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

Small Cap Value Plus Strategy Quick Links

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Portfolio Management Team

Heartland Advisors Small Cap Value Plus Strategy Portfolio Management Team

33 years of industry experience
27 years of experience at Heartland

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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 10 years of industry experience, 7 at Heartland.

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 23 years of industry experience, 20 at Heartland.

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News & Investing Perspectives

Water & Wells
11/12/2018
Heartland Advisors Value Investing Portfolio Manager Bradford A. Evans

Challenges of a Post-Peak World

A look at how inflecting profit margins may ratchet up risk for borrowers.

Heartland in the News
10/19/18
Heartland Advisors Value Investing Portfolio Manager Andrew Fleming

Why Fundamentals are Key to Navigating Today’s Cross Currents

Portfolio Manager Andrew J. Fleming, CFA, shares how a conflicted macro backdrop has spurred investors to once again chase momentum.

Performance*

Average Annual Total Returns
  • Quarter-End
  • Annual
6/30/2019

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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)**6.7510.191.9111.65-4.3418.293.70
Small Cap Value Plus Composite (Net of Bundled Fees)5.839.321.4011.09-4.8218.013.58
Russell 2000® Value6.8412.405.399.81-6.2413.471.38

 

2018 (%) 2017 (%) 2016 (%)

2015 (%)

2014 (%)

2013 (%)

2012 (%)

2011 (%)

2010 (%)

2009 (%)

2008 (%)

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

-13.16 9.79 26.76 -16.28

-2.85

33.03

14.79

-5.17

28.61

24.59

-20.81

Small Cap Value Plus Composite (Net of Bundled Fees)

-13.61 9.23 26.13 -16.71

-3.34

32.39

13.10

-6.57

27.13

23.13

-21.78

Russell 2000® Value

-12.86 7.84 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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6/30/19
Heartland Advisors Small Cap Value Plus Strategy Portfolio Manager Commentary

Heartland Small Cap Value Plus Strategy 2Q19 Portfolio Manager Commentary

A skittish tone to the markets drove volatility higher and provided opportunities for active managers to harvest gains and deploy capital into overlooked opportunities.

Performance

Portfolio Composition
6/30/2019

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Weighted Average Market Cap ($)Median Market Cap ($)Trailing 1-Year Turnover (%)
Small Cap Value Plus Composite2.3 billion1.9 billion65.6
Russell 2000® Value2.2 billion696 million-

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

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

6/30/2019

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

6/30/2019

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
9/30/2019

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TickerHolding% of AccountIndustry
POWLPowell Industries, Inc.4.59Electrical Equipment
THGThe Hanover Insurance Group Inc.4.03Insurance
DRQDril-Quip, Inc.3.89Energy Equipment & Services
PORPortland General Electric Co.3.72Electric Utilities
PKEPark Electrochemical Corp3.39Aerospace & Defense
NRNewpark Resources, Inc.3.08Energy Equipment & Services
AVDAmerican Vanguard Corp.3.04Chemicals
PCHPotlatchDeltic Corp. 2.98Equity Real Estate Investment Trusts (REITs)
GOLFAcushnet Holdings Corp.2.93Leisure Products
WIREEncore Wire Corp.2.91Electrical Equipment
% of Total Net Assets34.56

Security-Level Attribution & Contribution

6/30/2019

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

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5-Year Risk Analysis

6/30/2019

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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)-3.2717.611.03-0.620.0691.17106.5989.9095.69
Russell 2000® Value0.0016.281.000.000.28100.00100.00100.000.00

*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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©2019 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 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.

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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