Heartland International Value Fund

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

HINVX, HNNVX

Overview

Investment Focus

Seeks long-term capital appreciation by investing in small- and mid-cap international companies, with an emphasis on dividends

Distinguishing Characteristics

  • Invests in dividend paying stocks with a market capitalization of less than $5 billion with no more than 35% of assets held in any one country
  • Designed for investors who seek a portfolio of small- to medium-sized international companies
  • Benchmarked to the Russell Global® ex-US Small Cap Index
  • Typically aims to hold 40-60 stocks
  • Inception date: 2010

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

3/31/2018

Benchmark: Russell Global® ex-US Small Cap Index

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Investor Class Institutional Class
Ticker HINVXHNNVX
CUSIP 422352823422352781
Inception Date 10/01/201010/01/2010
Assets $7 million$21 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 90 days of purchase

Annual Fund Operating Expenses

Paid annually as a percentage of total investment value*

  Investor
Class (%)
Institutional
Class (%)
Management Fee 0.85 0.85   
12b-1 Distribution Fee 0.25 0.00   
Other Expenses 0.74 0.60   
Total Annual Fund Operating Expenses 1.84 1.45   
Fee Waiver and/or Expense Reimbursement -0.59 -0.46   
Total Annual Fund Operating Expenses After Fee Waiver and/or Expense Reimbursement** 1.25 0.99   


*As stated in the prospectus (pdf) dated 5/1/2018
**Pursuant to an operating expense limitation agreement between the Fund’s investment advisor, Heartland Advisors, and Heartland Group, Inc., on behalf of the International Value Fund, Heartland Advisors has agreed to waive its management fees and/or reimburse expenses of the Fund to ensure that Total Annual Fund Operating Expenses (excluding front-end or contingent deferred sales loads, taxes, leverage, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization, dividends or interest expenses on short positions, acquired fund fees and expenses or extraordinary expenses) do not exceed 1.25% of the Fund’s average daily net assets for the Investor Class Shares and 0.99% for the Institutional Class Shares through at least May 1, 2019, and subject to annual re-approval of the agreement by the Funds' Board of Directors, thereafter. The operating expense limitation agreement may be terminated only by, or with the consent of, the Funds’ Board of Directors.

Overall Morningstar Rating™ in Foreign Small/Mid Value Category

  • Investor Class
  • Institutional Class
1Overall Morningstar Rating™ as of 5/31/2018, out of 57 Foreign Small/Mid Value funds, based on risk-adjusted performance for investor class shares
1Overall Morningstar Rating™ as of 5/31/2018, out of 57 Foreign Small/Mid Value funds, based on risk-adjusted performance for institutional class shares

Portfolio Management Team

Heartland International Value Fund Portfolio Management Team

48 years of industry experience
12 years of experience at Heartland

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Michael Jolin

Jolin, CFA, is Vice President and Portfolio Manager for the Heartland International Value Fund. He has 14 years of industry experience, 8 at Heartland.

Robert C. Sharpe

Sharpe is Vice President and Portfolio Manager of the International Value Fund. He has 34 years of industry experience, 4 at Heartland.

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Investing Perspectives

Video
2/18 - 1:59
Heartland Advisors Value Investing Portfolio Manager Robert C. Sharpe

Are Boardrooms Boosting the Case for Japan?

How independent voices could boost valuations and returns for investors in Japan.

PM Perspective
9/17
Heartland Advisors Value Investing Portfolio Manager Robert Sharpe

Are Emerging Markets Just Getting Started?

Here’s what skeptics may be overlooking when it comes to the staying power of emerging markets.

White Paper
9/17
Heartland Advisors International Value Investing White Paper

The Role Dividends Can Play in International Equity Investing

Domestic equity investors have long understood the importance of dividends, but their value when investing globally is often overlooked. In this paper, we explore the return and risk profiles of small- and mid-cap international stocks based on their dividend yields.

Performance

Average Annual Total Returns
  • Month-End
  • Quarter-End
  • Annual
5/31/2018

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
International Value
Investor Class
2.32---1.56-0.30-2.25-7.71-3.69
International Value
Institutional Class
2.37---1.64-0.17-2.05-7.53-3.59
Russell Global® ex-US Small Cap6.88---7.697.7014.13-0.280.06
*Not annualized
3/31/2018

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Since Inception (%)20-Year (%)15-Year (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD* (%)QTD* (%)
International Value
Investor Class
2.89---2.363.423.61-4.18-4.18
International Value
Institutional Class
2.93---2.433.533.92-4.09-4.09
Russell Global® ex-US Small Cap7.03---7.799.8219.33-0.34-0.34
*Not annualized
  2017 (%) 2016 (%) 2015 (%) 2014 (%) 2013 (%) 2012 (%) 2011 (%)
International Value Investor Class 19.04 9.54 -12.09 -3.76 12.05 26.97 -22.37
International Value Institutional Class  19.29 9.54 -12.19 -3.76 12.05 26.97 -22.37
Russell Global® ex-US Small Cap 30.49 5.04 0.50 -3.63 17.21 18.84 -18.68

 

Growth of a Hypothetical $10,000 Investment

3/31/2018

Since inception of the investor class, 10/1/2010 to 3/31/2018
Chart represents a hypothetical example of an investment in the International Value Fund representing historical returns

Heartland International Value Fund Growth of 10000 Chart

Morningstar Ratings™ in Foreign Small/Mid Value Category
  • Investor Class
  • Institutional Class
Morningstar Ratings TM
5/31/2018
RatingTotal Funds
Overall157
10-Year--
5-Year145
3-Year157
Morningstar Ratings TM
5/31/2018
RatingTotal Funds
Overall157
10-Year--
5-Year145
3-Year157

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 their initial public offering 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 5/1/2018, the Net Fund Operating Expenses for the investor and institutional classes of the International Value Fund are 1.25% and 0.99%, respectively. The Advisor has contractually agreed to waive its management fees and/or reimburse expenses of the Fund to ensure that Net Fund Operating Expenses for the Fund do not exceed 1.25% of the Fund’s average net assets for the investor class shares and 0.99% for the institutional class shares, through at least 5/1/2019, and subject thereafter to annual reapproval of the agreement by the Board of Directors. Without such waiver and/or reimbursements, the Gross Fund Operating Expenses would be 1.84% for the investor class shares and 1.45% for the institutional class shares.

The inception date for the International Value Fund is 10/1/2010 and 5/1/2017 for the institutional class.

Performance data quoted for periods prior to 10/1/2013 for the International Value Fund is that of the predecessor Fund (the Heartland International Value Fund a series of Trust for Professional Managers).

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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3/31/18
Heartland International Value Fund Portfolio Manager Commentary

Heartland International Value Fund 1Q18 Portfolio Manager Commentary

We view recent market turbulence as a temporary setback to what remains a sound economic backdrop.

Portfolio Composition

Characteristics

3/31/2018

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CharacteristicInternational ValueRussell Global® ex-US Small Cap
Holdings 48-
Assets $28 million-
Assets in Dividend-Paying Companies 90.1% -
Median Market Cap $971 million$847 million
Weighted Average Market Cap $1.5 billion$2.0 billion
Trailing 1-Year Turnover 45.5% -

Capitalization Breakdown
3/31/2018
Cap Range% of Equities in Portfolio
>$15 billion0.0
$2-15 billion24.6
$300 million-2 billion70.0
<$300 million5.4

The above breakdown does not include short-term investments.

Valuation Analysis
Equity securities only, weighted median unless otherwise noted

3/31/2018

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

Heartland International Value Fund Valuation Analysis Charts 1Heartland International Value Fund Valuation Analysis Charts 1

Sector Allocation

3/31/2018

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

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

Top 10 Holdings
3/31/2018

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TickerHoldingCountry% of Net AssetsIndustry
184 HKKeck Seng Investments LimitedHong Kong4.01Real Estate Management & Development
FOXT LNFoxtons Group PLCUnited Kingdom3.29Real Estate Management & Development
2385 TTChicony Electronics CO., Ltd. Taiwan3.23Technology Hardware Storage & Peripherals
DOC AVDO & CO AGAustria3.09Diversified Consumer Services
IPL AUIncitec Pivot LimitedAustralia3.04Chemicals
8369 JPBank of Kyoto, Ltd.Japan2.96Banks
6727 JPWACOM Co LtdJapan2.94Technology Hardware Storage & Peripherals
TOT CNTotal Energy Services Inc.Canada2.89Energy Equipment & Services
KRKG SVKrka, d. d.Slovenia2.78Pharmaceuticals
004370 KSNongshim CoSouth Korea2.75Food Products
% of Total Net Assets30.98

Country Allocation

3/31/2018

  International
Value Fund (%)
Russell Global®
ex-US Small Cap (%)
Japan          16.9                   22.8
United Kingdom          10.7                     8.9
South Korea          8.0                     5.2
Canada            7.6                     5.9
Austria            5.4                     0.5
Taiwan            5.2                     6.6
Brazil            4.8                     1.8
Germany            4.7                     2.7
United States            4.2                     0.3
New Zealand            3.9                     1.2
Australia            3.2                     5.0
China            3.1                     3.1
Slovenia            2.9                       -
France            2.8                     1.6
Sweden            2.6                     2.2
Netherlands            2.3 1.2
Ireland            2.0                     0.7
Colombia 1.9 <0.1
Italy 1.8 1.5
Sri Lanka 1.7 -
Hong Kong 1.7 3.2
Poland 1.7 0.8
Chile 0.9 0.4
Total % of Equity Investments        100.0                   75.6

 


Sector-Level Attribution

3/31/2018

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Security-Level Attribution & Contribution

3/31/2018

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5-Year Risk Analysis

  • Investor Class
  • Institutional Class
3/31/2018

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
International Value-4.5812.150.95-0.920.1778.72110.5776.7599.64
Russell Global® ex-US Small Cap0.0011.201.000.000.67100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group
Alpha, beta, and information ratio are versus the Russell Global® ex-US Small Cap. Depiction is for investor class shares.

3/31/2018

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
International Value-4.5812.150.95-0.920.1778.72110.5776.7599.64
Russell Global® ex-US Small Cap0.0011.201.000.000.67100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group
Alpha, beta, and information ratio are versus the Russell Global® ex-US Small Cap. Depiction is for institutional class shares.


Performance information for institutional class shares of Funds that existed prior to their initial public offering is based on the performance of investor class shares.

Distributions

  • Investor Class
  • Institutional Class
Record
Date
Payable
Date
                 Ordinary Dividend
($/share)
Short-Term Capital
Gain ($/share)
Long-Term Capital
Gain ($/share)
12/27/2017 12/28/2017   0.09617 - -
12/28/2016 12/29/2016   0.13541 - -
12/28/2015 12/29/2015   0.05090 - 0.08892
12/29/2014 12/23/2014   0.65792 - 0.11684
12/26/2013 12/27/2013   0.48676 - -
12/26/2012 12/27/2012   0.17798 - -
12/26/2011 12/28/2011   0.03972 - -

 

Record
Date
Payable
Date
                 Ordinary Dividend
($/share)
Short-Term Capital
Gain ($/share)
Long-Term Capital
Gain ($/share)
12/27/2017 12/28/2017   0.12896 - -

 

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©2018 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 International Value Fund invests primarily in small foreign companies selected on a value basis. Such securities generally are more volatile and less liquid than those of larger companies. Foreign securities have additional risk, including but not limited to exchange rate changes, political and economic upheaval, and relatively low market liquidity. These risks are magnified in emerging markets.

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

Information about Morningstar Ratings™ are ©2018 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 5/31/2018 Morningstar Ratings™: The Heartland International Value Fund investor class was rated against -, 45, and 57 U.S.-domiciled Foreign Small/Mid Value funds over the 10-, 5-, and 3-year periods and received -, 1, and 1 stars, respectively.
As of 5/31/2018 Morningstar Ratings™: The Heartland International Value Fund institutional class was rated against -, 45, and 57 U.S.-domiciled Foreign Small/Mid Value funds over the 10-, 5-, and 3-year periods and received -, 1, and 1 stars, respectively.

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.

Foreign country classifications are generally determined by referencing country of risk sourced from FactSet Research Systems Inc. and Heartland Advisors, Inc.

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.

The above individual is a registered representative of ALPS Distributors, Inc.

The Heartland Funds are distributed by ALPS Distributors, Inc.

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