2.4534.5311.67-5.0728.8526.70-17.71
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, 10/26/1993 to 6/30/2015
Chart represents a hypothetical example of an investment in the Value Plus Fund representing historical returns

Heartland Value Plus Fund Growth of 10000 Chart

Morningstar Ratings™
  • Investor Class
  • Institutional Class
Morningstar Ratings TM
8/31/2015
RatingTotal Funds
Overall2365
10-Year3199
5-Year1308
3-Year1365
Morningstar Ratings TM
8/31/2015
RatingTotal Funds
Overall1365
10-Year4199
5-Year1308
3-Year1365

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 class of the Value Plus Fund are 1.14% and 0.89%, 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 Plus Fund is 10/26/1993 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 Plus Fund Portfolio Manager Commentary

Heartland Value Plus Fund 2Q15 Portfolio Manager Commentary

Our focus on more economically exposed stocks helped the Fund for much of the quarter; however, after a sell-off at the end of June caused by fears over the Greek debt crisis, the Fund ended up lagging its benchmark.

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Archive

3/31/2015

Heartland Value Plus Fund 1Q15 Portfolio Manager Commentary

Our bottom-up stock analysis is focused on companies that are able to improve margins regardless of macro factors. In light of the challenging quarter for the Fund and momentum-driven market environment, we continue to see value in Consumer Discretionary, Industrials, Materials, and Energy—areas where we believe valuations are low and the risk–reward dynamic is favorable.

12/31/2014

Heartland Value Plus Fund 4Q14 Portfolio Manager Commentary

Our lack of exposure to high flying Real Estate Investments Trusts and bias toward natural gas-related stocks in the Energy sector drove the underperformance in the Fund, and resulted in a disappointing end of the year.

9/30/2014

Heartland Value Plus Fund 3Q14 Portfolio Manager Commentary

Our Energy names took a step back this quarter after a very strong run in the first half of the year, yet year-to-date our selection effect remains positive. We continue to hold the long-term view that the value inherent in our names has not changed and will be recognized.

Portfolio Composition

Characteristics

6/30/2015

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CharacteristicValue PlusRussell 2000® Value
Holdings 55-
Assets $1.7 billion-
Assets in Dividend-Paying Companies 83.6% -
Median Market Cap $1.0 billion$701 million
Weighted Average Market Cap $1.4 billion$1.7 billion
Trailing 1-Year Turnover 25.6% -

Capitalization Breakdown
6/30/2015
Cap Range% of Equities in Portfolio
Large-Cap 0.0
Mid-Cap 20.9
Small-Cap 75.4
Micro-Cap 3.7
Valuation Analysis
Equity securities only, weighted median unless otherwise noted

6/30/2015

*Weighted average

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

Sector Allocation

6/30/2015

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

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

Top 10 Holdings
6/30/2015

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TickerHolding% of Net AssetsIndustry
RGSRegis Corporation3.9Diversified Consumer Services
MDCM.D.C. Holdings, Inc.3.7Household Durables
NXQuanex Building Products Corp.3.6Building Products
DFDean Foods Company3.2Food Products
WPXWPX Energy, Inc.3.0Oil Gas & Consumable Fuels
CHSChico's FAS, Inc.2.9Specialty Retail
TCBTCF Financial Corporation2.8Commercial Banks
GVAGranite Construction, Inc.2.8Construction & Engineering
FREDFred's, Inc. (Class A)2.7Multiline Retail
HSIIHeidrick & Struggles International, Inc.2.7Professional Services
% of Total Net Assets31.3

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 Plus-4.2517.951.07-0.770.6067.25127.5592.1894.71
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 Plus-3.9717.961.07-0.710.6267.93127.0292.1494.71
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 ($/share)
12/29/201412/30/2014
0.068250.300142.84734
12/26/201312/27/2013
0.164310.541573.30825
12/26/201212/27/2012
0.356680.208640.60760
12/28/201112/29/2011
0.183006-0.319936
12/30/201012/31/2010
0.078769--
12/28/201012/29/2010
--0.160541
  3/30/2010  3/31/2010
0.019995--
  3/30/2010  3/31/2010
0.001223--
12/30/200912/31/2009
0.081006--
  9/29/2009  9/30/2009
0.016893--
  6/29/2009  6/30/2009
0.013335--
  3/30/2009  3/31/2009
0.074305--
  9/29/2008  9/30/2008
0.023100--
  6/27/2008  6/230/2008
0.031991--
  3/28/2008  3/31/2008
0.048473--
12/26/200712/27/2007
-0.3661033.707176
  9/27/2007  9/28/2007
0.2185340.2135930.602828
  6/28/2007  6/29/2007
0.047600--
  3/29/2007  3/30/2007
0.154655--
Record
Date
Payable
Date
  Ordinary Dividend
($/share)
Short-Term Capital
Gain ($/share)
Long-Term Capital
Gain ($/share)
12/29/201412/30/2014
0.181330.300142.84734
12/26/201312/27/2013
0.280970.541573.30825
12/26/201212/27/2012
0.452430.208640.60760
12/28/201112/29/2011
0.284872-0.319936
12/30/201012/31/2010
0.138722--
12/28/201012/29/2010
--0.160541
  3/30/2010  3/31/2010
0.032692--
  3/30/2010  3/31/2010
0.013036--
12/30/200912/31/2009
0.093645--
  9/29/2009  9/30/2009
0.026711--
  6/29/2009  6/30/2009
0.022818--
  3/30/2009  3/31/2009
0.118031--
  9/29/2008  9/30/2008
0.038800--
  6/27/2008  6/30/2008
0.039712--
Heartland Advisors Value Investing Team Icon

Additional 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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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 Plus Fund invests in small 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 70) 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.

There is no assurance that dividend-paying stocks will mitigate volatility.

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

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.

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 Plus 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 3, 1, and 1 stars, respectively.
As of 8/31/2015 Morningstar Ratings™: The Heartland Value Plus 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 4, 1, and 1 stars, respectively.

Heartland Advisors considers large-cap companies to be larger than $15 billion in market cap, mid-cap companies to be between $2 billion and $15 billion, small-cap companies to be between $300 million and $2 billion, and micro-cap companies to be less than $300 million. The above breakdown does not include short-term investments.

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.

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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