Hotchkis & Wiley Funds
725 South Figueroa Street, 39th Floor
Los Angeles, CA 90017-5439
December 24, 2015
Mr. Edward Bartz
Securities and Exchange Commission
Division of Investment Management
100 F Street, N.E.
Washington, D.C. 20549
| | Re: | Hotchkis & Wiley Funds (the “Trust”) |
File Nos.: 333-68740 and 811-10487
Dear Mr. Bartz:
The purpose of this letter is to respond to oral comments received by representatives of U.S. Bancorp Fund Services, LLC, from the Securities and Exchange Commission (“SEC”) Staff (the “Staff”) on November 23, 2015 regarding the Trust’s Post-Effective Amendment (“PEA”) No. 38 to the Trust’s Registration Statement on Form N-1A. PEA No. 38 was filed pursuant to Rule 485(a) under the Securities Act of 1933, as amended (the “1933 Act”), on Form N-1A on October 13, 2015, for the purpose of registering shares of a new series of the Trust – the Hotchkis & Wiley International Value Fund (the “Fund”).
The Trust will file PEA No. 39 to its Registration Statement under Rule 485(b) of the 1933 Act. The purpose of that filing will be to add certain financial information, update any missing information, incorporate responses to the Staff’s comments regarding PEA No. 38 and file updated exhibits to the Registration Statement.
In connection with this response to the Staff’s comments, the Trust, on behalf of the Fund, hereby states the following:
| 1. | The Trust acknowledges that in connection with the comments made by the Staff on the Form N-1A Registration Statement, the Staff has not passed generally on the accuracy or adequacy of the disclosure made in the Registration Statement; |
| 2. | The Trust acknowledges that the Staff’s comments or changes to disclosure in response to the Staff’s comments do not foreclose the SEC from the opportunity to seek enforcement or take other action with respect to the disclosure made therein; and |
| 3. | The Trust represents that neither it nor its management will assert the Staff’s comments or changes in disclosure in response to the Staff’s comments as a defense in any action or proceeding by the SEC or any person. |
Mr. Edward Bartz
Securities and Exchange Commission
December 24, 2015
Page 2 of 3
For your convenience, the Staff comments have been reproduced in bold typeface and are immediately followed by the Trust’s responses.
1. Prospectus – Summary Section – Fees and Expenses of the Fund
Staff Comment: In the Fees and Expenses table, please move the location for footnote “C” from the “Total Annual Fund Operating Expenses after Fee Waiver and/or Expense Reimbursement” line item to the “Fee Waiver and/or Expense Reimbursement” line item.
Response: The Trust will make the requested change.
| 2. | Prospectus – Fund Summary – Fees and Expenses of the Fund |
Staff Comment: Please file the Operating Expense Limitation Agreement via EDGAR submission.
Response: The Trust confirms that it will file the Amended and Restated Operating Expense Limitation Agreement with PEA No. 39 to its Registration Statement.
| 3. | Prospectus – Fund Summary – Principal Investment Strategy |
Staff Comment: In the first paragraph of the “Principal Investment Strategy” section, please present the list of criteria which the Advisor uses to determine whether a company is considered to be a “non-U.S. company” in a more reader-friendly format.
Response: The Trust responds by revising the language to add Roman numerals to clearly separate each individual item:
“The Fund seeks to achieve its objective by investing primarily in non-U.S. companies, which may include companies located or operating in developed or emerging markets. The Advisor determines where a company is located, and thus whether a company is located outside the U.S. or in an emerging market, by referring to: (i) its primary stock exchange listing; (ii) where it is registered, organized or incorporated; (iii) where its headquarters are located; (iv) where it derives at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed; or (v) where at least 50% of its assets are located.”
Mr. Edward Bartz
Securities and Exchange Commission
December 24, 2015
Page 3 of 3
| 4. | Prospectus – Fund Summary – Principal Investment Strategy |
Staff Comment: Staff Comment: Please confirm whether the Fund expects to incur “Acquired Fund Fees and Expenses” (“AFFE”) in an amount equal to or in excess of 0.01% of the Fund’s average net assets during its initial year of investment operations, and if so then please revise the Fees and Expenses table accordingly.
Response: The Trust supplementally confirms that the Fund does not expect to incur AFFE in an amount equal to or in excess of 0.01% of its average net assets during its initial year of investment operations, and as such no further disclosure is required.
| 5. | Prospectus – Shareholder Services – How to Buy, Sell, Transfer and Exchange Shares – Important Information for You to Know – Sell Through the Transfer Agent |
Staff Comment: In the second paragraph, please move the $15 wire redemption fee to the Fund Summary – Fees and Expenses table.
Response: The Trust responds by referring to Instructions 2(b) and 2(d) of Item 3 of Form N-1A. A wire redemption fee is not “charged for any redemption of the Fund’s shares,” but is instead a fee that applies “to only a limited number of shareholders based on their particular circumstances.” Because this fee only applies if a shareholder requested that redemption proceeds be sent via federal wire, as opposed to by check or via ACH, the Trust believes that the $15 wire fee does not need to be disclosed in the Fund Fees and Expenses table.
* * * * * *
If you have any questions regarding the enclosed, please do not hesitate to contact Edward Paz of U.S. Bancorp Fund Services at (414) 765-5366.
Very truly yours,
/s/Anna Marie Lopez
Anna Marie Lopez
President
Hotchkis & Wiley Funds
cc: Joseph Mannon, Vedder Price P.C.
