Small Cap Value Fund | KVALX

Fact Sheet 9/30/22

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Highlights

  • Seeks to identify companies across the value spectrum that have favorable cash flow values relative to their current market value.
  • Aim to identify a portfolio of companies that demonstrate valuations below and growth characteristics at or above those of the benchmark.
  • Fundamental, bottom-up investment approach, investigated by a team of research analysts solely focused on small- to-mid-capitalization equities; market timing is not a focus.
  • Risk management is sought through diversification of holdings.

 

Diversification does not assure a profit, nor protect against loss in a declining market.

The Value Investment Philosophy at Kennedy

We believe the operating cash-flow returns of a business provide a useful measure of corporate performance.  Reinvesting cash-flow into high-return projects creates a powerful compounding effect, creating value for shareholders overtime. 

We work to identify companies that are able to reinvest in their businesses at attractive rates of return, and invest in those companies at prices we believe don’t adequately reflect the potential value creation from those investments.

We focus on cash-flow return on investment (CFROI®) as a more insightful way to evaluate corporate performance, deriving inputs for discounted cash-flow based tools to build a better estimate of stock valuation.  Heavy emphasis is placed on quality of management. We believe that our long-standing industry expertise allows us to contextualize observations better than many of our peers. This labor intensive, bottom-up approach, combined with discounted cash-flow analysis, forms the basis for our investment processes.

 

*ROIC - Return on Invested Capital

Cash Flow Return On Investments (CFROI) is the ratio of gross cash flow to gross investments, translated into an internal rate of return. CFROI® is a registered trademark in the United States and other countries (excluding the United Kingdom) of Credit Suisse First Boston or its subsidiaries or affiliates.

Value Investment Process

The sector groups referenced are combinations of GICS sectors used to illustrate the way in which KCM divides sector and industry group coverage amongst its research analyst team. For the purposes of this piece, “Consumer” includes the GICS sectors Consumer Staples and Consumer Discretionary; “Technology” includes the Information Technology sector; other sectors have been grouped together as displayed.

Kennedy Capital Small Cap Fund Facts

  • Objective: The Fund investment objective is capital appreciation.
  • Portfolio Managers: Frank Latuda, Jr., CFA® & McAfee Burke, CFA®
  • Ticker Symbol: KVALX
  • CUSIP: 46144X503
  • Share Class: Institutional
  • Inception Date: 04/27/2022
  • Investment style: U.S. Domestic Small Cap Value Equity 
  • Minimum Initial Investment: $50,000
  • Expense Ratios: Gross 1.45% | Net 0.89%
  • Management Fee: 0.82%
  • Benchmark: Russell 2000® Value 

Fact Sheet 9/30/22

 

The Fund’s advisor has contractually agreed to waive its fees and/or pay for operating expenses of the Fund to ensure that total annual fund operating expenses do not exceed 0.89% of the average daily net assets of the Institutional Class, exclusive of certain expenses identified in the Fund’s prospectus. This agreement is in effect until April 30th, 2023 and it may be terminated before that date only by the Trust’s Board of Trustees. The Fund’s advisor is permitted to seek reimbursement from the Fund of fees waived or payments made to the Fund for a period ending three full years after the date of the waiver or payment, subject to limitations described in the prospectus.

About Kennedy Capital

Kennedy Capital Management is a boutique investment firm focused on a goal of generating attractive returns in the small and mid-cap domestic equity markets for our clients since 1980. Led by our Director of Research, our centralized research team uses a detail-oriented, bottom-up proprietary research process driven by a team of more than a dozen sector-specific analysts. We believe this level of specialization provides a competitive advantage allowing us to regularly capitalize on overlooked opportunities. We are an independent and 100% employee-owned investment adviser.  

Not FDIC Insured. No Bank Guarantee. May Lose Value. Distributed by IMST Distributors, LLC 

Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the fund's full Prospectus and Summary ProspectusPlease read carefully before investing.

Month-End Returns
as of 11/30/2022
CumulativeAnnualized
1 MonthQuarter-to-DateYear-to-DateSince Inception
(04/27/2022)
1 YearSince Inception
(04/27/2022)
Small Cap Value Fund
(I-Share Class)
4.00%18.20%-6.50%--
RUSSELL 2000® VALUE3.06%16.03%-0.70%--

Quarter-End Returns as of
9/30/2022
CumulativeAnnualized
1 MonthQuarter-to-DateYear-to-DateSince Inception
(04/27/2022)
1 YearSince Inception
(04/27/2022
Small Cap Fund
(I-Share Class)
-8.34%-3.01%--9.90%--
RUSSELL 2000® VALUE-10.19%-4.61%--13.21%--

The performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. For the most recent month-end performance, please call (833) 737-7788. Cumulative performance may not be indicative of the Fund’s long-term potential. The Fund returns will fluctuate over long and short-term period. Periods over one year are annualized.

Expense ratio as of most recent prospectus is 1.45% (gross) / 0.89% (net). The net expense ratio reflects the contractual agreement to waive fees and/or pay operating expenses until April 30th, 2023. The net expense ratio ensures total annual fund operating expenses do not exceed 0.89% (exclusions exist) until April 30th, 2023.

The Fund’s advisor has contractually agreed to waive its fees and/or pay for operating expenses of the Fund to ensure that total annual fund operating expenses do not exceed 0.89% of the average daily net assets of the Institutional Class, exclusive of certain expenses identified in the Fund’s prospectus. This agreement is in effect until April 30th, 2023 and it may be terminated before that date only by the Trust’s Board of Trustees. The Fund’s advisor is permitted to seek reimbursement from the Fund of fees waived or payments made to the Fund for a period ending three full years after the date of the waiver or payment, subject to limitations described in the prospectus.

The Russell 2000® Value Index measures the performance of the small cap segment of the U.S. equity universe, commonly referred to as “small” cap. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.  You cannot invest directly into an index.

Not FDIC Insured. No Bank Guarantee. May Lose Value. Distributed by IMST Distributors, LLC

Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the fund's full Prospectus and Summary Prospectus. Please read carefully before investing.

Risk Management

The Fund is generally managed on a sector neutral basis with modest over- and under-weights as compared to the Index, driven by bottom-up stock selection.  The fund seeks to manage investment risk by maintaining broad issuer and industry diversification among the Fund’s holdings, and by utilizing fundamental analysis of risk/return characteristics in the security selection process.

Sell Discipline

The Advisor may sell all or a portion of a position of the Fund’s portfolio holding when in its opinion one or more of the following occurs, among other reasons:

  • When our dynamic assessment of intrinsic value indicates other opportunities are more compelling
  • Deviation from the thesis and milestones established when a position was established
  • Changes to the macro or competitive environment

Important Information:  Equity securities (stocks) are generally more volatile and carry more risk than fixed income securities (bonds) and money market investments. The net asset value per share of the Small Cap Value fund (the Fund) will fluctuate as the value of the securities in the portfolio changes. Common stocks, and funds investing in common stocks, generally provide greater returns over long time periods than fixed income securities. The Fund is comprised primarily of equity securities and is subject to market risk. Stocks may decline due to general market and economic conditions or due to company specific circumstances. The Fund is comprised of small capitalization (“small cap”) stocks. Small cap stocks typically carry additional risk, since smaller companies generally have a higher risk of failure, and historically have experienced a greater degree of volatility. Small capitalization companies generally have a greater risk of failure, and their stocks generally have greater volatility, than large companies. large companies. Value investing is subject to
the risk that the market will not recognize a security’s inherent value for a long time or at all. The Fund is newly organized and thus has no track record of its own on which to base an investment decision. Mutual fund investing involves risk, including loss of principal.

Not FDIC Insured. No Bank Guarantee. May Lose Value. Distributed by IMST Distributors, LLC 

Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the fund's full Prospectus and Summary ProspectusPlease read carefully before investing.

Data as of 9/30/22

Portfolio Managers

Frank Latuda, Jr., CFA®
Portfolio Manager

  • 30 years of industry experience
  • Joined KCM as a Research Analyst in 1997
  • Chief Investment Officer
  • Chairman of the Investment Policy Committee
  • B.S. in Electrical Engineering, University of Notre Dame
  • M.S. in Electrical Engineering and an M.B.A. from the University of Illinois

McAfee Burke, CFA®
Portfolio Manager

  • 17 years of industry experience
  • Joined KCM as a Research Analyst in 2015
  • B.A. in Economics and Spanish from Bowdoin College

Top 10 Holdings 

Company Name% of Assets
Home BancShares, Inc.1.8
Wintrust Financial Corporation1.8
Valmont Industries, Inc.1.7
First Interstate BancSystem, Inc.1.6
Northern Oil and Gas, Inc.1.5
Alamo Group, Inc.1.5
National Bank Holdings Corporation1.5
Regal Rexnord Corporation1.4
Stifel Financial Corporation1.3
Addus HomeCare Corporation1.3

Top 10 Sector Weightings1

SectorKVALXRUSSELL 2000® VALUE
Financials27.0%29.1%
Industrials15.4%12.4%
Real Estate10.2%10.5%
Consumer Discretionary9.6%9.7%
Health Care9.2%12.0%
Information Technology7.5%5.8%
Energy5.6%5.7%
Materials4.5%3.8%
Utilities3.0%5.2%
Consumer Staples1.8%2.7%

The holdings and weightings are subject to change.

Characteristics

 KVALXRUSSELL 2000® VALUE
Weighted Average Market Cap ($M)23,0592,089
Forecasted Price/Earnings Ratio (Fiscal Year 2)(x)3 9.313.4
Price to Book (x)42.01.4
Price to Sales (x)52.32.5
LT Debt/Total Capital (%)633.133.2
Return-on-Equity (%)712.06.7

Source: FactSet Research Systems, Inc.

1.) Based on Global Industry Classification Standard (GICS), which was developed by and is the exclusive property and a service mark of MSCI Inc. (MSCI) and Standard & Poor's, a division of The McGraw-Hill Companies, Inc. (S&P). Excludes cash.
2.) The weighted average market capitalization is a stock market index constructed on the market capitalization of individual stocks.
3.) The price to earnings (P/E) ratio is defined as a ratio for valuing a company that measures its current share price relative to its per share earnings.
4.) The price to book (P/B) ratio is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.
5.) The price to sales (P/S) ratio is a valuation ratio that compares a company’s stock price to its revenues.
6.) The long-term debt to total capitalization is a ratio showing the financial leverage of a firm, calculated by dividing long term debt by the amount of capital available.
7.) Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity.

The Russell 2000® Value Index measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000® Value Index is constructed to provide a comprehensive and unbiased barometer for the small-cap value segment. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set and that the represented companies continue to reflect value characteristics. You cannot invest directly into an index.

Not FDIC Insured. No Bank Guarantee. May Lose Value. Distributed by IMST Distributors, LLC 

Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the fund's full Prospectus and Summary ProspectusPlease read carefully before investing.

Not FDIC Insured. No Bank Guarantee. May Lose Value. Distributed by IMST Distributors, LLC 

Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the fund's full Prospectus and Summary ProspectusPlease read carefully before investing.

For more information about Kennedy Capital Management’s strategies and investment management services, call (833) 737-7788 or send us an email at funds@kennedycapital.com.

Not FDIC Insured. No Bank Guarantee. May Lose Value. Distributed by IMST Distributors, LLC 

Investors should consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the fund's full Prospectus and Summary ProspectusPlease read carefully before investing.