Heartland Small Cap Value Plus Strategy

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

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: 2007

Investment Minimum & Standard Fee Schedule

Minimum: $1 million

Account SizeAnnual Rate (%)
First $5 million1.00
Next $10 million0.85
Above $15 millionNegotiable

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

Portfolio Management Team

Heartland Advisors Small Cap Value Plus Strategy Portfolio Management Team

28 years of industry experience
22 years of experience at Heartland

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Bradford A. Evans

Evans, CFA, is Senior Vice President and Portfolio Manager of the Value Plus Fund and its corresponding separately managed account strategy. He has 21 years of industry experience, 18 at Heartland.

Andrew J. Fleming

Fleming, CFA, is Vice President and Portfolio Manager of the Value Plus Fund and its corresponding separately managed account strategy. He has 7 years of industry experience, 4 at Heartland.

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Investing Perspectives

Heartland in the News
4/6/17
Heartland Advisors Value Investing Portfolio Manager Bradford Evans

Do Dividends Still Hold Value?

Portfolio Manager Bradford A. Evans, CFA, shares why a search for dividend-paying stocks should begin with valuations.

PM Perspective
2/17
Heartland Advisors Value Investing Portfolio Manager Bradford Evans

How Do We Know When a Stock is Truly Cheap?

Using EV/EBITDA helps us develop a complete picture of when a company is truly undervalued as opposed to simply inexpensive.

Water & Wells
11/22/16
Heartland Advisors Value Investing Portfolio Manager Bradford A. Evans

London Calling: Borrowers Feeling the LIBOR Pinch

A look at why many companies are feeling the pain of higher rates even before the Fed acts.

Video
9/16 - 56:20
Heartland Advisors value investing market insight video

MASTERCLASS: Small-Cap Investing

Do opportunities remain in small-caps after such a strong run? Watch this Asset TV panel discussion featuring Portfolio Manager Andrew J. Fleming, CFA, for Heartland’s viewpoint.

Water & Wells
8/23/16
Heartland Advisors Value Investing Portfolio Manager Andrew Fleming

Debt Funded Buybacks: An Old Dog and Old Trick

A look at how companies are relying on an old trick to boost results.

Water & Wells
6/27/16
Heartland Advisors Value Investing Portfolio Manager Bradford A. Evans

Russell 2000® Value Rebalance: Creating an Expensive House in a Value Neighborhood

A look at how the Russell 2000® Value reconstitution may force value investors into expensive areas.

Water & Wells
6/14/16
Heartland Advisors Value Investing Portfolio Manager Andrew Fleming

Unwinding a Broken Clock

Recent strong performance by the Russell 2000® Value Index is an encouraging sign, but debt-fueled distortions remain.

Heartland in the News
6/18/16
Heartland Advisors Value Investing Portfolio Manager Andrew J. Fleming

Self-help Stories Driving Stock Selection

Portfolio Manager Andrew J. Fleming, CFA, discusses the importance of selecting stocks based on company-specific merits in a difficult macro environment driven by inconsistencies and slow growth.

Water & Wells
5/3/16
Heartland Advisors Value Investing Portfolio Manager Andrew Fleming

Inflation: Hiding in Plain Sight?

While Consumer Price Index readings have been mild, a look at raw materials suggests inflation may be lurking and could affect profit margins in the near-term.

Performance*

Average Annual Total Returns
  • Quarter-End
  • Annual
3/31/2017

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Since Inception (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD (%)QTD (%)
Small Cap Value Plus Composite (Net of Advisory Fees)**6.95-7.08-0.2926.09-0.89-0.89
Small Cap Value Plus Composite (Net of Bundled Fees)5.94-6.39-0.7925.45-1.01-1.01
Russell 2000® Value7.79-12.547.6229.37-0.13-0.13


2016 (%)

2015 (%)

2014 (%)

2013 (%)

2012 (%)

2011 (%)

2010 (%)

2009 (%)

2008 (%)

Small Cap Value Plus Composite (Net of Advisory Fees)**

26.76-16.38

-2.85

33.03

14.79

-5.17

28.63

24.59

-20.81

Small Cap Value Plus Composite (Net of Bundled Fees)

26.13-16.84

-3.34

32.39

13.09

-6.56

27.10

23.11

-21.75

Russell 2000® Value

31.74-7.47

4.22

34.52

18.05

-5.50

24.50

20.58

-28.92

*Source: FactSet Research Systems Inc., Russell Investment Group, and Heartland Advisors, Inc. Performance data is preliminary. YTD and QTD returns are not annualized. The Strategy's inception date is 11/30/2007.**Shown as supplemental information.

Commentary

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3/31/17
Heartland Advisors Small Cap Value Plus Strategy Portfolio Manager Commentary

Heartland Small Cap Value Plus Strategy 1Q17 Portfolio Manager Commentary

Optimism that drove the market toward the end of 2016 continued, but enthusiasm tempered as the quarter wore on.

Performance

Portfolio Composition
3/31/2017

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Weighted Average Market Cap ($)Median Market Cap ($)Trailing 1-Year Turnover (%)
Small Cap Value Plus Composite2.2 billion1.7 billion100.6
Russell 2000® Value2.1 billion698 million-

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

Valuation Analysis
Equity securities only, weighted median unless otherwise noted

3/31/2017

Source: FactSet Research Systems Inc., Russell Investment Group, and Heartland Advisors, Inc.
*Weighted average

Heartland Advisors Small Cap Value Plus Strategy Valuation Analysis Charts 1Heartland Advisors Small Cap Value Plus Strategy Valuation Analysis Charts 2

Sector Allocation

3/31/2017

Source: FactSet Research Systems Inc., and Russell Investment Group
Composite statistics shown as a percentage of equity investments

Heartland Advisors Small Cap Value Plus Strategy Sector Charts 1Heartland Advisors Small Cap Value Plus Strategy Sector Charts 2

Top 10 Holdings in a Representative Account
3/31/2017

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TickerHolding% of AccountIndustry
PKEPark Electrochemical Corp.3.46Electronic Equipment & Instruments
CBFCapital Bank Financial Corp.3.23Commercial Banks
MDUMDU Resources Group, Inc.2.87Multi-Utilities
OBOneBeacon Insurance Group, Ltd.2.82Insurance
ASBAssociated Banc-Corp2.69Commercial Banks
ZIONZions Bancorporation2.69Commercial Banks
FCFSFirstCash, Inc.2.47Consumer Finance
BHEBenchmark Electronics, Inc. 2.45Electronic Equipment & Instruments
BOOMDMC Global Inc.2.40Machinery
TRSTriMas Corporation2.34Machinery
% of Total Net Assets27.42

Attribution & Contribution

3/31/2017

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

5-Year Risk Analysis

3/31/2017

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Small Cap Value Plus Composite (Net of Advisory Fees)-5.1815.521.04-0.970.4591.59119.8587.0295.20
Russell 2000® Value0.0013.921.000.000.89100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group
Alpha, beta, and information ratio are versus the Russell 2000® Value Index.

The above performance, portfolio composition, and risk analysis data is preliminary.

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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

Past performance does not guarantee future results. Performance represents past performance, and current returns may differ.

Heartland Advisors, Inc. (the "Firm") claims compliance with the Global Investment Performance Standards (GIPS®). The Firm is a wholly owned subsidiary of Heartland Holdings, Inc., and is registered with the Securities and Exchange Commission. For a complete list and description of Heartland Advisors composites and/or a presentation that adheres to the GIPS® standards, contact the Institutional Sales Team at Heartland Advisors.

The U.S. dollar is the currency used to express performance.

The inception date for the Small Cap Value Plus Strategy is 11/30/2007.

The Small Cap Value Plus Strategy 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.

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

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.

Representative account chosen based on composite membership, not on performance-based criteria. Other accounts within the strategy may have different holdings.

Representative account holdings are preliminary, may not be reconciled, and may be updated when reconciled.

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

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

CFA® is a registered trademark owned by the CFA Institute.

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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