Heartland Opportunistic Value Equity Strategy

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

Overview

Investment Focus

Dynamically pursues the best opportunities regardless of market capitalization

Distinguishing Characteristics

  • Multi-cap portfolio that typically invests in stocks with market capitalization of $500 million or greater
  • Designed for investors who seek diversification through an all-cap approach
  • Benchmarked to the Russell 3000® Value Index
  • Typically holds 30-50 stocks
  • Inception date: 1999

Investment Minimum & Standard Fee Schedule

Minimum: $500,000

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 Opportunistic Value Equity Strategy

34 years of industry experience
23 years of experience at Heartland

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Will Nasgovitz

Nasgovitz is CEO and Portfolio Manager of the Select Value and Mid Cap Value Funds and their corresponding separately managed account strategies. He also is CEO of Heartland Funds. He has 18 years of industry experience, 14 at Heartland.

Colin McWey

McWey, CFA, is Vice President and Portfolio Manager of the Select Value and Mid Cap Value Funds and their corresponding separately managed account strategies. He has 16 years of industry experience, 9 at Heartland.

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News & Investing Perspectives

Water & Wells
10/19/18
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Yield: Pumping the Brakes on Growth Stocks

Why yields on the 10-year Treasury may be welcome news to value investors.

Water & Wells
8/14/18
Heartland Advisors value investing Portfolio Manager Will Nasgovitz

Tripped up by a Low Hurdle

How low interest rates have led to a surge of money losing companies, and what that may mean as interest rates move higher.

Heartland in the News
6/27/18
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Kick-Starting a Trade War?

As tweets, tariffs, and trade wars dominate news headlines—Portfolio Manager Colin McWey, CFA, shares his perspective on the uncertainty created for a well-known motorcycle manufacturer.

Heartland in the News
6/26/18
Heartland Advisors Value Investing Portfolio Manager Colin McWey

5 Names for Avoiding a Debt Wreck

After nearly a decade-long borrowing binge, the Federal Reserve is recommending a diet for corporate America. Portfolio Manager Colin McWey, CFA, offers his take on a low-debt holding.

PM Perspective
5/18
Heartland Advisors value investing portfolio manager Colin McWey

Cash Flow: An Equalizing Force in Analysis

Cash flow helps us evaluate opportunities on an apples to apples basis regardless of industry or debt.

Heartland in the News
5/22/18
Heartland Advisors Value Investing Portfolio Manager Colin McWey, CFA

Will a Surge in Oil Prices Fuel Opportunities in Energy?

A potential upswing in the Energy sector as oil prices continue to rise. Portfolio Manager Colin McWey, CFA, weighs in.

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Video
5/18 - 2:40

Banking Forecast: Holding, with a Chance of Headwinds

After a multi-year run, banks may be facing a rougher road ahead.

Heartland in the News
5/10/18

Opportunities Arriving by Sea and Sky?

Portfolio Managers Will Nasgovitz and Colin McWey, CFA share their stock picks for the long days of summer.

PM Perspective
4/18

Why Catalysts and Context Matter

The difference between an unloved laggard and an attractive investment opportunity often begins with perception. Here is a look at internal catalysts and their importance in changing investors’ views and company results.

Heartland in the News
2/12/18

Signs to Follow During the Market Detour

Portfolio Manager Colin McWey, CFA, was interviewed about whether the worst is over given recent volatility.

Water & Wells
2/6/18

Normal is Dead, Long Live Normal!

The return of volatility could provide opportunities for active investors going forward.

Heartland in the News
1/25/18

Heartland CEO: Record Market Highs Haven’t Dried the River of Value

Will Nasgovitz was interviewed about the current environment for value investors.

Water & Wells
1/23/18

Value—it’s the Real Thing

Why the value versus growth debate is about more than the investment flavor of the day.

Video
12/17 - 3:05

Follow at Your Own Risk

How ETF investors may be leaving money on the table in unloved sectors.

Performance*

Average Annual Total Returns
  • Quarter-End
  • Annual
9/30/2018

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Since Inception (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD (%)QTD (%)
Opportunistic Value Equity Composite (Net of Advisory Fees)**10.499.379.7015.7514.547.984.96
Opportunistic Value Equity Composite (Net of Bundled Fees)8.397.257.5713.5012.346.414.46
Russell 3000® Value7.309.7610.6513.759.464.175.39

 

2017 (%) 2016 (%)

2015 (%)

2014 (%)

2013 (%)

2012 (%)

2011 (%)

2010 (%)

2009 (%)

2008 (%)

2007 (%)

2006 (%)

2005 (%)

Opportunistic Value Equity Composite (Net of Advisory Fees)**

13.63 18.83 -4.05

4.02

34.59

13.43

-7.88

17.51

35.82

-32.38

4.62

13.93

14.90

Opportunistic Value Equity Composite (Net of Bundled Fees)

11.40 16.52 -5.92

1.99

32.00

11.25

-9.70

15.24

33.23

-33.64

2.62

11.80

12.80

Russell 3000® Value

13.19 18.40 -4.13

12.70

32.69

17.55

-0.10

16.23

19.76

-36.25

-1.01

22.34

6.85

 

*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 9/30/1999.
**Shown as supplemental information.

Commentary

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9/30/18
Heartland Opportunistic Value Equity Strategy Portfolio Manager Commentary

Heartland Opportunistic Value Equity Strategy 3Q18 Portfolio Manager Commentary

Employment and corporate earnings remained robust, but building headwinds stoked debate about whether the economy was entering a new phase.

Portfolio Composition

Characteristics
9/30/2018

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Weighted Average Market Cap ($)Median Market Cap ($)Trailing 1-Year Turnover (%)
Opportunistic Value Equity Composite106.6 billion14.7 billion42.3
Russell 3000® Value117.0 billion1.8 billion-

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

Valuation Analysis
Equity securities only, weighted harmonic average unless otherwise noted

9/30/2018

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

Heartland Opportunistic Value Equity Strategy valuations 1Heartland Advisors Opportunistic Value Equity Strategy Valuation Analysis Charts 2

Sector Allocation

9/30/2018

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

Heartland Advisors Opportunistic Value Equity Strategy Sector Charts 1Heartland Advisors Opportunistic Value Equity Strategy Sector Charts 2

Top 10 Holdings in a Representative Account
9/30/2018

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TickerHolding% of AccountIndustry
BRK/BBerkshire Hathaway, Inc. (Class B)4.66Diversified Financial Services
WFCWells Fargo & Co.4.01Banks
XOMExxon Mobil Corp.3.43Oil Gas & Consumable Fuels
PFEPfizer, Inc.3.41Pharmaceuticals
SLBSchlumberger, Ltd. 3.40Energy Equipment & Services
EXCExelon Corporation3.05Electric Utilities
CSCOCisco Systems, Inc.3.02Communications Equipment
ESRXExpress Scripts Holding Co.2.94Health Care Providers & Services
CVSCVS Health Corp.2.91Health Care Providers & Services
KEXKirby Corp.2.74Marine
% of Total Net Assets33.57

Security-Level Attribution & Contribution

9/30/2018

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5-Year Risk Analysis

9/30/2018

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Opportunistic Value Equity Composite (Net of Advisory Fees)-1.2410.881.05-0.230.85102.54114.1486.2586.97
Russell 3000® Value0.009.641.000.001.05100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group
Alpha, beta, and information ratio are versus the Russell 3000® Value Index.

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

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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

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 Opportunistic Value Equity Strategy is 9/30/1999.

In addition to stocks of large companies, the Opportunistic Value Equity Strategy invests in stocks of small- and mid-cap companies that are generally less liquid than large companies. The performance of these holdings generally will increase the volatility of the strategy’s returns.

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 are sourced from GICS®.The Global Industry Classification Standard (GICS®) is the exclusive intellectual property of MSCI Inc. (MSCI) and S&P Global Market Intelligence (“S&P”).  Neither MSCI, S&P, their affiliates, nor any of their third party providers (“GICS Parties”) makes any representations or warranties, express or implied, with respect to GICS or the results to be obtained by the use thereof, and expressly disclaim all warranties, including warranties of accuracy, completeness, merchantability and fitness for a particular purpose.  The GICS Parties shall not have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of such damages.

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. Certain outliers may be excluded. Any forecasts may not prove to be true.

Economic predictions are based on estimates and are subject to change.

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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