UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-10487
Hotchkis & Wiley Funds
(Exact name of registrant as specified in charter)
601 South Figueroa Street, 39th Floor
Los Angeles, California 90017-5704
(Address of principal executive offices) (Zip code)
Anna Marie Lopez
Hotchkis & Wiley Capital Management, LLC
601 South Figueroa Street, 39th Floor
Los Angeles, California 90017-5704
(Name and address of agent for service)
Copies to:
Maureen A. Miller, Esq.
Joseph M. Mannon, Esq.
Vedder Price P.C.
222 North LaSalle Street, 26th Floor
Chicago, Illinois 60601
(Counsel for the registrant)
(213) 430-1000
Registrant's telephone number, including area code
Date of fiscal year end: June 30, 2021
Date of reporting period: June 30, 2021
Item 1. Reports to Stockholders.
Hotchkis & Wiley Funds
Annual Report
JUNE 30, 2021
DIVERSIFIED VALUE FUND
LARGE CAP VALUE FUND
MID-CAP VALUE FUND
SMALL CAP VALUE FUND
SMALL CAP DIVERSIFIED VALUE FUND
GLOBAL VALUE FUND
INTERNATIONAL VALUE FUND
INTERNATIONAL SMALL CAP DIVERSIFIED VALUE FUND
VALUE OPPORTUNITIES FUND
HIGH YIELD FUND
TABLE OF CONTENTS
SHAREHOLDER LETTER | 1 | ||||||
FUND INFORMATION | 4 | ||||||
FUND PERFORMANCE DATA | 6 | ||||||
SCHEDULE OF INVESTMENTS: | |||||||
DIVERSIFIED VALUE FUND | 16 | ||||||
LARGE CAP VALUE FUND | 18 | ||||||
MID-CAP VALUE FUND | 20 | ||||||
SMALL CAP VALUE FUND | 22 | ||||||
SMALL CAP DIVERSIFIED VALUE FUND | 25 | ||||||
GLOBAL VALUE FUND | 32 | ||||||
INTERNATIONAL VALUE FUND | 34 | ||||||
INTERNATIONAL SMALL CAP DIVERSIFIED VALUE FUND | 36 | ||||||
VALUE OPPORTUNITIES FUND | 42 | ||||||
HIGH YIELD FUND | 45 | ||||||
STATEMENTS OF ASSETS & LIABILITIES | 52 | ||||||
STATEMENTS OF OPERATIONS | 54 | ||||||
STATEMENTS OF CHANGES IN NET ASSETS | 56 | ||||||
FINANCIAL HIGHLIGHTS | 61 | ||||||
NOTES TO THE FINANCIAL STATEMENTS | 66 | ||||||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 81 | ||||||
FUND EXPENSE EXAMPLES | 82 | ||||||
BOARD CONSIDERATIONS IN APPROVING CONTINUATION OF INVESTMENT ADVISORY AGREEMENTS | 84 | ||||||
STATEMENT REGARDING LIQUIDITY RISK MANAGEMENT PROGRAM | 86 | ||||||
MANAGEMENT | 87 | ||||||
INFORMATION ABOUT THE FUNDS | BACK COVER |
DEAR SHAREHOLDER:
The following investment review and shareholder report relates to the activities of the Hotchkis & Wiley Funds for the twelve months ended June 30, 2021.
OVERVIEW
In the twelve-month period ended June 30, 2021, the S&P 500® Index returned +41%, the MSCI World Index returned +39%, and the ICE BofAML U.S. High Yield Index (high yield market) returned +16%. While the threat of new COVID variants persists, vaccination levels increased and new cases slowed in most developed regions. Consequently, governments continued to ease closures/restrictions, accelerating economic activity around the globe. Manufacturing and labor markets showed signs of improvement, highlighting the potential for tight supply conditions. Consumer prices in the U.S. rose at the fastest level in years. Crude oil prices reached the highest level in more than two years. Corporate earnings continued to show strength, handily surpassing consensus expectations throughout the period.
The MSCI World Growth Index outperformed the MSCI World Value Index by a slight margin over the full period (+40% vs. +38%) but global value has outperformed over the past 9 months. In the U.S. equity market, value had a slight edge over growth in the twelve-month period, and a considerable edge over the past nine months. Nearly all prolonged value-led markets contain stints when growth outperforms value, including the most recent calendar quarter. In perhaps the strongest value rally ever, for example, the MSCI World Value Index outperformed the MSCI World Growth Index by 78 percentage points from March 2000 through December 2006. However, growth outperformed value in more than one-third of those months (31 out of 82 months). While we believe value is poised to outperform, we expect intermittent periods of growth outperformance. The reason we believe value should do well going forward is because value spreads are much wider than average. So too is the spread between the equity funds and their respective value benchmarks, which means the spread between the funds and either the core or growth indices is extreme. We believe this bodes well going forward as value relationships normalize. We continue to focus on companies trading at large discounts to intrinsic value but that have strong balance sheets, quality businesses, and employ appropriate corporate governance — a combination that we believe should continue to benefit investors in our equity funds.
The high yield market's rise has resulted in reduced yields and tightened spreads — both to levels considerably lower/tighter than historical averages. While these relatively rich valuations leave less room to absorb negative shocks, the low yields/spreads are supported by healthy fundamentals. Defaults/distressed exchange activity over the first six months of 2021 was the high yield market's lightest in a decade. The trailing twelve-month par-weighted default rate, including distressed exchanges, ended the period at less than 1.9%. Defaults in calendar year 2020 represented $140 billion in par value (includes bonds, loans, and distressed exchanges). Year-to-date 2021, this figure is $8.5 billion. The trailing twelve-month upgrade/downgrade ratio is 1.34 to 1, which is the highest level in nearly 7 years; the trailing six-month ratio is more than 2 to 1. We continue to focus
on well-capitalized credits, with a penchant for the often overlooked small and mid-cap segment of the market. This results in a yield/spread advantage relative to the benchmark, and because we generally focus on the senior part of the capital structure, it can be attained without assuming undue risk. We believe this combination should continue to benefit investors in our High Yield Fund.
HOTCHKIS & WILEY DIVERSIFIED VALUE FUND
The Fund's Class I shares had a total return of 67.14% for the one year ended June 30, 2021 compared to the Russell 1000® Value Index return of 43.68%.
Stock selection, which was positive in all but 2 of the 11 GICS® sectors, drove most of the outperformance. Positive stock selection in industrials, consumer discretionary, and communication services led the way. The overweight position in financials and underweight position in consumer staples also helped performance. The overweight position in information technology and underweight position in materials were modest detractors. The largest positive contributors to relative performance in the twelve-month period were General Electric, General Motors, Marathon Oil, FedEx, and Wells Fargo; the largest detractors were GlaxoSmithKline, PPL, Vodafone, Unilever, and Sanofi.
HOTCHKIS & WILEY LARGE CAP VALUE FUND
The Fund's Class I shares had a total return of 64.20% for the one year ended June 30, 2021 compared to the Russell 1000® Value Index return of 43.68%.
Stock selection was decidedly positive, and broadly so. It was positive in 9 of the 11 GICS® sectors. It was most positive in industrials, consumer discretionary, and information technology. The overweight allocation to financials and underweight allocation to consumer staples also benefited performance. The overweight position in information technology and underweight position in materials were modest detractors. The largest positive contributors to relative performance in the twelve-month period were General Electric, General Motors, Marathon Oil, FedEx, and Magna International; the largest detractors were GlaxoSmithKline, PPL, Vodafone, F5 Networks, and Unilever.
HOTCHKIS & WILEY MID-CAP VALUE FUND
The Fund's Class I shares had a total return of 93.96% for the one year ended June 30, 2021 compared to the Russell Midcap® Value Index return of 53.06%.
Stock selection was broadly positive (negative in just one sector, health care) contributing the majority of the period's outperformance. Positive stock selection in consumer discretionary, industrials, and financials were the largest contributors. The overweight position in energy, the index's second-best performing sector after materials, also helped. The underweight exposure to materials and stock selection in health care detracted from performance. The largest positive contributors to relative performance in the twelve-month period were Royal Mail, Bed Bath & Beyond, CIT Group, Popular, and Adient; the largest detractors were Vistra, Centene, NRG Energy, Equitrans Midstream, and Allison Transmission.
1
HOTCHKIS & WILEY SMALL CAP VALUE FUND
The Fund's Class I shares had a total return of 80.88% for the one year ended June 30, 2021 compared to the Russell 2000® Value Index return of 73.28%.
Positive stock selection drove most of the outperformance, with financials the most meaningful contributor. Positive stock selection in industrials, real estate, and utilities also helped relative performance, along with the overweight exposure to energy and underweight exposure to real estate. The lack of exposure to materials, and the underweight exposure to consumer discretionary hurt relative performance. Stock selection in information technology, energy, and health care were also detractors. The largest positive contributors to relative performance in the twelve-month period were Range Resources, Evercore, MDC Partners, SLM Corp., and Popular; the largest detractors were Triple-S Management, Equitrans Midstream, Global Indemnity, Euronet Worldwide, and Allison Transmission. Not owning Reddit-fueled stocks AMC Entertainment and GameStop were also large detractors, as the two stocks returned more than +1000% and +4000%, respectively.
HOTCHKIS & WILEY SMALL CAP DIVERSIFIED VALUE FUND
The Fund's Class I shares had a total return of 79.26% for the one year ended June 30, 2021 compared to the Russell 2000® Value Index return of 73.28%.
Positive stock selection in financials was the largest positive contributor, by far. The overweight exposure to energy and underweight exposure to real estate also helped relative returns. The Fund's outsized exposure to stocks with market caps below $1 billion also helped. Stock selection in information technology, along with the overweight allocation to financials and underweight allocation to materials detracted from performance. The Fund did not own AMC Entertainment (up more than +1000%) or GameStop (up more than +4000%), which hurt performance as these became meaningful weights in the index.
HOTCHKIS & WILEY GLOBAL VALUE FUND
The Fund's Class I shares had a total return of 63.58% for the one year ended June 30, 2021 compared to the MSCI World Index return of 39.04%.
Stock selection was positive in every sector in which the Fund was invested, which drove most of the outperformance. It was especially positive in industrials, financials, and consumer discretionary. The overweight exposure to financials and underweight exposure to health care also helped. The underweight allocation to consumer discretionary, information technology, and communication services were modest detractors. The largest positive contributors to relative performance in the twelve-month period were General Electric, Royal Mail, Wells Fargo, News Corp., and Magna International; the largest
detractors were F5 Networks, GlaxoSmithKline, Tokio Marine, Credit Suisse, and Vodafone.
HOTCHKIS & WILEY INTERNATIONAL VALUE FUND
The Fund's Class I shares had a total return of 55.37% for the one year ended June 30, 2021 compared to the MSCI World ex-USA Index return of 33.60%.
Stock selection, which was only negative in 1 of the 11 GICS® sectors, drove nearly all the outperformance in the period. It was most positive in industrials, energy, financials, and information technology. Stock selection in communication services, along with the underweight exposure to consumer discretionary and materials were modest performance detractors. The largest positive contributors to relative performance in the twelve-month period were Royal Mail, CNH Industrial, Magna International, Airbus, and ING Groep; the largest detractors were Credit Suisse, Tokio Marine, Henkel, Ezaki Glico, and Vodafone.
HOTCHKIS & WILEY INTERNATIONAL SMALL CAP DIVERSIFIED VALUE FUND
The Fund's Class I shares had a total return of 51.58% for the one year ended June 30, 2021 compared to the MSCI World ex-USA Small Cap Index return of 42.28%.
Stock selection drove nearly all the outperformance; it was positive in 9 of the 11 GICS® sectors in the period. Positive stock selection in financials, information technology, and consumer discretionary were the largest positive contributors. Stock selection in utilities and real estate were modest detractors.
HOTCHKIS & WILEY VALUE OPPORTUNITIES FUND
The Fund's Class I shares had a total return of 69.77% for the one year ended June 30, 2021 compared to the Russell 3000® Value Index return of 45.40%.
Security selection drove most of the outperformance — it was positive in all but one sector in which the Fund was invested (consumer discretionary). Security selection in industrials, communication services, and financials were particularly positive, along with the underweight exposure to utilities, consumer staples, and health care. The underweight exposure to and security selection in consumer discretionary, along with the overweight exposure to information technology detracted from performance. The largest positive contributors to relative performance in the twelve-month period were Royal Mail, General Electric, News Corp., Range Resources, and AMERCO; the largest detractors were F5 Networks, Tesla put options, Triple-S Management, Microsoft, and ASNA bonds.
2
HOTCHKIS & WILEY HIGH YIELD FUND
The Fund's Class I shares had a total return of 19.32% for the one year ended June 30, 2021 compared to the ICE BofAML BB-B U.S. High Yield Constrained Index return of 13.44%.
Positive credit selection drove most of the outperformance in the period. Credit selection in energy, basic industry, capital goods, media, and health care were most positive. The underweight exposure to telecommunications and overweight exposure to transportation also helped relative returns. The outsized exposure to small/mid-cap credits also helped as smaller credits outperformed larger credits. Credit selection in transportation detracted from performance — other detractors were negligible in magnitude.
CONCLUSION
We appreciate your continued support of the Hotchkis & Wiley Funds, and we look forward to serving your investment needs in the future.
Sincerely,
Anna Marie Lopez President | George Davis Fund Manager | Scott McBride Fund Manager | |||||||||
Patty McKenna Fund Manager | James Miles Fund Manager | Stan Majcher Fund Manager | |||||||||
David Green Fund Manager | Judd Peters Fund Manager | Ray Kennedy Fund Manager | |||||||||
Mark Hudoff Fund Manager | Patrick Meegan Fund Manager | Scott Rosenthal Fund Manager | |||||||||
Richard Mak Fund Manager | Ryan Thomes Fund Manager | Hunter Doble Fund Manager |
3
Fund Information
ABOUT FUND PERFORMANCE
The Diversified Value Fund, Large Cap Value Fund, Mid-Cap Value Fund, Small Cap Value Fund, Small Cap Diversified Value Fund, Global Value Fund, International Value Fund, Value Opportunities Fund and High Yield Fund have four authorized classes of shares (Class I, Class A, Class C and Class Z). The International Small Cap Diversified Value Fund has three authorized classes of shares (Class I, Class A and Class Z). Each share class has its own sales charge and expense structure, allowing you to invest in the way that best suits your needs. Currently, the International Value Fund and International Small Cap Diversified Value Fund are not offering Class A shares to investors; the Small Cap Diversified Value Fund, Global Value Fund and International Value Fund are not offering Class C shares to investors; and the Diversified Value Fund, Global Value Fund, International Value Fund and International Small Cap Diversified Value Fund are not offering Class Z shares to investors.
Class I shares have no initial sales charge and bear no ongoing distribution and service fees under a 12b-1 plan. Class I shares are available only to eligible investors.
Class A shares incur a maximum initial sales charge of 5.25% for the Diversified Value Fund, Large Cap Value Fund, Mid-Cap Value Fund, Small Cap Value Fund, Small Cap Diversified Value Fund, Global Value Fund, International Value Fund, International Small Cap Diversified Value Fund and Value Opportunities Fund and 3.75% for the High Yield Fund and an annual distribution and service fee of 0.25%.
Class C shares are subject to an annual distribution and service fee of 1.00%. In addition, Class C shares are subject to a 1.00% contingent deferred sales charge (CDSC) if redeemed within one year after purchase. Class C shares automatically convert to Class A shares approximately eight years after purchase and will then be subject to lower annual distribution and service fees.
Class Z shares have no initial sales charge and bear no ongoing distribution and service fees under a 12b-1 plan. Class Z shares are available only to eligible investors (provided that no compensation, administrative payments, sub-transfer agency payments and service payments are required).
FUND RISKS
Mutual fund investing involves risk; loss of principal is possible. The Mid-Cap Value Fund, Small Cap Value Fund, Small Cap Diversified Value Fund, Global Value Fund, International Value Fund, International Small Cap Diversified Value Fund and Value Opportunities Fund invest in small- and mid-capitalization companies which tend to have limited liquidity and greater price volatility than large-capitalization companies. The Value Opportunities Fund is a non-diversified fund which involves greater risk than investing in a diversified fund because a loss resulting from the decline in the value of one security may represent a greater portion of the total assets of a non-diversified fund. Growth stocks typically are more volatile than value stocks; however, value stocks have a lower expected growth rate in earnings and sales. The Value Opportunities Fund and High Yield Fund invest in debt securities that decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investment by the Value Opportunities Fund and High Yield Fund in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. The Value Opportunities Fund
and High Yield Fund may utilize derivative instruments, which derive their performance from the performance of an underlying asset, index, interest rate or currency exchange rate. Derivatives can be volatile and involve various types and degrees of risks. Depending upon the characteristics of particular derivatives, they can suddenly become illiquid. Investments by the High Yield Fund in asset-backed and mortgage-backed securities include additional risks that investors should be aware of such as credit risk, extension risk, prepayment risk, and default risk, as well as increased susceptibility to adverse economic developments. The Funds may invest in foreign securities, including developed and emerging markets, which involve greater volatility and political, economic, and currency risks.
MARKET INDEXES
The following are definitions for indexes used in the shareholder letter and the fund performance data on the following pages. These indexes are unmanaged and include the reinvestment of dividends, but do not reflect the payment of transaction costs and advisory and other fees associated with an investment in the Funds. The securities that comprise these indexes may differ substantially from the securities in the Funds' portfolios. The Funds' value disciplines may prevent or restrict investments in securities included in the benchmark indexes. It is not possible to invest directly in an index. Each index named is not the only index which may be used to characterize performance of a specific Fund and other indexes may portray different comparative performance.
S&P 500® Index, a capital weighted, unmanaged index, represents the aggregate market value of the common equity of 500 stocks primarily traded on the New York Stock Exchange.
Russell 1000® Index, an unmanaged index, measures the performance of the 1,000 largest companies in the Russell 3000® Index.
Russell 1000® Value Index measures the performance of those Russell 1000® companies with lower price-to-book ratios and lower forecasted growth values.
Russell Midcap® Index, an unmanaged index, measures the performance of the 800 smallest companies in the Russell 1000® Index.
Russell Midcap® Value Index measures the performance of those Russell Midcap® companies with lower price-to-book ratios and lower forecasted growth values.
Russell 2000® Index, an unmanaged index, measures the performance of the 2,000 smallest companies in the Russell 3000® Index.
Russell 2000® Value Index measures the performance of those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values.
Russell 3000® Index, an unmanaged index, is comprised of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market.
Russell 3000® Value Index measures the performance of those Russell 3000® companies with lower price-to-book ratios and lower forecasted growth values.
MSCI World Index is a free float-adjusted weighted index capturing large and mid cap representation across 23 Developed Markets (DM) countries.
4
Fund Information
MSCI World Growth Index is the growth investment style of the MSCI World Index. The growth investment style characteristics for index construction are defined using five variables: long-term forward EPS growth rate, short-term forward EPS growth rate, current internal growth rate and long-term historical EPS growth trend and long-term historical sales per share growth trend.
MSCI World Value Index is the value investment style of the MSCI World Index. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield.
MSCI World ex-USA Index is a free float-adjusted weighted index capturing large and mid cap representation across 22 of 23 Developed Markets (DM) countries, excluding the United States.
MSCI World ex-USA Small Cap Index is a free float-adjusted weighted index capturing small cap representation across 22 of 23 Developed Markets (DM) countries, excluding the United States.
ICE BofAML BB-B U.S. High Yield Constrained Index contains all securities in the ICE BofAML U.S. High Yield Index rated BB+ through B- by S&P (or equivalent as rated by Moody's or Fitch), but caps issuer exposure at 2%. Index constituents are capitalization-weighted, based on their current amount outstanding, provided the total allocation to an individual issuer does not exceed 2%.
ICE BofAML U.S. High Yield Index tracks the performance of below investment grade, but not in default, U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market, and includes issues with a credit rating of BBB or below, as rated by Moody's and S&P.
DISCLOSURE
Past performance does not guarantee future results.
The shareholder letter reflects opinions of Fund managers as of June 30, 2021. They are subject to change and any forecasts made cannot be guaranteed. The Funds might not continue to hold any securities mentioned and have no obligation to disclose purchases or sales in these securities. Please refer to the Schedule of Investments in this report for a complete list of Fund holdings for June 30, 2021. Indexes do not incur expenses or sales loads and are not available for investment.
The Global Industry Classification Standard (GICS®) was developed by MSCI, an independent provider of global indices and benchmark-related products and services, and Standard & Poor's (S&P), an independent international financial data and investment services company.
The GICS methodology has been widely accepted as an industry analysis framework for investment research, portfolio management and asset allocation. The GICS structure consists of 11 sectors, 24 industry groups, 69 industries and 158 sub-industries. Each stock that is classified will have a coding at all four of these levels.
Investing in value stocks presents the risk that value stocks may fall out of favor with investors and underperform other asset types during a given period.
Each type of asset class or investment product has a different risk-return profile, which should be considered when investing. All investments contain risk and may lose value.
Basis point (bp) is a unit equal to 1/100th of 1% (0.01%) and is used to denote the change in a financial instrument.
Market capitalization of a company is calculated by multiplying the number of outstanding shares by the current market price of a share.
Yield-to-worst is the lowest possible yield from owning a bond considering all potential call dates prior to maturity.
Market Disruption: The recent global coronavirus pandemic (COVID-19) has caused and continues to cause disruption in the global economy, unprecedented business and travel disruption and extreme fluctuations in global capital and financial markets. Hotchkis & Wiley Capital Management, LLC (the "Advisor") is unable to predict the consequences of the upheaval caused by COVID-19, which, depending on the severity and the length of the outbreak, has the potential to negatively impact the Advisor's investment strategies and reduce available investment opportunities.
Credit Quality weights by rating were derived from the highest bond rating as determined by S&P, Moody's or Fitch. Bond ratings are grades given to bonds that indicate their credit quality as determined by private independent rating services such as S&P, Moody's and Fitch. These firms evaluate a bond issuer's financial strength, or its ability to pay a bond's principal and interest in a timely fashion. Ratings are expressed as letters ranging from 'AAA', which is the highest grade, to 'D', which is the lowest grade. In limited situations when none of the three rating agencies have issued a formal rating, the Advisor will classify the security as nonrated.
During the year ended June 30, 2021, the Value Opportunities Fund held futures contracts and purchased put options, which resulted in realized losses and unrealized gains.
5
Fund Performance Data
DIVERSIFIED VALUE FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | 10 Years | Since 8/30/04* | |||||||||||||||
Class I | |||||||||||||||||||
Average annual total return | 67.14 | % | 14.63 | % | 11.93 | % | 8.21 | % | |||||||||||
Class A | |||||||||||||||||||
Average annual total return (with sales charge) | 58.00 | % | 13.11 | % | 11.05 | % | 7.60 | % | |||||||||||
Average annual total return (without sales charge) | 66.74 | % | 14.35 | % | 11.66 | % | 7.94 | % | |||||||||||
Class C | |||||||||||||||||||
Average annual total return (with CDSC) | 64.57 | % | 13.49 | % | 10.82 | % | 7.15 | % | |||||||||||
Average annual total return (without CDSC) | 65.57 | % | 13.49 | % | 10.82 | % | 7.15 | % | |||||||||||
Russell 1000® Value Index†† | |||||||||||||||||||
Average annual total return | 43.68 | % | 11.87 | % | 11.61 | % | 8.73 | % | |||||||||||
Russell 1000® Index†† | |||||||||||||||||||
Average annual total return | 43.07 | % | 17.99 | % | 14.90 | % | 10.96 | % |
Average annual total returns with sales charge and CDSC shown for Class A and Class C shares, respectively, have been adjusted to reflect the applicable sales charges of each specific class. Returns for Class A reflect the maximum initial sales charge of 5.25%. Class C shares have no adjustment for sales charges, but redemptions within one year of purchase may be subject to a CDSC of 1%. Average annual total returns without sales charge or CDSC do not reflect the sales charges. Had the sales charge or CDSC been included, the Fund's returns would have been lower.
† The Fund invests primarily in equity securities of companies with market capitalizations similar to the Russell 1000® Index.
†† See index descriptions in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I, Class A and Class C.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 1.03% for Class I shares, 1.24% for Class A shares and 1.97% for Class C shares, respectively.
6
Fund Performance Data
LARGE CAP VALUE FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | 10 Years | Since 6/24/87* | |||||||||||||||
Class I | |||||||||||||||||||
Average annual total return | 64.20 | % | 13.84 | % | 12.14 | % | 9.40 | % | |||||||||||
Class A | |||||||||||||||||||
Average annual total return (with sales charge) | 55.22 | % | 12.33 | % | 11.26 | % | 8.97 | % | |||||||||||
Average annual total return (without sales charge) | 63.82 | % | 13.54 | % | 11.86 | % | 9.14 | % | |||||||||||
Class C | |||||||||||||||||||
Average annual total return (with CDSC) | 61.60 | % | 12.73 | % | 11.04 | % | 8.32 | % | |||||||||||
Average annual total return (without CDSC) | 62.60 | % | 12.73 | % | 11.04 | % | 8.32 | % | |||||||||||
Class Z | |||||||||||||||||||
Average annual total return | 64.34 | % | 13.89 | % | 12.16 | % | 9.40 | % | |||||||||||
Russell 1000® Value Index†† | |||||||||||||||||||
Average annual total return | 43.68 | % | 11.87 | % | 11.61 | % | 10.00 | % | |||||||||||
Russell 1000® Index†† | |||||||||||||||||||
Average annual total return | 43.07 | % | 17.99 | % | 14.90 | % | 10.62 | % |
Returns shown for Class A, Class C, and Class Z shares for the periods prior to their inception are derived from the historical performance of Class I shares of the Fund during such periods and have been adjusted to reflect the higher total annual operating expenses of Class A and Class C shares. (Inception dates: Class A — 10/26/01; Class C — 2/4/02; Class Z — 9/30/19.)
Average annual total returns with sales charge and CDSC shown for Class A and Class C shares, respectively, have been adjusted to reflect the applicable sales charges of each specific class. Returns for Class A reflect the maximum initial sales charge of 5.25%. Class C shares have no adjustment for sales charges, but redemptions within one year of purchase may be subject to a CDSC of 1%. Average annual total returns without sales charge or CDSC do not reflect the sales charges. Had the sales charge or CDSC been included, the Fund's returns would have been lower.
† The Fund invests primarily in equity securities of companies with market capitalizations similar to the Russell 1000® Index.
†† See index descriptions in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I is 6/24/87. Average annual total return for the Russell 1000® Value Index reflects a beginning date of 6/30/87.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 0.98% for Class I shares, 1.18% for Class A shares, 1.92% for Class C shares and 0.84% for Class Z shares, respectively.
7
Fund Performance Data
MID-CAP VALUE FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | 10 Years | Since 1/2/97* | |||||||||||||||
Class I | |||||||||||||||||||
Average annual total return | 93.96 | % | 9.90 | % | 9.68 | % | 11.29 | % | |||||||||||
Class A | |||||||||||||||||||
Average annual total return (with sales charge) | 83.46 | % | 8.47 | % | 8.84 | % | 10.78 | % | |||||||||||
Average annual total return (without sales charge) | 93.63 | % | 9.65 | % | 9.42 | % | 11.02 | % | |||||||||||
Class C | |||||||||||||||||||
Average annual total return (with CDSC) | 91.13 | % | 8.82 | % | 8.60 | % | 10.21 | % | |||||||||||
Average annual total return (without CDSC) | 92.13 | % | 8.82 | % | 8.60 | % | 10.21 | % | |||||||||||
Class Z | |||||||||||||||||||
Average annual total return | 94.35 | % | 9.96 | % | 9.71 | % | 11.30 | % | |||||||||||
Russell Midcap® Value Index†† | |||||||||||||||||||
Average annual total return | 53.06 | % | 11.79 | % | 11.75 | % | 10.66 | % | |||||||||||
Russell Midcap® Index†† | |||||||||||||||||||
Average annual total return | 49.80 | % | 15.62 | % | 13.24 | % | 11.03 | % |
Returns shown for Class A, Class C, and Class Z shares for the periods prior to their inception are derived from the historical performance of Class I shares of the Fund during such periods and have been adjusted to reflect the higher total annual operating expenses of Class A and Class C shares. (Inception dates: Class A, Class C — 1/2/01; Class Z — 9/30/19.)
Average annual total returns with sales charge and CDSC shown for Class A and Class C shares, respectively, have been adjusted to reflect the applicable sales charges of each specific class. Returns for Class A reflect the maximum initial sales charge of 5.25%. Class C shares have no adjustment for sales charges, but redemptions within one year of purchase may be subject to a CDSC of 1%. Average annual total returns without sales charge or CDSC do not reflect the sales charges. Had the sales charge or CDSC been included, the Fund's returns would have been lower.
† The Fund invests primarily in equity securities of companies with market capitalizations similar to the Russell Midcap® Index.
†† See index descriptions in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 1.04% for Class I shares, 1.23% for Class A shares, 2.01% for Class C shares and 0.88% for Class Z shares, respectively.
8
Fund Performance Data
SMALL CAP VALUE FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | 10 Years | Since 9/20/85* | |||||||||||||||
Class I | |||||||||||||||||||
Average annual total return | 80.88 | % | 12.48 | % | 10.22 | % | 11.34 | % | |||||||||||
Class A | |||||||||||||||||||
Average annual total return (with sales charge) | 71.09 | % | 11.03 | % | 9.36 | % | 10.92 | % | |||||||||||
Average annual total return (without sales charge) | 80.58 | % | 12.23 | % | 9.95 | % | 11.09 | % | |||||||||||
Class C | |||||||||||||||||||
Average annual total return (with CDSC) | 78.25 | % | 11.40 | % | 9.14 | % | 10.28 | % | |||||||||||
Average annual total return (without CDSC) | 79.25 | % | 11.40 | % | 9.14 | % | 10.28 | % | |||||||||||
Class Z | |||||||||||||||||||
Average annual total return | 81.23 | % | 12.55 | % | 10.25 | % | 11.35 | % | |||||||||||
Russell 2000® Value Index†† | |||||||||||||||||||
Average annual total return | 73.28 | % | 13.62 | % | 10.85 | % | 11.12 | % | |||||||||||
Russell 2000® Index†† | |||||||||||||||||||
Average annual total return | 62.03 | % | 16.47 | % | 12.34 | % | 10.39 | % |
Returns shown for Class A, Class C, and Class Z shares for the periods prior to their inception are derived from the historical performance of Class I shares of the Fund during such periods and have been adjusted to reflect the higher total annual operating expenses of Class A and Class C shares. (Inception dates: Class A — 10/6/00; Class C — 2/4/02; Class Z — 9/30/19.)
Average annual total returns with sales charge and CDSC shown for Class A and Class C shares, respectively, have been adjusted to reflect the applicable sales charges of each specific class. Returns for Class A reflect the maximum initial sales charge of 5.25%. Class C shares have no adjustment for sales charges, but redemptions within one year of purchase may be subject to a CDSC of 1%. Average annual total returns without sales charge or CDSC do not reflect the sales charges. Had the sales charge or CDSC been included, the Fund's returns would have been lower.
† The Fund invests primarily in equity securities of companies with market capitalizations similar to the Russell 2000® Index.
†† See index descriptions in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I is 9/20/85. Average annual total return for the Russell 2000® Value Index reflects a beginning date of 9/30/85.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 1.07% for Class I shares, 1.25% for Class A shares, 1.99% for Class C shares and 0.87% for Class Z shares, respectively.
9
Fund Performance Data
SMALL CAP DIVERSIFIED VALUE FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | Since 6/30/14* | ||||||||||||
Class I | |||||||||||||||
Average annual total return | 79.26 | % | 14.97 | % | 9.99 | % | |||||||||
Class A | |||||||||||||||
Average annual total return (with sales charge) | 69.77 | % | 13.47 | % | 8.87 | % | |||||||||
Average annual total return (without sales charge) | 79.09 | % | 14.69 | % | 9.71 | % | |||||||||
Class Z | |||||||||||||||
Average annual total return | 79.45 | % | 14.97 | % | 9.99 | % | |||||||||
Russell 2000® Value Index†† | |||||||||||||||
Average annual total return | 73.28 | % | 13.62 | % | 9.25 | % | |||||||||
Russell 2000® Index†† | |||||||||||||||
Average annual total return | 62.03 | % | 16.47 | % | 11.38 | % |
Returns shown for Class Z shares for the periods prior to its inception are derived from the historical performance of Class I shares of the Fund during such periods. (Inception date: Class Z — 9/30/19.)
Average annual total returns with sales charge shown for Class A shares have been adjusted to reflect the applicable sales charge of the class. Returns for Class A reflect the maximum initial sales charge of 5.25%. Average annual total returns without sales charge do not reflect the sales charge. Had the sales charge been included, the Fund's returns would have been lower.
† The Fund invests primarily in equity securities of companies with market capitalizations similar to the Russell 2000® Index.
†† See index descriptions in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I and Class A.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 0.87% for Class I shares, 1.14% for Class A shares and 0.77% for Class Z shares, respectively.
10
Fund Performance Data
GLOBAL VALUE FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | Since 12/31/12* | ||||||||||||
Class I | |||||||||||||||
Average annual total return | 63.58 | % | 11.74 | % | 9.97 | % | |||||||||
Class A | |||||||||||||||
Average annual total return (with sales charge) | 54.43 | % | 10.27 | % | 9.01 | % | |||||||||
Average annual total return (without sales charge) | 63.05 | % | 11.47 | % | 9.70 | % | |||||||||
MSCI World Index†† | |||||||||||||||
Average annual total return | 39.04 | % | 14.83 | % | 12.14 | % |
Returns shown for Class A shares for the periods prior to its inception are derived from the historical performance of Class I shares of the Fund during such periods and have been adjusted to reflect the higher total annual operating expenses of the class. (Inception date: Class A — 8/30/13.)
Average annual total returns with sales charge shown for Class A shares have been adjusted to reflect the applicable sales charge of the class. Returns for Class A reflect the maximum initial sales charge of 5.25%. Average annual total returns without sales charge do not reflect the sales charge. Had the sales charge been included, the Fund's returns would have been lower.
† The Fund invests primarily in U.S. and non-U.S. companies.
†† See index description in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 1.29% for Class I shares and 1.48% for Class A shares, respectively.
11
Fund Performance Data
INTERNATIONAL VALUE FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | Since 12/31/15* | ||||||||||||
Class I | |||||||||||||||
Average annual total return | 55.37 | % | 8.19 | % | 6.95 | % | |||||||||
MSCI World ex-USA Index†† | |||||||||||||||
Average annual total return | 33.60 | % | 10.36 | % | 8.77 | % |
† The Fund invests primarily in non-U.S. companies.
†† See index description in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 5.13% for Class I shares.
12
Fund Performance Data
INTERNATIONAL SMALL CAP DIVERSIFIED VALUE FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Period ended June 30, 2021 | Since 6/30/20* (1 Year) | ||||||
Class I | |||||||
Average annual total return | 51.58 | % | |||||
MSCI World ex-USA Small Cap Index†† | |||||||
Average annual total return | 42.28 | % |
† The Fund invests primarily in equity securities of non-U.S. companies with market capitalizations similar to the MSCI World ex-USA Small Cap Index.
†† See index description in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 4.27% for Class I shares.
13
Fund Performance Data
VALUE OPPORTUNITIES FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | 10 Years | Since 12/31/02* | |||||||||||||||
Class I | |||||||||||||||||||
Average annual total return | 69.77 | % | 15.67 | % | 12.62 | % | 12.81 | % | |||||||||||
Class A | |||||||||||||||||||
Average annual total return (with sales charge) | 60.32 | % | 14.14 | % | 11.73 | % | 12.25 | % | |||||||||||
Average annual total return (without sales charge) | 69.24 | % | 15.37 | % | 12.34 | % | 12.57 | % | |||||||||||
Class C | |||||||||||||||||||
Average annual total return (with CDSC) | 67.05 | % | 14.53 | % | 11.51 | % | 11.72 | % | |||||||||||
Average annual total return (without CDSC) | 68.05 | % | 14.53 | % | 11.51 | % | 11.72 | % | |||||||||||
Class Z | |||||||||||||||||||
Average annual total return | 69.86 | % | 15.70 | % | 12.64 | % | 12.82 | % | |||||||||||
Russell 3000® Value Index†† | |||||||||||||||||||
Average annual total return | 45.40 | % | 11.99 | % | 11.54 | % | 9.71 | % | |||||||||||
Russell 3000® Index†† | |||||||||||||||||||
Average annual total return | 44.16 | % | 17.89 | % | 14.70 | % | 11.48 | % |
Returns shown for Class C and Class Z shares for the periods prior to their inception are derived from the historical performance of Class I shares of the Fund during such periods and have been adjusted to reflect the higher total annual operating expenses of Class C shares. (Inception dates: Class C — 8/28/03; Class Z — 9/30/19.)
Average annual total returns with sales charge and CDSC shown for Class A and Class C shares, respectively, have been adjusted to reflect the applicable sales charges of each specific class. Returns for Class A reflect the maximum initial sales charge of 5.25%. Class C shares have no adjustment for sales charges, but redemptions within one year of purchase may be subject to a CDSC of 1%. Average annual total returns without sales charge or CDSC do not reflect the sales charge. Had the sales charge or CDSC been included, the Fund's returns would have been lower.
† The Fund invests primarily in securities of companies with strong capital appreciation potential.
†† See index descriptions in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I and Class A.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 0.94% for Class I shares, 1.24% for Class A shares, 1.93% for Class C shares and 0.87% for Class Z shares, respectively.
14
Fund Performance Data
HIGH YIELD FUND
Total Return Based on a $10,000 Investment
Comparative Results†††
For Periods ended June 30, 2021 | 1 Year | 5 Years | 10 Years | Since 3/31/09* | |||||||||||||||
Class I | |||||||||||||||||||
Average annual total return | 19.32 | % | 6.17 | % | 5.80 | % | 9.11 | % | |||||||||||
Class A | |||||||||||||||||||
Average annual total return (with sales charge) | 14.63 | % | 5.05 | % | 5.10 | % | 8.42 | % | |||||||||||
Average annual total return (without sales charge) | 19.09 | % | 5.86 | % | 5.50 | % | 8.76 | % | |||||||||||
Class C | |||||||||||||||||||
Average annual total return (with CDSC) | 17.20 | % | 5.12 | % | 4.74 | % | 8.02 | % | |||||||||||
Average annual total return (without CDSC) | 18.20 | % | 5.12 | % | 4.74 | % | 8.02 | % | |||||||||||
Class Z | |||||||||||||||||||
Average annual total return | 19.44 | % | 6.23 | % | 5.83 | % | 9.13 | % | |||||||||||
ICE BofAML BB-B U.S. High Yield Constrained Index†† | |||||||||||||||||||
Average annual total return | 13.44 | % | 6.99 | % | 6.43 | % | 9.57 | % |
Returns shown for Class A, Class C, and Class Z shares for the periods prior to their inception are derived from the historical performance of Class I shares of the Fund during such periods and have been adjusted to reflect the higher total annual operating expenses of Class A and Class C shares. (Inception dates: Class A — 5/29/09; Class C — 12/31/12; Class Z — 3/29/18.)
Average annual total returns with sales charge and CDSC shown for Class A and Class C shares, respectively, have been adjusted to reflect the applicable sales charges of each specific class. Returns for Class A reflect the maximum initial sales charge of 3.75%. Class C shares have no adjustment for sales charges, but redemptions within one year of purchase may be subject to a CDSC of 1%. Average annual total returns without sales charge or CDSC do not reflect the sales charges. Had the sales charge or CDSC been included, the Fund's returns would have been lower.
† The Fund invests primarily in high yield securities.
†† See index description in the Fund Information section.
††† Fund returns during certain periods shown reflect a fee waiver and/or expense reimbursement. Without waiver/reimbursement, returns would have been lower. Returns shown include the reinvestment of all dividends.
* Commencement of Class I.
Past performance is not indicative of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
The performance shown represents past performance. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment results and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. To obtain performance data current to the most recent month-end, access our website at www.hwcm.com.
The gross expense ratio for the year ended June 30, 2021 is 0.75% for Class I shares, 0.97% for Class A shares, 1.71% for Class C shares and 0.65% for Class Z shares, respectively.
15
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Diversified Value Fund
Largest Equity Holdings | Percent of net assets | ||||||
Wells Fargo & Company | 4.70 | % | |||||
American International Group, Inc. | 4.68 | % | |||||
Citigroup, Inc. | 4.47 | % | |||||
General Electric Company | 4.36 | % | |||||
Anthem, Inc. | 3.05 | % | |||||
Microsoft Corp. | 2.74 | % | |||||
General Motors Company | 2.55 | % | |||||
Marathon Oil Corp. | 2.51 | % | |||||
Alphabet, Inc. | 2.09 | % | |||||
Magna International, Inc. | 2.07 | % |
COMMON STOCKS — 96.87% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 9.36% Interactive Media & Services — 2.09% | |||||||||||
Alphabet, Inc. (a) | 930 | $ | 2,270,865 | ||||||||
Media — 5.74% | |||||||||||
Comcast Corp. | 23,700 | 1,351,374 | |||||||||
Discovery, Inc. (a) | 75,000 | 2,173,500 | |||||||||
The Interpublic Group of Companies, Inc. | 17,800 | 578,322 | |||||||||
News Corp. | 62,000 | 1,597,740 | |||||||||
Omnicom Group, Inc. | 6,800 | 543,932 | |||||||||
6,244,868 | |||||||||||
Wireless Telecommunication Services — 1.53% | |||||||||||
Vodafone Group PLC — ADR | 97,163 | 1,664,402 | |||||||||
TOTAL COMMUNICATION SERVICES | 10,180,135 | ||||||||||
CONSUMER DISCRETIONARY — 6.61% Auto Components — 2.87% | |||||||||||
Adient PLC (a) | 8,974 | 405,625 | |||||||||
The Goodyear Tire & Rubber Company (a) | 27,300 | 468,195 | |||||||||
Magna International, Inc. | 24,300 | 2,251,152 | |||||||||
3,124,972 | |||||||||||
Automobiles — 3.03% | |||||||||||
General Motors Company (a) | 46,900 | 2,775,073 | |||||||||
Harley-Davidson, Inc. | 11,400 | 522,348 | |||||||||
3,297,421 | |||||||||||
Hotels, Restaurants & Leisure — 0.71% | |||||||||||
Booking Holdings, Inc. (a) | 350 | 765,831 | |||||||||
TOTAL CONSUMER DISCRETIONARY | 7,188,224 | ||||||||||
CONSUMER STAPLES — 2.56% Food Products — 0.90% | |||||||||||
Mondelez International, Inc. | 15,600 | 974,064 | |||||||||
Personal Products — 1.66% | |||||||||||
Unilever PLC — ADR | 30,900 | 1,807,650 | |||||||||
TOTAL CONSUMER STAPLES | 2,781,714 |
Shares Held | Value | ||||||||||
ENERGY — 12.91% Energy Equipment & Services — 3.50% | |||||||||||
Baker Hughes Company | 27,400 | $ | 626,638 | ||||||||
Halliburton Company | 52,600 | 1,216,112 | |||||||||
NOV, Inc. (a) | 77,700 | 1,190,364 | |||||||||
Schlumberger NV | 24,100 | 771,441 | |||||||||
3,804,555 | |||||||||||
Oil, Gas & Consumable Fuels — 9.41% | |||||||||||
APA Corp. | 101,400 | 2,193,282 | |||||||||
Hess Corp. | 23,900 | 2,086,948 | |||||||||
Marathon Oil Corp. | 200,800 | 2,734,896 | |||||||||
Marathon Petroleum Corp. | 13,622 | 823,041 | |||||||||
Murphy Oil Corp. | 20,000 | 465,600 | |||||||||
Royal Dutch Shell PLC — ADR | 47,962 | 1,937,665 | |||||||||
10,241,432 | |||||||||||
TOTAL ENERGY | 14,045,987 | ||||||||||
FINANCIALS — 27.43% Banks — 12.36% | |||||||||||
Bank of America Corp. | 45,722 | 1,885,118 | |||||||||
CIT Group, Inc. | 15,800 | 815,122 | |||||||||
Citigroup, Inc. | 68,674 | 4,858,685 | |||||||||
Citizens Financial Group, Inc. | 16,800 | 770,616 | |||||||||
Wells Fargo & Company | 112,834 | 5,110,252 | |||||||||
13,439,793 | |||||||||||
Capital Markets — 5.39% | |||||||||||
The Bank of New York Mellon Corp. | 32,800 | 1,680,344 | |||||||||
Credit Suisse Group AG — ADR | 103,200 | 1,082,568 | |||||||||
The Goldman Sachs Group, Inc. | 5,400 | 2,049,462 | |||||||||
State Street Corp. | 12,800 | 1,053,184 | |||||||||
5,865,558 | |||||||||||
Consumer Finance — 0.52% | |||||||||||
Discover Financial Services | 4,800 | 567,792 |
The accompanying notes are an integral part of these financial statements.
16
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Diversified Value Fund
Shares Held | Value | ||||||||||
Diversified Financial Services — 1.88% | |||||||||||
Berkshire Hathaway, Inc. (a) | 5,690 | $ | 1,581,365 | ||||||||
Equitable Holdings, Inc. | 15,100 | 459,795 | |||||||||
2,041,160 | |||||||||||
Insurance — 7.28% | |||||||||||
American International Group, Inc. | 107,000 | 5,093,200 | |||||||||
The Hartford Financial Services Group, Inc. | 18,300 | 1,134,051 | |||||||||
The Travelers Companies, Inc. | 11,300 | 1,691,723 | |||||||||
7,918,974 | |||||||||||
TOTAL FINANCIALS | 29,833,277 | ||||||||||
HEALTH CARE — 12.12% Health Care Equipment & Supplies — 2.20% | |||||||||||
Boston Scientific Corp. (a) | 12,500 | 534,500 | |||||||||
Medtronic PLC | 9,882 | 1,226,653 | |||||||||
Zimmer Biomet Holdings, Inc. | 3,900 | 627,198 | |||||||||
2,388,351 | |||||||||||
Health Care Providers & Services — 7.23% | |||||||||||
Anthem, Inc. | 8,700 | 3,321,660 | |||||||||
Centene Corp. (a) | 18,900 | 1,378,377 | |||||||||
CVS Health Corp. | 12,400 | 1,034,656 | |||||||||
HCA Healthcare, Inc. | 2,600 | 537,524 | |||||||||
Humana, Inc. | 1,800 | 796,896 | |||||||||
UnitedHealth Group, Inc. | 2,000 | 800,880 | |||||||||
7,869,993 | |||||||||||
Pharmaceuticals — 2.69% | |||||||||||
Bristol-Myers Squibb Company | 10,300 | 688,246 | |||||||||
GlaxoSmithKline PLC — ADR | 33,500 | 1,333,970 | |||||||||
Sanofi — ADR | 17,100 | 900,486 | |||||||||
2,922,702 | |||||||||||
TOTAL HEALTH CARE | 13,181,046 | ||||||||||
INDUSTRIALS — 11.39% Aerospace & Defense — 0.98% | |||||||||||
Raytheon Technologies Corp. | 12,500 | 1,066,375 | |||||||||
Air Freight & Logistics — 1.67% | |||||||||||
FedEx Corp. | 6,100 | 1,819,813 | |||||||||
Construction & Engineering — 0.20% | |||||||||||
Fluor Corp. (a) | 12,200 | 215,940 | |||||||||
Industrial Conglomerates — 4.36% | |||||||||||
General Electric Company | 352,200 | 4,740,612 | |||||||||
Machinery — 4.18% | |||||||||||
CNH Industrial NV | 125,200 | 2,093,344 | |||||||||
Cummins, Inc. | 5,800 | 1,414,098 | |||||||||
PACCAR, Inc. | 11,700 | 1,044,225 | |||||||||
4,551,667 | |||||||||||
TOTAL INDUSTRIALS | 12,394,407 |
Shares Held | Value | ||||||||||
INFORMATION TECHNOLOGY — 11.27% Communications Equipment — 2.74% | |||||||||||
F5 Networks, Inc. (a) | 9,800 | $ | 1,829,268 | ||||||||
Telefonaktiebolaget LM Ericsson — ADR | 91,000 | 1,144,780 | |||||||||
2,974,048 | |||||||||||
Electronic Equipment, Instruments & Components — 2.52% | |||||||||||
Corning, Inc. | 35,800 | 1,464,220 | |||||||||
TE Connectivity Ltd. | 9,400 | 1,270,974 | |||||||||
2,735,194 | |||||||||||
Semiconductors & Semiconductor Equipment — 0.42% | |||||||||||
Texas Instruments, Inc. | 2,400 | 461,520 | |||||||||
Software — 4.55% | |||||||||||
Microsoft Corp. | 11,000 | 2,979,900 | |||||||||
Oracle Corp. | 25,300 | 1,969,352 | |||||||||
4,949,252 | |||||||||||
Technology Hardware, Storage & Peripherals — 1.04% | |||||||||||
Hewlett Packard Enterprise Company | 77,900 | 1,135,782 | |||||||||
TOTAL INFORMATION TECHNOLOGY | 12,255,796 | ||||||||||
MATERIALS — 0.83% Containers & Packaging — 0.83% | |||||||||||
International Paper Company | 14,700 | 901,257 | |||||||||
TOTAL MATERIALS | 901,257 | ||||||||||
UTILITIES — 2.39% Electric Utilities — 2.39% | |||||||||||
PPL Corp. | 74,900 | 2,094,953 | |||||||||
The Southern Company | 8,300 | 502,233 | |||||||||
TOTAL UTILITIES | 2,597,186 | ||||||||||
Total common stocks (Cost $86,879,448) | 105,359,029 | ||||||||||
Total long-term investments (Cost $86,879,448) | 105,359,029 | ||||||||||
SHORT-TERM INVESTMENTS — 3.18% | Principal Amount | ||||||||||
Time Deposits — 3.18% | |||||||||||
Skandinaviska Enskilda Banken, 0.01%, 07/01/2021* | $ | 3,462,535 | 3,462,535 | ||||||||
Total short-term investments (Cost $3,462,535) | 3,462,535 | ||||||||||
Total investments — 100.05% (Cost $90,341,983) | 108,821,564 | ||||||||||
Liabilities in excess of other assets — (0.05)% | (55,555 | ) | |||||||||
Net assets — 100.00% | $ | 108,766,009 |
(a) — Non-income producing security.
ADR — American Depositary Receipt
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
17
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Large Cap Value Fund
Largest Equity Holdings | Percent of net assets | ||||||
Wells Fargo & Company | 5.14 | % | |||||
American International Group, Inc. | 4.80 | % | |||||
Citigroup, Inc. | 4.63 | % | |||||
General Electric Company | 4.53 | % | |||||
Anthem, Inc. | 3.70 | % | |||||
General Motors Company | 3.20 | % | |||||
Marathon Oil Corp. | 2.67 | % | |||||
Magna International, Inc. | 2.54 | % | |||||
Microsoft Corp. | 2.41 | % | |||||
The Goldman Sachs Group, Inc. | 2.31 | % |
COMMON STOCKS — 99.80% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 5.31% Media — 3.74% | |||||||||||
Comcast Corp. | 141,100 | $ | 8,045,522 | ||||||||
Discovery, Inc. (a) | 319,800 | 9,267,804 | |||||||||
17,313,326 | |||||||||||
Wireless Telecommunication Services — 1.57% | |||||||||||
Vodafone Group PLC — ADR | 424,744 | 7,275,865 | |||||||||
TOTAL COMMUNICATION SERVICES | 24,589,191 | ||||||||||
CONSUMER DISCRETIONARY — 7.45% Auto Components — 2.97% | |||||||||||
Adient PLC (a) | 43,691 | 1,974,833 | |||||||||
Magna International, Inc. | 126,800 | 11,746,752 | |||||||||
13,721,585 | |||||||||||
Automobiles — 3.72% | |||||||||||
General Motors Company (a) | 250,600 | 14,828,002 | |||||||||
Harley-Davidson, Inc. | 52,600 | 2,410,132 | |||||||||
17,238,134 | |||||||||||
Hotels, Restaurants & Leisure — 0.76% | |||||||||||
Booking Holdings, Inc. (a) | 1,600 | 3,500,944 | |||||||||
TOTAL CONSUMER DISCRETIONARY | 34,460,663 | ||||||||||
CONSUMER STAPLES — 2.78% Food Products — 0.99% | |||||||||||
Mondelez International, Inc. | 73,100 | 4,564,364 | |||||||||
Personal Products — 1.79% | |||||||||||
Unilever PLC — ADR | 141,600 | 8,283,600 | |||||||||
TOTAL CONSUMER STAPLES | 12,847,964 | ||||||||||
ENERGY — 13.59% Energy Equipment & Services — 3.55% | |||||||||||
Baker Hughes Company | 106,600 | 2,437,942 | |||||||||
Halliburton Company | 141,200 | 3,264,544 | |||||||||
NOV, Inc. (a) | 441,100 | 6,757,652 | |||||||||
Schlumberger NV | 124,200 | 3,975,642 | |||||||||
16,435,780 |
Shares Held | Value | ||||||||||
Oil, Gas & Consumable Fuels — 10.04% | |||||||||||
APA Corp. | 441,100 | $ | 9,540,993 | ||||||||
Hess Corp. | 118,300 | 10,329,956 | |||||||||
Marathon Oil Corp. | 905,700 | 12,335,634 | |||||||||
Marathon Petroleum Corp. | 59,093 | 3,570,399 | |||||||||
Murphy Oil Corp. | 66,170 | 1,540,437 | |||||||||
Royal Dutch Shell PLC — ADR | 226,672 | 9,157,549 | |||||||||
46,474,968 | |||||||||||
TOTAL ENERGY | 62,910,748 | ||||||||||
FINANCIALS — 29.19% Banks — 12.71% | |||||||||||
Bank of America Corp. | 196,049 | 8,083,101 | |||||||||
Citigroup, Inc. | 302,888 | 21,429,326 | |||||||||
Citizens Financial Group, Inc. | 120,200 | 5,513,574 | |||||||||
Wells Fargo & Company | 525,563 | 23,802,748 | |||||||||
58,828,749 | |||||||||||
Capital Markets — 6.76% | |||||||||||
The Bank of New York Mellon Corp. | 172,700 | 8,847,421 | |||||||||
Credit Suisse Group AG — ADR | 442,500 | 4,641,825 | |||||||||
The Goldman Sachs Group, Inc. | 28,200 | 10,702,746 | |||||||||
State Street Corp. | 86,100 | 7,084,308 | |||||||||
31,276,300 | |||||||||||
Diversified Financial Services — 2.00% | |||||||||||
Berkshire Hathaway, Inc. (a) | 26,000 | 7,225,920 | |||||||||
Equitable Holdings, Inc. | 66,800 | 2,034,060 | |||||||||
9,259,980 | |||||||||||
Insurance — 7.72% | |||||||||||
American International Group, Inc. | 467,000 | 22,229,200 | |||||||||
The Hartford Financial Services Group, Inc. | 85,200 | 5,279,844 | |||||||||
The Travelers Companies, Inc. | 54,900 | 8,219,079 | |||||||||
35,728,123 | |||||||||||
TOTAL FINANCIALS | 135,093,152 |
The accompanying notes are an integral part of these financial statements.
18
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Large Cap Value Fund
Shares Held | Value | ||||||||||
HEALTH CARE — 12.71% Health Care Equipment & Supplies — 2.49% | |||||||||||
Medtronic PLC | 62,500 | $ | 7,758,125 | ||||||||
Zimmer Biomet Holdings, Inc. | 23,400 | 3,763,188 | |||||||||
11,521,313 | |||||||||||
Health Care Providers & Services — 6.71% | |||||||||||
Anthem, Inc. | 44,900 | 17,142,820 | |||||||||
CVS Health Corp. | 66,100 | 5,515,384 | |||||||||
HCA Healthcare, Inc. | 18,300 | 3,783,342 | |||||||||
UnitedHealth Group, Inc. | 11,500 | 4,605,060 | |||||||||
31,046,606 | |||||||||||
Pharmaceuticals — 3.51% | |||||||||||
Bristol-Myers Squibb Company | 49,400 | 3,300,908 | |||||||||
GlaxoSmithKline PLC — ADR | 189,800 | 7,557,836 | |||||||||
Sanofi — ADR | 102,900 | 5,418,714 | |||||||||
16,277,458 | |||||||||||
TOTAL HEALTH CARE | 58,845,377 | ||||||||||
INDUSTRIALS — 11.78% Air Freight & Logistics — 1.91% | |||||||||||
FedEx Corp. | 29,700 | 8,860,401 | |||||||||
Industrial Conglomerates — 4.53% | |||||||||||
General Electric Company | 1,556,800 | 20,954,528 | |||||||||
Machinery — 5.34% | |||||||||||
CNH Industrial NV | 636,800 | 10,647,296 | |||||||||
Cummins, Inc. | 34,000 | 8,289,540 | |||||||||
PACCAR, Inc. | 64,700 | 5,774,475 | |||||||||
24,711,311 | |||||||||||
TOTAL INDUSTRIALS | 54,526,240 | ||||||||||
INFORMATION TECHNOLOGY — 13.22% Communications Equipment — 3.63% | |||||||||||
F5 Networks, Inc. (a) | 56,700 | 10,583,622 | |||||||||
Telefonaktiebolaget LM Ericsson — ADR | 493,200 | 6,204,456 | |||||||||
16,788,078 | |||||||||||
Electronic Equipment, Instruments & Components — 2.97% | |||||||||||
Corning, Inc. | 155,300 | 6,351,770 | |||||||||
TE Connectivity Ltd. | 54,700 | 7,395,987 | |||||||||
13,747,757 | |||||||||||
IT Services — 1.00% | |||||||||||
Euronet Worldwide, Inc. (a) | 34,200 | 4,628,970 | |||||||||
Software — 4.49% | |||||||||||
Microsoft Corp. | 41,100 | 11,133,990 | |||||||||
Oracle Corp. | 123,700 | 9,628,808 | |||||||||
20,762,798 |
Shares Held | Value | ||||||||||
Technology Hardware, Storage & Peripherals — 1.13% | |||||||||||
Hewlett Packard Enterprise Company | 359,400 | $ | 5,240,052 | ||||||||
TOTAL INFORMATION TECHNOLOGY | 61,167,655 | ||||||||||
MATERIALS — 1.14% Containers & Packaging — 1.14% | |||||||||||
International Paper Company | 85,800 | 5,260,398 | |||||||||
TOTAL MATERIALS | 5,260,398 | ||||||||||
UTILITIES — 2.63% Electric Utilities — 2.63% | |||||||||||
PPL Corp. | 331,500 | 9,272,055 | |||||||||
The Southern Company | 48,200 | 2,916,582 | |||||||||
TOTAL UTILITIES | 12,188,637 | ||||||||||
Total common stocks (Cost $358,351,106) | 461,890,025 | ||||||||||
Total long-term investments (Cost $358,351,106) | 461,890,025 | ||||||||||
SHORT-TERM INVESTMENTS — 0.17% | Principal Amount | ||||||||||
Time Deposits — 0.17% | |||||||||||
Bank of Montreal, 0.01%, 07/01/2021* | $ | 776,216 | 776,216 | ||||||||
Total short-term investments (Cost $776,216) | 776,216 | ||||||||||
Total investments — 99.97% (Cost $359,127,322) | 462,666,241 | ||||||||||
Other assets in excess of liabilities — 0.03% | 127,712 | ||||||||||
Net assets — 100.00% | $ | 462,793,953 |
(a) — Non-income producing security.
ADR — American Depositary Receipt
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
19
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Mid-Cap Value Fund
Largest Equity Holdings | Percent of net assets | ||||||
Popular, Inc. | 4.32 | % | |||||
Fluor Corp. | 3.58 | % | |||||
Citizens Financial Group, Inc. | 3.31 | % | |||||
Cairn Energy PLC | 3.28 | % | |||||
American International Group, Inc. | 3.24 | % | |||||
Kosmos Energy Ltd. | 3.23 | % | |||||
CNH Industrial NV | 3.11 | % | |||||
The ODP Corp. | 3.02 | % | |||||
Discovery, Inc. | 2.73 | % | |||||
CIT Group, Inc. | 2.58 | % |
COMMON STOCKS — 96.91% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 6.03% Media — 6.03% | |||||||||||
Discovery, Inc. (a) | 427,100 | $ | 12,377,358 | ||||||||
The Interpublic Group of Companies, Inc. | 143,500 | 4,662,315 | |||||||||
News Corp. | 169,600 | 4,370,592 | |||||||||
Omnicom Group, Inc. | 40,300 | 3,223,597 | |||||||||
ViacomCBS, Inc. | 58,700 | 2,653,240 | |||||||||
TOTAL COMMUNICATION SERVICES | 27,287,102 | ||||||||||
CONSUMER DISCRETIONARY — 11.68% Auto Components — 6.21% | |||||||||||
Adient PLC (a) | 221,900 | 10,029,880 | |||||||||
The Goodyear Tire & Rubber Company (a) | 456,800 | 7,834,120 | |||||||||
Lear Corp. | 11,300 | 1,980,664 | |||||||||
Magna International, Inc. | 89,300 | 8,272,752 | |||||||||
28,117,416 | |||||||||||
Automobiles — 0.45% | |||||||||||
Harley-Davidson, Inc. | 44,400 | 2,034,408 | |||||||||
Diversified Consumer Services — 0.93% | |||||||||||
H&R Block, Inc. | 179,500 | 4,214,660 | |||||||||
Household Durables — 1.07% | |||||||||||
Tri Pointe Homes, Inc. (a) | 23,500 | 503,605 | |||||||||
Whirlpool Corp. | 19,900 | 4,338,598 | |||||||||
4,842,203 | |||||||||||
Specialty Retail — 3.02% | |||||||||||
The ODP Corp. (a) | 284,245 | 13,646,603 | |||||||||
TOTAL CONSUMER DISCRETIONARY | 52,855,290 | ||||||||||
CONSUMER STAPLES — 0.78% Personal Products — 0.78% | |||||||||||
Herbalife Nutrition Ltd. (a) | 67,000 | 3,532,910 | |||||||||
TOTAL CONSUMER STAPLES | 3,532,910 |
Shares Held | Value | ||||||||||
ENERGY — 17.18% Energy Equipment & Services — 2.23% | |||||||||||
Frank's International NV (a) | 403,700 | $ | 1,223,211 | ||||||||
Halliburton Company | 76,500 | 1,768,680 | |||||||||
NexTier Oilfield Solutions, Inc. (a) | 1,258,765 | 5,991,721 | |||||||||
NOV, Inc. (a) | 72,000 | 1,103,040 | |||||||||
10,086,652 | |||||||||||
Oil, Gas & Consumable Fuels — 14.95% | |||||||||||
APA Corp. | 411,400 | 8,898,582 | |||||||||
Cairn Energy PLC (v) | 7,346,208 | 14,838,556 | |||||||||
Cenovus Energy, Inc. | 248,900 | 2,384,462 | |||||||||
Equitrans Midstream Corp. | 265,500 | 2,259,405 | |||||||||
Hess Corp. | 82,900 | 7,238,828 | |||||||||
Kosmos Energy Ltd. (a) | 4,220,620 | 14,603,345 | |||||||||
Marathon Oil Corp. | 371,200 | 5,055,744 | |||||||||
Oasis Petroleum, Inc. | 41,000 | 4,122,550 | |||||||||
PDC Energy, Inc. | 113,400 | 5,192,586 | |||||||||
Range Resources Corp. (a) | 184,600 | 3,093,896 | |||||||||
67,687,954 | |||||||||||
TOTAL ENERGY | 77,774,606 | ||||||||||
FINANCIALS — 25.57% Banks — 11.36% | |||||||||||
CIT Group, Inc. | 226,724 | 11,696,691 | |||||||||
Citizens Financial Group, Inc. | 326,200 | 14,962,794 | |||||||||
First Horizon Corp. | 300,700 | 5,196,096 | |||||||||
Popular, Inc. | 260,800 | 19,573,040 | |||||||||
51,428,621 | |||||||||||
Capital Markets — 4.46% | |||||||||||
Credit Suisse Group AG — ADR | 641,200 | 6,726,188 | |||||||||
Lazard Ltd. | 40,900 | 1,850,725 | |||||||||
Northern Trust Corp. | 32,500 | 3,757,650 | |||||||||
State Street Corp. | 95,200 | 7,833,056 | |||||||||
20,167,619 |
The accompanying notes are an integral part of these financial statements.
20
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Mid-Cap Value Fund
Shares Held | Value | ||||||||||
Consumer Finance — 1.28% | |||||||||||
Discover Financial Services | 19,200 | $ | 2,271,168 | ||||||||
SLM Corp. | 168,400 | 3,526,296 | |||||||||
5,797,464 | |||||||||||
Diversified Financial Services — 0.87% | |||||||||||
Equitable Holdings, Inc. | 129,100 | 3,931,095 | |||||||||
Insurance — 7.60% | |||||||||||
Alleghany Corp. (a) | 2,800 | 1,867,796 | |||||||||
American International Group, Inc. | 308,500 | 14,684,600 | |||||||||
CNO Financial Group, Inc. | 368,600 | 8,706,332 | |||||||||
Enstar Group Ltd. (a) | 23,200 | 5,542,944 | |||||||||
The Hartford Financial Services Group, Inc. | 58,400 | 3,619,048 | |||||||||
34,420,720 | |||||||||||
TOTAL FINANCIALS | 115,745,519 | ||||||||||
HEALTH CARE — 3.21% Health Care Providers & Services — 3.21% | |||||||||||
Centene Corp. (a) | 121,300 | 8,846,409 | |||||||||
Universal Health Services, Inc. | 38,700 | 5,666,841 | |||||||||
TOTAL HEALTH CARE | 14,513,250 | ||||||||||
INDUSTRIALS — 15.55% Aerospace & Defense — 0.95% | |||||||||||
Embraer SA — ADR (a) | 284,300 | 4,304,302 | |||||||||
Air Freight & Logistics — 2.43% | |||||||||||
Royal Mail PLC (v) | 1,374,700 | 10,991,870 | |||||||||
Construction & Engineering — 3.58% | |||||||||||
Fluor Corp. (a) | 915,500 | 16,204,350 | |||||||||
Machinery — 5.01% | |||||||||||
Allison Transmission Holdings, Inc. | 105,600 | 4,196,544 | |||||||||
CNH Industrial NV | 841,500 | 14,069,880 | |||||||||
PACCAR, Inc. | 49,200 | 4,391,100 | |||||||||
22,657,524 | |||||||||||
Professional Services — 1.64% | |||||||||||
KBR, Inc. | 195,100 | 7,443,065 | |||||||||
Road & Rail — 1.94% | |||||||||||
AMERCO | 14,900 | 8,782,060 | |||||||||
TOTAL INDUSTRIALS | 70,383,171 | ||||||||||
INFORMATION TECHNOLOGY — 10.55% Communications Equipment — 3.38% | |||||||||||
CommScope Holding Company, Inc. (a) | 288,700 | 6,152,197 | |||||||||
F5 Networks, Inc. (a) | 35,900 | 6,701,094 | |||||||||
Telefonaktiebolaget LM Ericsson — ADR | 192,800 | 2,425,424 | |||||||||
15,278,715 | |||||||||||
Electronic Equipment, Instruments & Components — 3.88% | |||||||||||
Arrow Electronics, Inc. (a) | 61,700 | 7,023,311 | |||||||||
Avnet, Inc. | 98,300 | 3,939,864 | |||||||||
Corning, Inc. | 160,700 | 6,572,630 | |||||||||
17,535,805 |
Shares Held | Value | ||||||||||
IT Services — 1.71% | |||||||||||
Euronet Worldwide, Inc. (a) | 57,200 | $ | 7,742,020 | ||||||||
Technology Hardware, Storage & Peripherals — 1.58% | |||||||||||
Hewlett Packard Enterprise Company | 491,600 | 7,167,528 | |||||||||
TOTAL INFORMATION TECHNOLOGY | 47,724,068 | ||||||||||
MATERIALS — 1.00% Chemicals — 1.00% | |||||||||||
Huntsman Corp. | 171,200 | 4,540,224 | |||||||||
TOTAL MATERIALS | 4,540,224 | ||||||||||
REAL ESTATE — 0.71% Equity Real Estate Investment Trusts — 0.71% | |||||||||||
Pebblebrook Hotel Trust | 44,000 | 1,036,200 | |||||||||
Vornado Realty Trust | 47,000 | 2,193,490 | |||||||||
TOTAL REAL ESTATE | 3,229,690 | ||||||||||
UTILITIES — 4.65% Electric Utilities — 2.20% | |||||||||||
NRG Energy, Inc. | 247,500 | 9,974,250 | |||||||||
Independent Power and Renewable Electricity Producers — 2.45% | |||||||||||
Vistra Corp. | 596,500 | 11,065,075 | |||||||||
TOTAL UTILITIES | 21,039,325 | ||||||||||
Total common stocks (Cost $348,925,675) | 438,625,155 | ||||||||||
Total long-term investments (Cost $348,925,675) | 438,625,155 | ||||||||||
SHORT-TERM INVESTMENTS — 3.12% | Principal Amount | ||||||||||
Time Deposits — 3.12% | |||||||||||
Banco Bilbao Vizcaya Argentaria SA, 0.01%, 07/01/2021* | $ | 13,057,441 | 13,057,441 | ||||||||
Citigroup, Inc., 0.01%, 07/01/2021* | GBP | 758,737 | 1,049,559 | ||||||||
Total short-term investments (Cost $14,047,336) | 14,107,000 | ||||||||||
Total investments — 100.03% (Cost $362,973,011) | 452,732,155 | ||||||||||
Liabilities in excess of other assets — (0.03)% | (115,831 | ) | |||||||||
Net assets — 100.00% | $ | 452,616,324 |
(a) — Non-income producing security.
(v) — Security was fair valued as a result of market movements following the close of local trading using a third-party vendor's proprietary fair value pricing model. The total market value of these securities was $25,830,426, which represented 5.71% of net assets. See Security Valuation in Note 1 in Notes to the Financial Statements.
ADR — American Depositary Receipt
GBP — British Pound
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
21
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Value Fund
Largest Equity Holdings | Percent of net assets | ||||||
Range Resources Corp. | 4.54 | % | |||||
Popular, Inc. | 4.53 | % | |||||
Seritage Growth Properties | 4.26 | % | |||||
The ODP Corp. | 3.80 | % | |||||
Enstar Group Ltd. | 3.67 | % | |||||
Fluor Corp. | 3.66 | % | |||||
MDC Partners, Inc. | 3.43 | % | |||||
Euronet Worldwide, Inc. | 3.36 | % | |||||
The Bank of NT Butterfield & Son Ltd. | 3.20 | % | |||||
AMERCO | 3.06 | % |
COMMON STOCKS — 97.78% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 3.43% Media — 3.43% | |||||||||||
MDC Partners, Inc. (a) (l) | 3,277,700 | $ | 19,174,545 | ||||||||
TOTAL COMMUNICATION SERVICES | 19,174,545 | ||||||||||
CONSUMER DISCRETIONARY — 7.67% Automobiles — 0.32% | |||||||||||
Harley-Davidson, Inc. | 39,200 | 1,796,144 | |||||||||
Diversified Consumer Services — 1.42% | |||||||||||
H&R Block, Inc. | 339,100 | 7,962,068 | |||||||||
Hotels, Restaurants & Leisure — 0.50% | |||||||||||
International Game Technology PLC (a) | 116,700 | 2,796,132 | |||||||||
Internet & Catalog Retail — 1.05% | |||||||||||
Points International Ltd. (a) | 341,700 | 5,877,240 | |||||||||
Specialty Retail — 4.38% | |||||||||||
The ODP Corp. (a) | 442,580 | 21,248,266 | |||||||||
Sonic Automotive, Inc. | 73,200 | 3,274,968 | |||||||||
24,523,234 | |||||||||||
TOTAL CONSUMER DISCRETIONARY | 42,954,818 | ||||||||||
ENERGY — 15.09% Energy Equipment & Services — 3.77% | |||||||||||
Frank's International NV (a) (l) | 3,965,300 | 12,014,859 | |||||||||
KLX Energy Services Holdings, Inc. (a) (l) | 17,141 | 163,696 | |||||||||
NexTier Oilfield Solutions, Inc. (a) | 682,137 | 3,246,972 | |||||||||
NOV, Inc. (a) | 369,200 | 5,656,144 | |||||||||
21,081,671 | |||||||||||
Oil, Gas & Consumable Fuels — 11.32% | |||||||||||
Altus Midstream Company (l) | 50,495 | 3,408,917 | |||||||||
APA Corp. | 159,100 | 3,441,333 | |||||||||
Berry Corp. | 234,400 | 1,575,168 | |||||||||
Cairn Energy PLC (v) | 471,400 | 952,178 | |||||||||
Equitrans Midstream Corp. | 993,500 | 8,454,685 | |||||||||
Kosmos Energy Ltd. (a) | 1,575,000 | 5,449,500 | |||||||||
Murphy Oil Corp. | 182,800 | 4,255,584 |
Shares Held | Value | ||||||||||
Oasis Petroleum, Inc. | 54,400 | $ | 5,469,920 | ||||||||
Penn Virginia Corp. (a) | 71,400 | 1,685,754 | |||||||||
Range Resources Corp. (a) | 1,515,500 | 25,399,780 | |||||||||
Rockhopper Exploration PLC (a) | 3,066,400 | 402,966 | |||||||||
Whiting Petroleum Corp. (a) | 52,700 | 2,874,785 | |||||||||
63,370,570 | |||||||||||
TOTAL ENERGY | 84,452,241 | ||||||||||
FINANCIALS — 25.60% Banks — 12.83% | |||||||||||
Associated Banc-Corp | 66,800 | 1,368,064 | |||||||||
The Bank of NT Butterfield & Son Ltd. | 505,700 | 17,927,065 | |||||||||
First BanCorp | 664,400 | 7,919,648 | |||||||||
First Hawaiian, Inc. | 581,000 | 16,465,540 | |||||||||
Investors Bancorp, Inc. | 195,800 | 2,792,108 | |||||||||
Popular, Inc. | 337,700 | 25,344,385 | |||||||||
71,816,810 | |||||||||||
Capital Markets — 3.09% | |||||||||||
Evercore, Inc. | 91,300 | 12,852,301 | |||||||||
Lazard Ltd. | 42,500 | 1,923,125 | |||||||||
Stifel Financial Corp. | 38,400 | 2,490,624 | |||||||||
17,266,050 | |||||||||||
Consumer Finance — 2.28% | |||||||||||
SLM Corp. | 609,500 | 12,762,930 | |||||||||
Insurance — 7.15% | |||||||||||
CNO Financial Group, Inc. | 121,900 | 2,879,278 | |||||||||
Enstar Group Ltd. (a) | 85,879 | 20,518,211 | |||||||||
Global Indemnity Group LLC | 316,036 | 8,327,548 | |||||||||
Horace Mann Educators Corp. | 221,600 | 8,292,272 | |||||||||
40,017,309 | |||||||||||
Thrifts & Mortgage Finance — 0.25% | |||||||||||
Luther Burbank Corp. | 117,800 | 1,397,108 | |||||||||
TOTAL FINANCIALS | 143,260,207 |
The accompanying notes are an integral part of these financial statements.
22
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Value Fund
Shares Held | Value | ||||||||||
HEALTH CARE — 3.64% Health Care Providers & Services — 3.64% | |||||||||||
Hanger, Inc. (a) | 304,600 | $ | 7,700,288 | ||||||||
Triple-S Management Corp. (a) | 569,500 | 12,682,765 | |||||||||
TOTAL HEALTH CARE | 20,383,053 | ||||||||||
INDUSTRIALS — 21.28% Building Products — 1.09% | |||||||||||
Armstrong Flooring, Inc. (a) | 796,200 | 4,928,478 | |||||||||
Resideo Technologies, Inc. (a) | 39,080 | 1,172,400 | |||||||||
6,100,878 | |||||||||||
Commercial Services & Supplies — 1.08% | |||||||||||
The Brink's Company | 55,800 | 4,287,672 | |||||||||
Quad/Graphics, Inc. (a) | 419,100 | 1,739,265 | |||||||||
6,026,937 | |||||||||||
Construction & Engineering — 3.66% | |||||||||||
Fluor Corp. (a) | 1,157,100 | 20,480,670 | |||||||||
Machinery — 7.87% | |||||||||||
Allison Transmission Holdings, Inc. | 206,300 | 8,198,362 | |||||||||
Crane Company | 82,300 | 7,602,051 | |||||||||
EnPro Industries, Inc. | 163,500 | 15,884,025 | |||||||||
The Greenbrier Companies, Inc. | 99,600 | 4,340,568 | |||||||||
Meritor, Inc. (a) | 242,700 | 5,684,034 | |||||||||
Miller Industries, Inc. | 59,700 | 2,354,568 | |||||||||
44,063,608 | |||||||||||
Professional Services — 4.22% | |||||||||||
Hudson Global, Inc. (a) (o) | 192,560 | 3,375,577 | |||||||||
KBR, Inc. | 404,400 | 15,427,860 | |||||||||
Korn Ferry | 66,400 | 4,817,320 | |||||||||
23,620,757 | |||||||||||
Road & Rail — 3.06% | |||||||||||
AMERCO | 29,100 | 17,151,540 | |||||||||
Trading Companies & Distributors — 0.30% | |||||||||||
Rush Enterprises, Inc. | 38,350 | 1,658,254 | |||||||||
TOTAL INDUSTRIALS | 119,102,644 | ||||||||||
INFORMATION TECHNOLOGY — 11.45% Communications Equipment — 0.89% | |||||||||||
Casa Systems, Inc. (a) | 75,500 | 669,685 | |||||||||
CommScope Holding Company, Inc. (a) | 201,300 | 4,289,703 | |||||||||
4,959,388 | |||||||||||
Electronic Equipment, Instruments & Components — 4.27% | |||||||||||
Arrow Electronics, Inc. (a) | 133,000 | 15,139,390 | |||||||||
Avnet, Inc. | 62,000 | 2,484,960 | |||||||||
Belden, Inc. | 123,700 | 6,255,509 | |||||||||
23,879,859 | |||||||||||
IT Services — 4.49% | |||||||||||
Euronet Worldwide, Inc. (a) | 138,800 | 18,786,580 | |||||||||
Sabre Corp. (a) | 508,900 | 6,351,072 | |||||||||
25,137,652 |
Shares Held | Value | ||||||||||
Semiconductors & Semiconductor Equipment — 1.80% | |||||||||||
Diodes, Inc. (a) | 126,600 | $ | 10,098,882 | ||||||||
TOTAL INFORMATION TECHNOLOGY | 64,075,781 | ||||||||||
MATERIALS — 0.01% Metals & Mining — 0.01% | |||||||||||
Noranda Aluminum Holding Corp. (a) (i) (o) | 800,300 | 40,015 | |||||||||
TOTAL MATERIALS | 40,015 | ||||||||||
REAL ESTATE — 5.00% Equity Real Estate Investment Trusts — 4.26% | |||||||||||
Seritage Growth Properties (a) (l) | 1,296,100 | 23,848,240 | |||||||||
Real Estate Management & Development — 0.74% | |||||||||||
The RMR Group, Inc. | 107,200 | 4,142,208 | |||||||||
TOTAL REAL ESTATE | 27,990,448 | ||||||||||
UTILITIES — 4.61% Electric Utilities — 2.32% | |||||||||||
Hawaiian Electric Industries, Inc. | 91,100 | 3,851,708 | |||||||||
Portland General Electric Company | 198,000 | 9,123,840 | |||||||||
12,975,548 | |||||||||||
Multi-Utilities — 2.29% | |||||||||||
Avista Corp. | 301,100 | 12,847,937 | |||||||||
TOTAL UTILITIES | 25,823,485 | ||||||||||
Total common stocks (Cost $450,274,413) | 547,257,237 | ||||||||||
Total long-term investments (Cost $450,274,413) | 547,257,237 | ||||||||||
COLLATERAL FOR SECURITIES ON LOAN — 3.72% | |||||||||||
Money Market Funds — 3.72% | |||||||||||
Invesco Short-Term Investments Trust Government & Agency Portfolio — Institutional Class, 0.03%^ | 20,827,764 | 20,827,764 | |||||||||
Total collateral for securities on loan (Cost $20,827,764) | 20,827,764 | ||||||||||
SHORT-TERM INVESTMENTS — 1.96% | Principal Amount | ||||||||||
Time Deposits — 1.96% | |||||||||||
National Australia Bank Ltd., 0.01%, 07/01/2021* | $ | 10,968,071 | 10,968,071 | ||||||||
Total short-term investments (Cost $10,968,071) | 10,968,071 | ||||||||||
Total investments — 103.46% (Cost $482,070,248) | 579,053,072 | ||||||||||
Liabilities in excess of other assets — (3.46)% | (19,346,350 | ) | |||||||||
Net assets — 100.00% | $ | 559,706,722 |
(a) — Non-income producing security.
(i) — Illiquid security. The total market value of these securities was $40,015, which represented 0.01% of net assets.
(l) — All or a portion of this security is on loan. The total market value of securities on loan was $20,292,470. The remaining contractual maturity of all of the securities lending transactions is overnight and continuous.
The accompanying notes are an integral part of these financial statements.
23
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Value Fund
(o) — Affiliated issuer. See Note 6 in Notes to the Financial Statements.
(v) — Security was fair valued as a result of market movements following the close of local trading using a third-party vendor's proprietary fair value pricing model. The total market value of these securities was $952,178, which represented 0.17% of net assets. See Security Valuation in Note 1 in Notes to Financial Statements.
^ — Rate shown is the 7-day yield as of June 30, 2021.
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
24
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Diversified Value Fund
Largest Equity Holdings | Percent of net assets | ||||||
Range Resources Corp. | 0.58 | % | |||||
Whiting Petroleum Corp. | 0.52 | % | |||||
Bonanza Creek Energy, Inc. | 0.51 | % | |||||
Northern Oil and Gas, Inc. | 0.51 | % | |||||
Oasis Petroleum, Inc. | 0.50 | % | |||||
Genesco, Inc. | 0.49 | % | |||||
NexTier Oilfield Solutions, Inc. | 0.46 | % | |||||
The Goodyear Tire & Rubber Company | 0.46 | % | |||||
Interface, Inc. | 0.44 | % | |||||
Customers Bancorp, Inc. | 0.44 | % |
COMMON STOCKS — 98.47% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 0.97% Media — 0.97% | |||||||||||
Emerald Holding, Inc. (a) | 318,450 | $ | 1,716,446 | ||||||||
Entravision Communications Corp. | 93,665 | 625,682 | |||||||||
MDC Partners, Inc. (a) | 113,100 | 661,635 | |||||||||
MSG Networks, Inc. (a) | 54,300 | 791,694 | |||||||||
TEGNA, Inc. | 23,067 | 432,737 | |||||||||
TOTAL COMMUNICATION SERVICES | 4,228,194 | ||||||||||
CONSUMER DISCRETIONARY — 13.08% Auto Components — 1.16% | |||||||||||
Adient PLC (a) | 38,205 | 1,726,866 | |||||||||
The Goodyear Tire & Rubber Company (a) | 116,887 | 2,004,612 | |||||||||
Motorcar Parts of America, Inc. (a) | 59,969 | 1,345,704 | |||||||||
5,077,182 | |||||||||||
Diversified Consumer Services — 0.40% | |||||||||||
H&R Block, Inc. | 73,900 | 1,735,172 | |||||||||
Hotels, Restaurants & Leisure — 1.50% | |||||||||||
Brinker International, Inc. (a) | 13,770 | 851,675 | |||||||||
Hilton Grand Vacations, Inc. (a) | 42,752 | 1,769,505 | |||||||||
International Game Technology PLC (a) | 50,900 | 1,219,564 | |||||||||
Jack in the Box, Inc. | 12,600 | 1,404,144 | |||||||||
Travel + Leisure Company | 21,880 | 1,300,766 | |||||||||
6,545,654 | |||||||||||
Household Durables — 3.25% | |||||||||||
Century Communities, Inc. | 18,496 | 1,230,724 | |||||||||
Ethan Allen Interiors, Inc. | 63,505 | 1,752,738 | |||||||||
Green Brick Partners, Inc. (a) | 19,250 | 437,745 | |||||||||
Hooker Furniture Corp. | 37,475 | 1,298,134 | |||||||||
KB Home | 8,600 | 350,192 | |||||||||
La-Z-Boy, Inc. | 25,900 | 959,336 | |||||||||
LGI Homes, Inc. (a) | 8,200 | 1,327,908 |
Shares Held | Value | ||||||||||
M/I Homes, Inc. (a) | 28,923 | $ | 1,696,912 | ||||||||
Meritage Homes Corp. (a) | 18,400 | 1,731,072 | |||||||||
Taylor Morrison Home Corp. (a) | 65,910 | 1,741,342 | |||||||||
Tri Pointe Homes, Inc. (a) | 80,041 | 1,715,279 | |||||||||
14,241,382 | |||||||||||
Internet & Catalog Retail — 0.10% | |||||||||||
PetMed Express, Inc. | 14,300 | 455,455 | |||||||||
Leisure Products — 0.29% | |||||||||||
Johnson Outdoors, Inc. | 10,600 | 1,282,600 | |||||||||
Multiline Retail — 0.61% | |||||||||||
Big Lots, Inc. | 14,540 | 959,785 | |||||||||
Dillard's, Inc. | 4,810 | 870,033 | |||||||||
Franchise Group, Inc. | 23,600 | 832,372 | |||||||||
2,662,190 | |||||||||||
Specialty Retail — 5.04% | |||||||||||
American Eagle Outfitters, Inc. | 25,600 | 960,768 | |||||||||
Asbury Automotive Group, Inc. (a) | 9,664 | 1,656,120 | |||||||||
The Cato Corp. | 93,000 | 1,568,910 | |||||||||
Foot Locker, Inc. | 13,500 | 832,005 | |||||||||
Genesco, Inc. (a) | 33,930 | 2,160,663 | |||||||||
Group 1 Automotive, Inc. | 11,328 | 1,749,383 | |||||||||
Hibbett, Inc. (a) | 16,973 | 1,521,290 | |||||||||
MarineMax, Inc. (a) | 18,600 | 906,564 | |||||||||
The ODP Corp. (a) | 27,201 | 1,305,920 | |||||||||
OneWater Marine, Inc. | 31,700 | 1,332,351 | |||||||||
Penske Automotive Group, Inc. | 11,200 | 845,488 | |||||||||
Rent-A-Center, Inc. | 24,300 | 1,289,601 | |||||||||
Sonic Automotive, Inc. | 41,650 | 1,863,421 | |||||||||
Sportsman's Warehouse Holdings, Inc. (a) | 98,000 | 1,741,460 | |||||||||
Tilly's, Inc. | 30,100 | 480,998 |
The accompanying notes are an integral part of these financial statements.
25
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Urban Outfitters, Inc. (a) | 20,910 | $ | 861,910 | ||||||||
Zumiez, Inc. (a) | 19,700 | 965,103 | |||||||||
22,041,955 | |||||||||||
Textiles, Apparel & Luxury Goods — 0.73% | |||||||||||
Culp, Inc. | 25,700 | 418,910 | |||||||||
G-III Apparel Group Ltd. (a) | 28,040 | 921,394 | |||||||||
Rocky Brands, Inc. | 7,900 | 439,240 | |||||||||
Vera Bradley, Inc. (a) | 114,400 | 1,417,416 | |||||||||
3,196,960 | |||||||||||
TOTAL CONSUMER DISCRETIONARY | 57,238,550 | ||||||||||
CONSUMER STAPLES — 2.33% Food & Staples Retailing — 1.09% | |||||||||||
Ingles Markets, Inc. | 23,900 | 1,392,652 | |||||||||
Natural Grocers by Vitamin Cottage, Inc. | 78,900 | 847,386 | |||||||||
Sprouts Farmers Market, Inc. (a) | 34,400 | 854,840 | |||||||||
Village Super Market, Inc. | 35,786 | 841,329 | |||||||||
Weis Markets, Inc. | 16,400 | 847,224 | |||||||||
4,783,431 | |||||||||||
Food Products — 0.31% | |||||||||||
B&G Foods, Inc. (l) | 41,700 | 1,367,760 | |||||||||
Household Products — 0.41% | |||||||||||
Central Garden & Pet Company (a) | 23,400 | 1,238,562 | |||||||||
Energizer Holdings, Inc. | 12,300 | 528,654 | |||||||||
1,767,216 | |||||||||||
Personal Products — 0.52% | |||||||||||
Nu Skin Enterprises, Inc. | 17,050 | 965,883 | |||||||||
USANA Health Sciences, Inc. (a) | 12,800 | 1,311,104 | |||||||||
2,276,987 | |||||||||||
TOTAL CONSUMER STAPLES | 10,195,394 | ||||||||||
ENERGY — 9.86% Energy Equipment & Services — 3.40% | |||||||||||
Cactus, Inc. | 26,130 | 959,494 | |||||||||
ChampionX Corp. (a) | 53,900 | 1,382,535 | |||||||||
Core Laboratories NV | 13,400 | 521,930 | |||||||||
Dril-Quip, Inc. (a) | 26,000 | 879,580 | |||||||||
Frank's International NV (a) | 565,420 | 1,713,223 | |||||||||
Helix Energy Solutions Group, Inc. (a) | 230,700 | 1,317,297 | |||||||||
Hoegh LNG Partners LP (l) | 21,060 | 370,445 | |||||||||
Liberty Oilfield Services, Inc. (a) | 95,900 | 1,357,944 | |||||||||
NexTier Oilfield Solutions, Inc. (a) | 423,888 | 2,017,706 | |||||||||
Oil States International, Inc. (a) | 64,000 | 502,400 | |||||||||
ProPetro Holding Corp. (a) | 105,250 | 964,090 | |||||||||
Select Energy Services, Inc. (a) | 168,800 | 1,019,552 |
Shares Held | Value | ||||||||||
Solaris Oilfield Infrastructure, Inc. | 135,100 | $ | 1,315,874 | ||||||||
TechnipFMC PLC (a) | 59,700 | 540,285 | |||||||||
14,862,355 | |||||||||||
Oil, Gas & Consumable Fuels — 6.46% | |||||||||||
Berry Corp. | 169,070 | 1,136,150 | |||||||||
Bonanza Creek Energy, Inc. | 47,730 | 2,246,651 | |||||||||
BP Midstream Partners LP | 35,400 | 512,592 | |||||||||
CVR Energy, Inc. | 23,200 | 416,672 | |||||||||
Delek US Holdings, Inc. | 1,834 | 39,651 | |||||||||
Earthstone Energy, Inc. (a) | 165,287 | 1,829,727 | |||||||||
Equitrans Midstream Corp. | 196,500 | 1,672,215 | |||||||||
Green Plains, Inc. (a) | 18,300 | 615,246 | |||||||||
HollyFrontier Corp. | 24,500 | 806,050 | |||||||||
Kosmos Energy Ltd. (a) | 397,013 | 1,373,665 | |||||||||
Murphy Oil Corp. | 77,700 | 1,808,856 | |||||||||
Northern Oil and Gas, Inc. | 106,400 | 2,209,928 | |||||||||
Oasis Petroleum, Inc. | 21,800 | 2,191,990 | |||||||||
PDC Energy, Inc. | 31,398 | 1,437,714 | |||||||||
Penn Virginia Corp. (a) | 67,400 | 1,591,314 | |||||||||
Range Resources Corp. (a) | 151,200 | 2,534,113 | |||||||||
Rattler Midstream LP | 76,700 | 837,564 | |||||||||
REX American Resources Corp. (a) | 12,178 | 1,098,212 | |||||||||
Shell Midstream Partners LP | 56,300 | 831,551 | |||||||||
Whiting Petroleum Corp. (a) | 42,000 | 2,291,100 | |||||||||
World Fuel Services Corp. | 25,024 | 794,012 | |||||||||
28,274,973 | |||||||||||
TOTAL ENERGY | 43,137,328 | ||||||||||
FINANCIALS — 33.53% Banks — 20.66% | |||||||||||
1st Source Corp. | 18,206 | 845,851 | |||||||||
Amalgamated Financial Corp. | 43,100 | 673,653 | |||||||||
Associated Banc-Corp | 83,300 | 1,705,984 | |||||||||
BankUnited, Inc. | 40,010 | 1,708,027 | |||||||||
Bar Harbor Bankshares | 19,716 | 564,272 | |||||||||
Berkshire Hills Bancorp, Inc. | 68,700 | 1,883,066 | |||||||||
BOK Financial Corp. | 12,100 | 1,047,860 | |||||||||
Brookline Bancorp, Inc. | 81,976 | 1,225,541 | |||||||||
Bryn Mawr Bank Corp. | 15,280 | 644,663 | |||||||||
Cadence BanCorp | 59,300 | 1,238,184 | |||||||||
Camden National Corp. | 7,716 | 368,516 | |||||||||
Cathay General Bancorp | 35,232 | 1,386,732 | |||||||||
Central Pacific Financial Corp. | 31,200 | 813,072 | |||||||||
CIT Group, Inc. | 35,400 | 1,826,286 |
The accompanying notes are an integral part of these financial statements.
26
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Civista Bancshares, Inc. | 18,900 | $ | 417,690 | ||||||||
CNB Financial Corp. | 16,300 | 371,966 | |||||||||
Community Trust Bancorp, Inc. | 26,610 | 1,074,512 | |||||||||
ConnectOne Bancorp, Inc. | 53,300 | 1,394,861 | |||||||||
CrossFirst Bankshares, Inc. (a) | 61,700 | 848,375 | |||||||||
Customers Bancorp, Inc. (a) | 49,244 | 1,920,023 | |||||||||
Dime Community Bancshares, Inc. | 50,998 | 1,714,553 | |||||||||
Eagle Bancorp, Inc. | 30,230 | 1,695,298 | |||||||||
Equity Bancshares, Inc. (a) | 38,300 | 1,167,767 | |||||||||
FB Financial Corp. | 37,225 | 1,389,237 | |||||||||
Financial Institutions, Inc. | 28,661 | 859,830 | |||||||||
First BanCorp | 145,786 | 1,737,769 | |||||||||
First Busey Corp. | 32,400 | 798,984 | |||||||||
First Business Financial Services, Inc. | 13,765 | 372,619 | |||||||||
First Financial Bancorp | 51,750 | 1,222,853 | |||||||||
First Financial Corp. | 31,763 | 1,296,566 | |||||||||
First Hawaiian, Inc. | 61,740 | 1,749,712 | |||||||||
First Internet Bancorp | 28,189 | 873,295 | |||||||||
First Midwest Bancorp, Inc. | 63,400 | 1,257,222 | |||||||||
The First of Long Island Corp. | 39,280 | 833,914 | |||||||||
Flushing Financial Corp. | 77,218 | 1,654,782 | |||||||||
FNB Corp. | 99,580 | 1,227,821 | |||||||||
Fulton Financial Corp. | 116,040 | 1,831,110 | |||||||||
Great Southern Bancorp, Inc. | 23,210 | 1,251,019 | |||||||||
Great Western Bancorp, Inc. | 55,586 | 1,822,665 | |||||||||
Hancock Whitney Corp. | 39,000 | 1,733,160 | |||||||||
Hanmi Financial Corp. | 90,267 | 1,720,489 | |||||||||
Hilltop Holdings, Inc. | 25,527 | 929,183 | |||||||||
HomeTrust Bancshares, Inc. | 15,049 | 419,867 | |||||||||
Hope Bancorp, Inc. | 128,733 | 1,825,434 | |||||||||
Horizon Bancorp, Inc. | 46,200 | 805,266 | |||||||||
International Bancshares Corp. | 18,436 | 791,642 | |||||||||
Investors Bancorp, Inc. | 88,564 | 1,262,923 | |||||||||
Lakeland Bancorp, Inc. | 73,330 | 1,281,808 | |||||||||
Live Oak Bancshares, Inc. | 23,655 | 1,395,645 | |||||||||
Mercantile Bank Corp. | 28,700 | 866,740 | |||||||||
Metropolitan Bank Holding Corp. (a) | 16,500 | 993,630 | |||||||||
Midland States Bancorp, Inc. | 55,513 | 1,458,327 | |||||||||
MidWestOne Financial Group, Inc. | 27,994 | 805,387 | |||||||||
Northrim BanCorp, Inc. | 8,684 | 371,241 | |||||||||
OceanFirst Financial Corp. | 59,610 | 1,242,272 | |||||||||
Orrstown Financial Services, Inc. | 22,379 | 516,284 | |||||||||
PacWest Bancorp | 44,400 | 1,827,503 |
Shares Held | Value | ||||||||||
Peapack-Gladstone Financial Corp. | 39,136 | $ | 1,215,956 | ||||||||
Peoples Bancorp, Inc. | 13,630 | 403,721 | |||||||||
Popular, Inc. | 23,000 | 1,726,150 | |||||||||
Preferred Bank | 19,200 | 1,214,784 | |||||||||
Primis Financial Corp. | 56,456 | 861,519 | |||||||||
RBB Bancorp | 33,032 | 800,035 | |||||||||
Republic Bancorp, Inc. | 13,870 | 639,823 | |||||||||
S&T Bancorp, Inc. | 54,800 | 1,715,240 | |||||||||
Sandy Spring Bancorp, Inc. | 8,475 | 374,002 | |||||||||
Sierra Bancorp | 16,900 | 430,105 | |||||||||
Simmons First National Corp. | 12,900 | 378,486 | |||||||||
Synovus Financial Corp. | 38,650 | 1,695,962 | |||||||||
Texas Capital Bancshares, Inc. (a) | 26,890 | 1,707,246 | |||||||||
Towne Bank | 40,600 | 1,235,052 | |||||||||
TriCo Bancshares | 8,794 | 374,449 | |||||||||
TriState Capital Holdings, Inc. (a) | 41,300 | 842,107 | |||||||||
Trustmark Corp. | 13,201 | 406,591 | |||||||||
Umpqua Holdings Corp. | 71,130 | 1,312,349 | |||||||||
Univest Financial Corp. | 30,450 | 802,967 | |||||||||
Valley National Bancorp | 61,900 | 831,317 | |||||||||
Washington Trust Bancorp, Inc. | 18,630 | 956,651 | |||||||||
Webster Financial Corp. | 31,400 | 1,674,876 | |||||||||
Wintrust Financial Corp. | 24,250 | 1,834,027 | |||||||||
90,396,366 | |||||||||||
Capital Markets — 2.64% | |||||||||||
AllianceBernstein Holding LP | 18,354 | 854,562 | |||||||||
Brightsphere Investment Group, Inc. | 59,413 | 1,392,047 | |||||||||
Cowen, Inc. | 44,500 | 1,826,724 | |||||||||
Diamond Hill Investment Group, Inc. | 5,000 | 836,550 | |||||||||
Evercore, Inc. | 6,310 | 888,259 | |||||||||
Federated Hermes, Inc. | 40,500 | 1,373,355 | |||||||||
Greenhill & Company, Inc. | 87,725 | 1,365,001 | |||||||||
Lazard Ltd. | 36,440 | 1,648,910 | |||||||||
Victory Capital Holdings, Inc. | 42,827 | 1,382,884 | |||||||||
11,568,292 | |||||||||||
Consumer Finance — 0.70% | |||||||||||
Navient Corp. | 81,220 | 1,569,982 | |||||||||
SLM Corp. | 70,770 | 1,481,924 | |||||||||
3,051,906 | |||||||||||
Insurance — 5.41% | |||||||||||
Ambac Financial Group, Inc. (a) | 82,687 | 1,294,878 | |||||||||
American Equity Investment Life Holding Company | 40,626 | 1,313,032 |
The accompanying notes are an integral part of these financial statements.
27
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Argo Group International Holdings Ltd. | 32,900 | $ | 1,705,207 | ||||||||
Axis Capital Holdings Ltd. | 37,200 | 1,823,172 | |||||||||
Brighthouse Financial, Inc. (a) | 28,000 | 1,275,120 | |||||||||
CNO Financial Group, Inc. | 77,586 | 1,832,582 | |||||||||
Employers Holdings, Inc. | 29,435 | 1,259,818 | |||||||||
Enstar Group Ltd. (a) | 7,139 | 1,705,650 | |||||||||
Global Indemnity Group LLC | 22,548 | 594,140 | |||||||||
The Hanover Insurance Group, Inc. | 12,200 | 1,654,808 | |||||||||
Horace Mann Educators Corp. | 45,314 | 1,695,650 | |||||||||
James River Group Holdings Ltd. | 25,200 | 945,504 | |||||||||
National Western Life Group, Inc. | 6,655 | 1,493,315 | |||||||||
ProAssurance Corp. | 54,647 | 1,243,219 | |||||||||
SiriusPoint Ltd. (a) | 123,278 | 1,241,409 | |||||||||
State Auto Financial Corp. | 50,080 | 857,370 | |||||||||
Stewart Information Services Corp. | 30,801 | 1,746,109 | |||||||||
23,680,983 | |||||||||||
Mortgage Real Estate Investment Trusts — 0.99% | |||||||||||
Apollo Commercial Real Estate Finance, Inc. | 27,700 | 441,815 | |||||||||
Arlington Asset Investment Corp. (a) (l) | 94,100 | 382,046 | |||||||||
BrightSpire Capital, Inc. | 141,382 | 1,328,991 | |||||||||
Granite Point Mortgage Trust, Inc. | 30,600 | 451,350 | |||||||||
Great Ajax Corp. | 68,534 | 889,571 | |||||||||
MFA Financial, Inc. | 93,700 | 430,083 | |||||||||
TPG RE Finance Trust, Inc. | 31,000 | 416,950 | |||||||||
4,340,806 | |||||||||||
Thrifts & Mortgage Finance — 3.13% | |||||||||||
America First Multifamily Investors LP | 66,300 | 446,862 | |||||||||
Bridgewater Bancshares, Inc. (a) | 23,990 | 387,439 | |||||||||
Essent Group Ltd. | 18,700 | 840,565 | |||||||||
Federal Agricultural Mortgage Corp. | 13,220 | 1,307,458 | |||||||||
FS Bancorp, Inc. | 5,240 | 373,455 | |||||||||
HomeStreet, Inc. | 31,978 | 1,302,784 | |||||||||
Luther Burbank Corp. | 54,445 | 645,718 | |||||||||
Meridian Bancorp, Inc. | 23,970 | 490,426 | |||||||||
Northfield Bancorp, Inc. | 52,607 | 862,755 | |||||||||
Premier Financial Corp. | 30,160 | 856,846 | |||||||||
Provident Financial Services, Inc. | 55,000 | 1,258,950 | |||||||||
Radian Group, Inc. | 45,700 | 1,016,825 | |||||||||
Southern Missouri Bancorp, Inc. | 11,579 | 520,592 | |||||||||
Territorial Bancorp, Inc. | 16,052 | 416,870 | |||||||||
Trustco Bank Corp. | 36,592 | 1,258,033 | |||||||||
Washington Federal, Inc. | 53,244 | 1,692,093 | |||||||||
13,677,671 | |||||||||||
TOTAL FINANCIALS | 146,716,024 |
Shares Held | Value | ||||||||||
HEALTH CARE — 1.26% Biotechnology — 0.23% | |||||||||||
Vanda Pharmaceuticals, Inc. (a) | 47,400 | $ | 1,019,574 | ||||||||
Health Care Providers & Services — 0.63% | |||||||||||
Hanger, Inc. (a) | 69,700 | 1,762,016 | |||||||||
MEDNAX, Inc. (a) | 33,600 | 1,013,040 | |||||||||
2,775,056 | |||||||||||
Pharmaceuticals — 0.40% | |||||||||||
Taro Pharmaceutical Industries Ltd. (a) | 24,080 | 1,732,797 | |||||||||
TOTAL HEALTH CARE | 5,527,427 | ||||||||||
INDUSTRIALS — 20.41% Aerospace & Defense — 1.39% | |||||||||||
AAR Corp. (a) | 47,240 | 1,830,551 | |||||||||
Moog, Inc. | 14,600 | 1,227,276 | |||||||||
National Presto Industries, Inc. | 13,214 | 1,343,203 | |||||||||
Vectrus, Inc. (a) | 35,555 | 1,692,062 | |||||||||
6,093,092 | |||||||||||
Air Freight & Logistics — 0.22% | |||||||||||
Forward Air Corp. | 10,600 | 951,350 | |||||||||
Airlines — 0.22% | |||||||||||
Spirit Airlines, Inc. (a) | 31,200 | 949,728 | |||||||||
Building Products — 1.38% | |||||||||||
Apogee Enterprises, Inc. | 22,100 | 900,133 | |||||||||
Armstrong Flooring, Inc. (a) | 145,695 | 901,852 | |||||||||
Griffon Corp. | 16,800 | 430,584 | |||||||||
Masonite International Corp. (a) | 14,941 | 1,670,254 | |||||||||
Resideo Technologies, Inc. (a) | 58,000 | 1,740,000 | |||||||||
UFP Industries, Inc. | 5,500 | 408,870 | |||||||||
6,051,693 | |||||||||||
Commercial Services & Supplies — 2.60% | |||||||||||
ABM Industries, Inc. | 19,400 | 860,390 | |||||||||
ACCO Brands Corp. | 201,009 | 1,734,708 | |||||||||
Ennis, Inc. | 61,417 | 1,321,694 | |||||||||
Herman Miller, Inc. | 18,414 | 868,036 | |||||||||
Interface, Inc. | 127,100 | 1,944,630 | |||||||||
Kimball International, Inc. | 63,300 | 832,395 | |||||||||
Knoll, Inc. | 64,956 | 1,688,206 | |||||||||
Steelcase, Inc. | 112,515 | 1,700,102 | |||||||||
US Ecology, Inc. (a) | 11,800 | 442,736 | |||||||||
11,392,897 | |||||||||||
Construction & Engineering — 2.79% | |||||||||||
Comfort Systems USA, Inc. | 16,500 | 1,300,035 | |||||||||
Fluor Corp. (a) | 95,730 | 1,694,421 | |||||||||
Great Lakes Dredge & Dock Corp. (a) | 115,100 | 1,681,611 |
The accompanying notes are an integral part of these financial statements.
28
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Matrix Service Company (a) | 80,300 | $ | 843,150 | ||||||||
MYR Group, Inc. (a) | 11,644 | 1,058,672 | |||||||||
Primoris Services Corp. | 58,153 | 1,711,443 | |||||||||
Sterling Construction Company, Inc. (a) | 38,000 | 916,940 | |||||||||
Tutor Perini Corp. (a) | 93,221 | 1,291,111 | |||||||||
Valmont Industries, Inc. | 7,316 | 1,726,942 | |||||||||
12,224,325 | |||||||||||
Electrical Equipment — 2.69% | |||||||||||
Acuity Brands, Inc. | 5,500 | 1,028,665 | |||||||||
Atkore, Inc. (a) | 5,900 | 418,900 | |||||||||
AZZ, Inc. | 32,300 | 1,672,494 | |||||||||
Encore Wire Corp. | 22,496 | 1,704,972 | |||||||||
EnerSys | 19,010 | 1,857,847 | |||||||||
GrafTech International Ltd. | 149,680 | 1,739,282 | |||||||||
Powell Industries, Inc. | 25,500 | 789,225 | |||||||||
Preformed Line Products Company | 11,227 | 833,043 | |||||||||
Thermon Group Holdings, Inc. (a) | 100,883 | 1,719,046 | |||||||||
11,763,474 | |||||||||||
Machinery — 3.99% | |||||||||||
Blue Bird Corp. (a) | 52,040 | 1,293,714 | |||||||||
Crane Company | 11,900 | 1,099,203 | |||||||||
EnPro Industries, Inc. | 18,650 | 1,811,848 | |||||||||
Flowserve Corp. | 20,200 | 814,464 | |||||||||
Graham Corp. (l) | 30,789 | 423,657 | |||||||||
The Greenbrier Companies, Inc. | 38,499 | 1,677,786 | |||||||||
Hillenbrand, Inc. | 39,820 | 1,755,266 | |||||||||
Hyster-Yale Materials Handling, Inc. | 17,927 | 1,308,312 | |||||||||
Kennametal, Inc. | 23,600 | 847,712 | |||||||||
Meritor, Inc. (a) | 76,313 | 1,787,250 | |||||||||
Miller Industries, Inc. | 22,120 | 872,413 | |||||||||
Mueller Industries, Inc. | 18,700 | 809,897 | |||||||||
Mueller Water Products, Inc. | 60,700 | 875,294 | |||||||||
TriMas Corp. (a) | 13,500 | 409,455 | |||||||||
Wabash National Corp. | 103,782 | 1,660,512 | |||||||||
17,446,783 | |||||||||||
Marine — 0.29% | |||||||||||
Matson, Inc. | 19,913 | 1,274,432 | |||||||||
Professional Services — 2.89% | |||||||||||
BGSF, Inc. (l) | 29,660 | 366,004 | |||||||||
CBIZ, Inc. (a) | 26,700 | 874,959 | |||||||||
FTI Consulting, Inc. (a) | 5,900 | 805,999 | |||||||||
GP Strategies Corp. (a) | 36,983 | 581,373 | |||||||||
Heidrick & Struggles International, Inc. | 42,110 | 1,876,000 |
Shares Held | Value | ||||||||||
KBR, Inc. | 44,100 | $ | 1,682,415 | ||||||||
Kelly Services, Inc. (a) | 54,550 | 1,307,564 | |||||||||
Kforce, Inc. | 5,800 | 364,994 | |||||||||
Korn Ferry | 25,356 | 1,839,578 | |||||||||
Resources Connection, Inc. | 86,085 | 1,236,181 | |||||||||
TrueBlue, Inc. (a) | 60,400 | 1,697,844 | |||||||||
12,632,911 | |||||||||||
Road & Rail — 0.28% | |||||||||||
Schneider National, Inc. | 19,700 | 428,869 | |||||||||
Universal Logistics Holdings, Inc. | 34,470 | 803,151 | |||||||||
1,232,020 | |||||||||||
Trading Companies & Distributors — 1.67% | |||||||||||
Boise Cascade Company | 23,000 | 1,342,050 | |||||||||
DXP Enterprises, Inc. (a) | 53,980 | 1,797,534 | |||||||||
H&E Equipment Services, Inc. | 14,500 | 482,415 | |||||||||
Rush Enterprises, Inc. | 40,947 | 1,770,548 | |||||||||
WESCO International, Inc. (a) | 18,552 | 1,907,517 | |||||||||
7,300,064 | |||||||||||
TOTAL INDUSTRIALS | 89,312,769 | ||||||||||
INFORMATION TECHNOLOGY — 7.30% Communications Equipment — 0.63% | |||||||||||
Casa Systems, Inc. (a) | 40,500 | 359,235 | |||||||||
Comtech Telecommunications Corp. | 78,100 | 1,886,896 | |||||||||
NETGEAR, Inc. (a) | 13,600 | 521,152 | |||||||||
2,767,283 | |||||||||||
Electronic Equipment, Instruments & Components — 3.60% | |||||||||||
Avnet, Inc. | 42,800 | 1,715,424 | |||||||||
Belden, Inc. | 35,870 | 1,813,946 | |||||||||
ePlus, Inc. (a) | 9,600 | 832,224 | |||||||||
Insight Enterprises, Inc. (a) | 17,068 | 1,706,971 | |||||||||
Kimball Electronics, Inc. (a) | 37,100 | 806,554 | |||||||||
Methode Electronics, Inc. | 37,159 | 1,828,594 | |||||||||
PC Connection, Inc. | 26,806 | 1,240,314 | |||||||||
Plexus Corp. (a) | 5,700 | 521,037 | |||||||||
Sanmina Corp. (a) | 46,895 | 1,827,029 | |||||||||
ScanSource, Inc. (a) | 62,033 | 1,744,988 | |||||||||
Vishay Intertechnology, Inc. | 75,526 | 1,703,111 | |||||||||
15,740,192 | |||||||||||
IT Services — 0.87% | |||||||||||
BM Technologies, Inc. (a) | 9,824 | 122,211 | |||||||||
Cass Information Systems, Inc. | 37,400 | 1,524,050 | |||||||||
CSG Systems International, Inc. | 9,100 | 429,338 | |||||||||
Sykes Enterprises, Inc. (a) | 31,800 | 1,707,660 | |||||||||
3,783,259 |
The accompanying notes are an integral part of these financial statements.
29
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Semiconductors & Semiconductor Equipment — 1.02% | |||||||||||
Diodes, Inc. (a) | 23,249 | $ | 1,854,573 | ||||||||
NVE Corp. | 11,400 | 844,170 | |||||||||
Photronics, Inc. (a) | 132,500 | 1,750,325 | |||||||||
4,449,068 | |||||||||||
Software — 0.62% | |||||||||||
Ebix, Inc. | 28,170 | 954,963 | |||||||||
Xperi Holding Corp. | 79,300 | 1,763,632 | |||||||||
2,718,595 | |||||||||||
Technology Hardware, Storage & Peripherals — 0.56% | |||||||||||
Diebold Nixdorf, Inc. (a) | 61,200 | 785,808 | |||||||||
Super Micro Computer, Inc. (a) | 47,700 | 1,678,086 | |||||||||
2,463,894 | |||||||||||
TOTAL INFORMATION TECHNOLOGY | 31,922,291 | ||||||||||
MATERIALS — 3.82% Chemicals — 1.97% | |||||||||||
American Vanguard Corp. | 73,629 | 1,289,244 | |||||||||
Cabot Corp. | 23,170 | 1,319,068 | |||||||||
FutureFuel Corp. | 42,330 | 406,368 | |||||||||
Hawkins, Inc. | 13,100 | 429,025 | |||||||||
HB Fuller Company | 6,100 | 388,021 | |||||||||
PQ Group Holdings, Inc. | 56,600 | 869,376 | |||||||||
Tredegar Corp. | 63,430 | 873,431 | |||||||||
Trinseo SA | 29,450 | 1,762,288 | |||||||||
W R Grace & Company | 5,700 | 393,984 | |||||||||
Westlake Chemical Partners LP | 32,800 | 882,976 | |||||||||
8,613,781 | |||||||||||
Metals & Mining — 1.11% | |||||||||||
Commercial Metals Company | 27,800 | 854,016 | |||||||||
Kaiser Aluminum Corp. | 14,667 | 1,811,228 | |||||||||
Schnitzer Steel Industries, Inc. | 9,100 | 446,355 | |||||||||
Warrior Met Coal, Inc. | 49,200 | 846,240 | |||||||||
Worthington Industries, Inc. | 14,450 | 884,051 | |||||||||
4,841,890 | |||||||||||
Paper & Forest Products — 0.74% | |||||||||||
Domtar Corp. (a) | 32,180 | 1,768,612 | |||||||||
Glatfelter Corp. | 28,100 | 392,557 | |||||||||
Mercer International, Inc. | 86,250 | 1,099,688 | |||||||||
3,260,857 | |||||||||||
TOTAL MATERIALS | 16,716,528 |
Shares Held | Value | ||||||||||
REAL ESTATE — 1.33% Equity Real Estate Investment Trusts — 0.84% | |||||||||||
Alexander's, Inc. | 5,100 | $ | 1,366,545 | ||||||||
Pebblebrook Hotel Trust | 55,600 | 1,309,380 | |||||||||
Seritage Growth Properties (a) (l) | 54,648 | 1,005,523 | |||||||||
3,681,448 | |||||||||||
Real Estate Management & Development — 0.49% | |||||||||||
RE/MAX Holdings, Inc. | 12,600 | 419,958 | |||||||||
The RMR Group, Inc. | 44,200 | 1,707,888 | |||||||||
2,127,846 | |||||||||||
TOTAL REAL ESTATE | 5,809,294 | ||||||||||
UTILITIES — 4.58% Electric Utilities — 1.99% | |||||||||||
ALLETE, Inc. | 23,876 | 1,670,842 | |||||||||
Hawaiian Electric Industries, Inc. | 40,200 | 1,699,656 | |||||||||
Otter Tail Corp. | 35,740 | 1,744,469 | |||||||||
PNM Resources, Inc. | 36,002 | 1,755,818 | |||||||||
Portland General Electric Company | 39,700 | 1,829,376 | |||||||||
8,700,161 | |||||||||||
Gas Utilities — 1.79% | |||||||||||
South Jersey Industries, Inc. | 70,944 | 1,839,577 | |||||||||
Southwest Gas Holdings, Inc. | 26,400 | 1,747,416 | |||||||||
Spire, Inc. | 24,173 | 1,746,983 | |||||||||
Star Group LP | 62,460 | 699,552 | |||||||||
Suburban Propane Partners LP | 116,617 | 1,788,905 | |||||||||
7,822,433 | |||||||||||
Multi-Utilities — 0.80% | |||||||||||
Avista Corp. | 39,261 | 1,675,267 | |||||||||
NorthWestern Corp. | 30,703 | 1,848,935 | |||||||||
3,524,202 | |||||||||||
TOTAL UTILITIES | 20,046,796 | ||||||||||
Total common stocks (Cost $317,402,729) | 430,850,595 | ||||||||||
Total long-term investments (Cost $317,402,729) | 430,850,595 | ||||||||||
COLLATERAL FOR SECURITIES ON LOAN — 0.63% | |||||||||||
Money Market Funds — 0.63% | |||||||||||
Invesco Short-Term Investments Trust Government & Agency Portfolio — Institutional Class, 0.03%^ | 2,775,461 | 2,775,461 | |||||||||
Total collateral for securities on loan (Cost $2,775,461) | 2,775,461 |
The accompanying notes are an integral part of these financial statements.
30
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Small Cap Diversified Value Fund
SHORT-TERM INVESTMENTS — 3.06% | Principal Amount | Value | |||||||||
Time Deposits — 3.06% | |||||||||||
Citigroup, Inc., 0.01%, 07/01/2021* | $ | 13,407,905 | $ | 13,407,905 | |||||||
Total short-term investments (Cost $13,407,905) | 13,407,905 | ||||||||||
Total investments — 102.16% (Cost $333,586,095) | 447,033,961 | ||||||||||
Liabilities in excess of other assets — (2.16)% | (9,472,165 | ) | |||||||||
Net assets — 100.00% | $ | 437,561,796 |
(a) — Non-income producing security.
(l) — All or a portion of this security is on loan. The total market value of securities on loan was $2,699,130. The remaining contractual maturity of all of the securities lending transactions is overnight and continuous.
^ — Rate shown is the 7-day yield as of June 30, 2021.
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
31
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Global Value Fund
Largest Equity Holdings | Percent of net assets | ||||||
Wells Fargo & Company | 4.87 | % | |||||
American International Group, Inc. | 4.55 | % | |||||
General Electric Company | 4.37 | % | |||||
Anthem, Inc. | 3.99 | % | |||||
F5 Networks, Inc. | 3.48 | % | |||||
Microsoft Corp. | 3.19 | % | |||||
Credit Suisse Group AG | 2.95 | % | |||||
Royal Mail PLC | 2.91 | % | |||||
Euronet Worldwide, Inc. | 2.81 | % | |||||
BAE Systems PLC | 2.74 | % |
* Based on country of risk.
COMMON STOCKS — 97.56% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 5.85% Interactive Media & Services — 0.98% | |||||||||||
Alphabet, Inc. (a) | 150 | $ | 366,269 | ||||||||
Media — 3.20% | |||||||||||
Discovery, Inc. (a) | 25,750 | 746,235 | |||||||||
News Corp. | 17,600 | 453,552 | |||||||||
1,199,787 | |||||||||||
Wireless Telecommunication Services — 1.67% | |||||||||||
Vodafone Group PLC — ADR | 36,572 | 626,478 | |||||||||
TOTAL COMMUNICATION SERVICES | 2,192,534 | ||||||||||
CONSUMER DISCRETIONARY — 8.04% Auto Components — 1.86% | |||||||||||
Magna International, Inc. | 7,511 | 695,819 | |||||||||
Automobiles — 2.40% | |||||||||||
General Motors Company (a) | 15,245 | 902,047 | |||||||||
Hotels, Restaurants & Leisure — 3.78% | |||||||||||
Accor SA (a) (v) | 21,000 | 785,474 | |||||||||
Booking Holdings, Inc. (a) | 140 | 306,333 | |||||||||
Compass Group PLC (a) (v) | 15,400 | 324,445 | |||||||||
1,416,252 | |||||||||||
TOTAL CONSUMER DISCRETIONARY | 3,014,118 | ||||||||||
CONSUMER STAPLES — 5.16% Beverages — 2.68% | |||||||||||
Heineken Holding NV (v) | 9,987 | 1,007,774 | |||||||||
Food Products — 1.08% | |||||||||||
Gruma SAB de CV | 35,900 | 403,519 | |||||||||
Household Products — 1.40% | |||||||||||
Henkel AG & Company KGaA (v) | 5,700 | 524,907 | |||||||||
TOTAL CONSUMER STAPLES | 1,936,200 |
Shares Held | Value | ||||||||||
ENERGY — 7.06% Energy Equipment & Services — 1.15% | |||||||||||
NOV, Inc. (a) | 28,169 | $ | 431,549 | ||||||||
Oil, Gas & Consumable Fuels — 5.91% | |||||||||||
Cenovus Energy, Inc. | 27,700 | 265,023 | |||||||||
Hess Corp. | 6,400 | 558,848 | |||||||||
Royal Dutch Shell PLC — ADR | 7,100 | 286,840 | |||||||||
Suncor Energy, Inc. | 25,500 | 610,757 | |||||||||
TotalEnergies SE (v) | 10,938 | 495,510 | |||||||||
2,216,978 | |||||||||||
TOTAL ENERGY | 2,648,527 | ||||||||||
FINANCIALS — 28.23% Banks — 14.76% | |||||||||||
ABN AMRO Bank NV (a) (r) (v) | 28,600 | 346,556 | |||||||||
BNP Paribas SA (v) | 8,756 | 549,522 | |||||||||
Citigroup, Inc. | 12,904 | 912,958 | |||||||||
ING Groep NV (v) | 45,656 | 606,052 | |||||||||
Popular, Inc. | 7,200 | 540,360 | |||||||||
Societe Generale SA (v) | 13,293 | 393,225 | |||||||||
UniCredit SpA (v) | 30,500 | 360,591 | |||||||||
Wells Fargo & Company | 40,330 | 1,826,546 | |||||||||
5,535,810 | |||||||||||
Capital Markets — 5.09% | |||||||||||
Credit Suisse Group AG (v) | 105,564 | 1,105,036 | |||||||||
The Goldman Sachs Group, Inc. | 2,114 | 802,327 | |||||||||
1,907,363 | |||||||||||
Diversified Financial Services — 2.07% | |||||||||||
Berkshire Hathaway, Inc. (a) | 2,800 | 778,176 |
The accompanying notes are an integral part of these financial statements.
32
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Global Value Fund
Shares Held | Value | ||||||||||
Insurance — 6.31% | |||||||||||
American International Group, Inc. | 35,869 | $ | 1,707,364 | ||||||||
Tokio Marine Holdings, Inc. (v) | 14,300 | 658,662 | |||||||||
2,366,026 | |||||||||||
TOTAL FINANCIALS | 10,587,375 | ||||||||||
HEALTH CARE — 7.96% Health Care Equipment & Supplies — 0.92% | |||||||||||
Medtronic PLC | 2,800 | 347,564 | |||||||||
Health Care Providers & Services — 5.90% | |||||||||||
Anthem, Inc. | 3,915 | 1,494,747 | |||||||||
CVS Health Corp. | 8,600 | 717,584 | |||||||||
2,212,331 | |||||||||||
Pharmaceuticals — 1.14% | |||||||||||
GlaxoSmithKline PLC — ADR | 10,719 | 426,831 | |||||||||
TOTAL HEALTH CARE | 2,986,726 | ||||||||||
INDUSTRIALS — 18.37% Aerospace & Defense — 5.38% | |||||||||||
Airbus SE (a) (v) | 4,900 | 631,377 | |||||||||
Babcock International Group PLC (a) (v) | 89,400 | 358,816 | |||||||||
BAE Systems PLC (v) | 142,159 | 1,027,243 | |||||||||
2,017,436 | |||||||||||
Air Freight & Logistics — 2.91% | |||||||||||
Royal Mail PLC (v) | 136,487 | 1,091,327 | |||||||||
Airlines — 0.84% | |||||||||||
Qantas Airways Ltd. (a) (v) | 90,200 | 314,888 | |||||||||
Industrial Conglomerates — 4.37% | |||||||||||
General Electric Company | 121,872 | 1,640,397 | |||||||||
Machinery — 3.28% | |||||||||||
CNH Industrial NV | 46,982 | 785,539 | |||||||||
Cummins, Inc. | 1,829 | 445,929 | |||||||||
1,231,468 | |||||||||||
Road & Rail — 1.59% | |||||||||||
AMERCO | 1,012 | 596,473 | |||||||||
TOTAL INDUSTRIALS | 6,891,989 | ||||||||||
INFORMATION TECHNOLOGY — 16.37% Communications Equipment — 4.32% | |||||||||||
F5 Networks, Inc. (a) | 7,000 | 1,306,620 | |||||||||
Telefonaktiebolaget LM Ericsson — ADR | 24,872 | 312,890 | |||||||||
1,619,510 | |||||||||||
Electronic Equipment, Instruments & Components — 2.87% | |||||||||||
Corning, Inc. | 8,473 | 346,546 | |||||||||
TE Connectivity Ltd. | 5,400 | 730,134 | |||||||||
1,076,680 | |||||||||||
IT Services — 2.81% | |||||||||||
Euronet Worldwide, Inc. (a) | 7,800 | 1,055,730 |
Shares Held | Value | ||||||||||
Software — 5.26% | |||||||||||
Microsoft Corp. | 4,413 | $ | 1,195,482 | ||||||||
Oracle Corp. | 9,975 | 776,454 | |||||||||
1,971,936 | |||||||||||
Technology Hardware, Storage & Peripherals — 1.11% | |||||||||||
Hewlett Packard Enterprise Company | 28,587 | 416,798 | |||||||||
TOTAL INFORMATION TECHNOLOGY | 6,140,654 | ||||||||||
REAL ESTATE — 0.52% Equity Real Estate Investment Trusts — 0.52% | |||||||||||
Seritage Growth Properties (a) | 10,643 | 195,831 | |||||||||
TOTAL REAL ESTATE | 195,831 | ||||||||||
Total common stocks (Cost $28,545,987) | 36,593,954 | ||||||||||
CONVERTIBLE BONDS — 0.11% | Principal Amount | ||||||||||
FINANCIALS — 0.11% Capital Markets — 0.11% | |||||||||||
Credit Suisse Group Guernsey VII Ltd. 3.000%, 11/12/2021 (r) | $ | 33,000 | 40,163 | ||||||||
TOTAL FINANCIALS | 40,163 | ||||||||||
Total convertible bonds (Cost $36,854) | 40,163 | ||||||||||
Total long-term investments (Cost $28,582,841) | 36,634,117 | ||||||||||
SHORT-TERM INVESTMENTS — 1.94% | |||||||||||
Time Deposits — 1.94% | |||||||||||
Skandinaviska Enskilda Banken, 0.01%, 07/01/2021* | 728,792 | 728,792 | |||||||||
Total short-term investments (Cost $728,792) | 728,792 | ||||||||||
Total investments — 99.61% (Cost $29,311,633) | 37,362,909 | ||||||||||
Other assets in excess of liabilities — 0.39% | 146,168 | ||||||||||
Net assets — 100.00% | $ | 37,509,077 |
(a) — Non-income producing security.
(r) — Rule 144A security under the Securities Act of 1933. Purchased in a private placement transaction; resale to the public may require registration or be limited to qualified institutional buyers. The total market value of these securities was $386,719, which represented 1.03% of net assets.
(v) — Security was fair valued as a result of market movements following the close of local trading using a third-party vendor's proprietary fair value pricing model. The total market value of these securities was $10,581,405, which represented 28.21% of net assets. See Security Valuation in Note 1 in Notes to the Financial Statements.
ADR — American Depositary Receipt
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
33
Schedule of Investments — June 30, 2021
Hotchkis & Wiley International Value Fund
Largest Equity Holdings | Percent of net assets | ||||||
Royal Mail PLC | 4.58 | % | |||||
Credit Suisse Group AG | 4.12 | % | |||||
CNH Industrial NV | 3.77 | % | |||||
ING Groep NV | 3.62 | % | |||||
Heineken Holding NV | 3.39 | % | |||||
Accor SA | 3.31 | % | |||||
BAE Systems PLC | 3.13 | % | |||||
Airbus SE | 2.95 | % | |||||
BNP Paribas SA | 2.93 | % | |||||
Tokio Marine Holdings, Inc. | 2.89 | % |
* Based on country of risk.
+ Sum of countries shown is greater than 100% due to short-term securities and liabilities in excess of other assets of (0.43)%.
COMMON STOCKS — 100.24% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 3.62% Media — 1.56% | |||||||||||
RTL Group SA (v) | 670 | $ | 39,900 | ||||||||
Wireless Telecommunication Services — 2.06% | |||||||||||
Vodafone Group PLC (v) | 31,346 | 52,537 | |||||||||
TOTAL COMMUNICATION SERVICES | 92,437 | ||||||||||
CONSUMER DISCRETIONARY — 11.28% Auto Components — 2.33% | |||||||||||
Magna International, Inc. | 642 | 59,475 | |||||||||
Automobiles — 1.01% | |||||||||||
Bayerische Motoren Werke AG (v) | 286 | 25,728 | |||||||||
Hotels, Restaurants & Leisure — 5.29% | |||||||||||
Accor SA (a) (v) | 2,260 | 84,532 | |||||||||
Compass Group PLC (a) (v) | 2,400 | 50,563 | |||||||||
135,095 | |||||||||||
Internet & Catalog Retail — 2.65% | |||||||||||
Points International Ltd. (a) | 3,900 | 67,643 | |||||||||
TOTAL CONSUMER DISCRETIONARY | 287,941 | ||||||||||
CONSUMER STAPLES — 11.97% Beverages — 5.56% | |||||||||||
Britvic PLC (v) | 2,000 | 25,963 | |||||||||
Coca-Cola Europacific Partners PLC | 500 | 29,660 | |||||||||
Heineken Holding NV (v) | 857 | 86,478 | |||||||||
142,101 | |||||||||||
Food & Staples Retailing — 0.60% | |||||||||||
Tesco PLC (v) | 4,938 | 15,254 | |||||||||
Food Products — 1.54% | |||||||||||
Ezaki Glico Company Ltd. (v) | 300 | 11,180 | |||||||||
Gruma SAB de CV | 2,500 | 28,100 | |||||||||
39,280 |
Shares Held | Value | ||||||||||
Household Products — 2.63% | |||||||||||
Henkel AG & Company KGaA (v) | 730 | $ | 67,225 | ||||||||
Personal Products — 1.11% | |||||||||||
Unilever PLC (v) | 488 | 28,516 | |||||||||
Tobacco — 0.53% | |||||||||||
Scandinavian Tobacco Group A/S (r) (v) | 657 | 13,424 | |||||||||
TOTAL CONSUMER STAPLES | 305,800 | ||||||||||
ENERGY — 11.73% Energy Equipment & Services — 4.37% | |||||||||||
Frank's International NV (a) | 8,157 | 24,716 | |||||||||
Schlumberger NV | 1,400 | 44,814 | |||||||||
Subsea 7 SA (v) | 4,400 | 42,229 | |||||||||
111,759 | |||||||||||
Oil, Gas & Consumable Fuels — 7.36% | |||||||||||
Cairn Energy PLC (v) | 23,630 | 47,730 | |||||||||
Cenovus Energy, Inc. | 3,600 | 34,443 | |||||||||
Kosmos Energy Ltd. (a) | 4,968 | 17,189 | |||||||||
Royal Dutch Shell PLC (v) | 1,327 | 26,813 | |||||||||
Suncor Energy, Inc. | 1,300 | 31,137 | |||||||||
TotalEnergies SE (v) | 675 | 30,579 | |||||||||
187,891 | |||||||||||
TOTAL ENERGY | 299,650 | ||||||||||
FINANCIALS — 30.71% Banks — 17.09% | |||||||||||
ABN AMRO Bank NV (a) (r) (v) | 3,100 | 37,564 | |||||||||
AIB Group PLC (a) (v) | 11,000 | 28,387 | |||||||||
Bank of Ireland Group PLC (a) (v) | 4,400 | 23,611 | |||||||||
Barclays PLC (v) | 17,117 | 40,620 | |||||||||
BNP Paribas SA (v) | 1,194 | 74,934 | |||||||||
ING Groep NV (v) | 6,967 | 92,481 |
The accompanying notes are an integral part of these financial statements.
34
Schedule of Investments — June 30, 2021
Hotchkis & Wiley International Value Fund
Shares Held | Value | ||||||||||
Natwest Group PLC (v) | 9,300 | $ | 26,173 | ||||||||
Societe Generale SA (v) | 1,931 | 57,122 | |||||||||
UniCredit SpA (v) | 4,700 | 55,567 | |||||||||
436,459 | |||||||||||
Capital Markets — 5.64% | |||||||||||
Credit Suisse Group AG (v) | 10,048 | $ | 105,182 | ||||||||
Rothschild & Company | 1,000 | 38,833 | |||||||||
144,015 | |||||||||||
Insurance — 7.98% | |||||||||||
Enstar Group Ltd. (a) | 299 | 71,437 | |||||||||
Global Indemnity Group LLC | 918 | 24,189 | |||||||||
Tokio Marine Holdings, Inc. (v) | 1,600 | 73,696 | |||||||||
Zurich Insurance Group AG (v) | 86 | 34,543 | |||||||||
203,865 | |||||||||||
TOTAL FINANCIALS | 784,339 | ||||||||||
HEALTH CARE — 5.19% Health Care Equipment & Supplies — 3.68% | |||||||||||
Koninklijke Philips NV (v) | 667 | 33,106 | |||||||||
Medtronic PLC | 490 | 60,824 | |||||||||
93,930 | |||||||||||
Pharmaceuticals — 1.51% | |||||||||||
GlaxoSmithKline PLC (v) | 1,309 | 25,734 | |||||||||
Sanofi (v) | 123 | 12,923 | |||||||||
38,657 | |||||||||||
TOTAL HEALTH CARE | 132,587 | ||||||||||
INDUSTRIALS — 19.54% Aerospace & Defense — 7.74% | |||||||||||
Airbus SE (a) (v) | 585 | 75,379 | |||||||||
Babcock International Group PLC (a) (v) | 10,500 | 42,143 | |||||||||
BAE Systems PLC (v) | 11,075 | 80,028 | |||||||||
197,550 | |||||||||||
Air Freight & Logistics — 4.58% | |||||||||||
Royal Mail PLC (v) | 14,629 | 116,971 | |||||||||
Airlines — 1.94% | |||||||||||
Qantas Airways Ltd. (a) (v) | 14,200 | 49,572 | |||||||||
Industrial Conglomerates — 1.24% | |||||||||||
Siemens AG (v) | 200 | 31,756 | |||||||||
Machinery — 3.77% | |||||||||||
CNH Industrial NV | 5,753 | 96,190 | |||||||||
Professional Services — 0.27% | |||||||||||
Hudson Global, Inc. (a) | 399 | 6,994 | |||||||||
TOTAL INDUSTRIALS | 499,033 | ||||||||||
INFORMATION TECHNOLOGY — 6.20% Communications Equipment — 2.04% | |||||||||||
Telefonaktiebolaget LM Ericsson (v) | 4,144 | 52,106 |
Shares Held | Value | ||||||||||
Electronic Equipment, Instruments & Components — 3.08% | |||||||||||
Landis+Gyr Group AG (a) (v) | 360 | $ | 25,143 | ||||||||
TE Connectivity Ltd. | 395 | 53,408 | |||||||||
78,551 | |||||||||||
Semiconductors & Semiconductor Equipment — 1.08% | |||||||||||
Taiwan Semiconductor Manufacturing Company Ltd. — ADR | 230 | 27,637 | |||||||||
TOTAL INFORMATION TECHNOLOGY | 158,294 | ||||||||||
Total common stocks (Cost $2,070,796) | 2,560,081 | ||||||||||
CONVERTIBLE BONDS — 0.19% | Principal Amount | ||||||||||
FINANCIALS — 0.19% Capital Markets — 0.19% | |||||||||||
Credit Suisse Group Guernsey VII Ltd. 3.000%, 11/12/2021 (r) | $ | 4,000 | 4,868 | ||||||||
TOTAL FINANCIALS | 4,868 | ||||||||||
Total convertible bonds (Cost $4,467) | 4,868 | ||||||||||
Total long-term investments (Cost $2,075,263) | 2,564,949 | ||||||||||
SHORT-TERM INVESTMENTS — 0.43% | |||||||||||
Time Deposits — 0.43% | |||||||||||
Banco Bilbao Vizcaya Argentaria SA, 0.01%, 07/01/2021* | 10,911 | 10,911 | |||||||||
Total short-term investments (Cost $10,911) | 10,911 | ||||||||||
Total investments — 100.86% (Cost $2,086,174) | 2,575,860 | ||||||||||
Liabilities in excess of other assets — (0.86)% | (21,847 | ) | |||||||||
Net assets — 100.00% | $ | 2,554,013 |
(a) — Non-income producing security.
(r) — Rule 144A security under the Securities Act of 1933. Purchased in a private placement transaction; resale to the public may require registration or be limited to qualified institutional buyers. The total market value of these securities was $55,856, which represented 2.19% of net assets.
(v) — Security was fair valued as a result of market movements following the close of local trading using a third-party vendor's proprietary fair value pricing model. The total market value of these securities was $1,843,392, which represented 72.18% of net assets. See Security Valuation in Note 1 in Notes to the Financial Statements.
ADR — American Depositary Receipt
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
35
Schedule of Investments — June 30, 2021
Hotchkis & Wiley International Small Cap Diversified Value Fund
Largest Equity Holdings | Percent of net assets | ||||||
Mazda Motor Corp. | 0.64 | % | |||||
Birchcliff Energy Ltd. | 0.62 | % | |||||
TechnipFMC PLC | 0.58 | % | |||||
Aumann AG | 0.58 | % | |||||
Baader Bank AG | 0.58 | % | |||||
Kosmos Energy Ltd. | 0.58 | % | |||||
Banca IFIS SpA | 0.57 | % | |||||
IOOF Holdings Ltd. | 0.57 | % | |||||
Vermilion Energy, Inc. | 0.57 | % | |||||
TS Tech Company Ltd. | 0.56 | % |
* Based on country of risk.
COMMON STOCKS — 99.35% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 2.33% Diversified Telecommunication Services — 0.48% | |||||||||||
O2 Czech Republic AS | 2,600 | $ | 31,916 | ||||||||
Entertainment — 0.40% | |||||||||||
Akatsuki, Inc. (v) | 400 | 12,801 | |||||||||
GungHo Online Entertainment, Inc. (v) | 700 | 13,902 | |||||||||
26,703 | |||||||||||
Media — 1.45% | |||||||||||
APG SGA SA (a) | 140 | 34,347 | |||||||||
Atresmedia Corp. de Medios de Comunicacion SA (a) (v) | 2,700 | 11,834 | |||||||||
Mediaset Espana Comunicacion SA (a) (v) | 3,100 | 19,409 | |||||||||
Metropole Television SA (v) | 900 | 18,923 | |||||||||
TX Group AG (a) (v) | 130 | 12,072 | |||||||||
96,585 | |||||||||||
TOTAL COMMUNICATION SERVICES | 155,204 | ||||||||||
CONSUMER DISCRETIONARY — 11.09% Auto Components — 2.07% | |||||||||||
Cie Plastic Omnium SA (v) | 600 | 18,763 | |||||||||
FCC Company Ltd. (v) | 1,400 | 20,388 | |||||||||
NHK Spring Company Ltd. (v) | 2,600 | 21,402 | |||||||||
Nokian Renkaat Oyj (v) | 400 | 16,160 | |||||||||
Toyota Boshoku Corp. (v) | 1,200 | 24,908 | |||||||||
TS Tech Company Ltd. (v) | 2,400 | 37,160 | |||||||||
138,781 | |||||||||||
Automobiles — 1.06% | |||||||||||
Mazda Motor Corp. (a) (v) | 4,500 | 42,455 | |||||||||
Mitsubishi Motors Corp. (a) (v) | 4,900 | 13,801 | |||||||||
Trigano SA (v) | 70 | 14,474 | |||||||||
70,730 |
Shares Held | Value | ||||||||||
Distributors — 0.48% | |||||||||||
Inchcape PLC (v) | 3,000 | $ | 31,928 | ||||||||
Diversified Consumer Services — 0.54% | |||||||||||
Anexo Group PLC | 18,000 | 35,980 | |||||||||
Hotels, Restaurants & Leisure — 0.47% | |||||||||||
Dalata Hotel Group PLC (a) (v) | 6,800 | 30,989 | |||||||||
Household Durables — 2.08% | |||||||||||
Crest Nicholson Holdings PLC (a) (v) | 2,300 | 13,364 | |||||||||
Henry Boot PLC | 3,500 | 12,491 | |||||||||
Portmeirion Group PLC (a) | 1,500 | 14,525 | |||||||||
Redrow PLC (v) | 3,700 | 31,386 | |||||||||
Tachikawa Corp. (v) | 2,800 | 33,364 | |||||||||
Tamron Company Ltd. (v) | 1,500 | 32,919 | |||||||||
138,049 | |||||||||||
Internet & Catalog Retail — 0.20% | |||||||||||
Takkt AG (v) | 800 | 13,302 | |||||||||
Leisure Products — 0.72% | |||||||||||
Furyu Corp. (v) | 2,200 | 27,855 | |||||||||
Photo-Me International PLC (a) | 20,500 | 20,162 | |||||||||
48,017 | |||||||||||
Specialty Retail — 2.37% | |||||||||||
Adastria Company Ltd. (v) | 1,900 | 34,806 | |||||||||
AOKI Holdings, Inc. (v) | 5,800 | 34,788 | |||||||||
Clas Ohlson AB (v) | 1,900 | 19,595 | |||||||||
Hornbach Baumarkt AG | 300 | 13,180 | |||||||||
Mobilezone Holding AG (v) | 1,600 | 18,829 | |||||||||
Premier Investments Ltd. (v) | 700 | 14,989 | |||||||||
Super Retail Group Ltd. (v) | 2,200 | 21,273 | |||||||||
157,460 |
The accompanying notes are an integral part of these financial statements.
36
Schedule of Investments — June 30, 2021
Hotchkis & Wiley International Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Textiles, Apparel & Luxury Goods — 1.10% | |||||||||||
Chargeurs SA (v) | 700 | $ | 19,455 | ||||||||
Hagihara Industries, Inc. (v) | 1,500 | 19,181 | |||||||||
HUGO BOSS AG (v) | 400 | 21,787 | |||||||||
The Japan Wool Textile Company Ltd. (v) | 1,500 | 13,074 | |||||||||
73,497 | |||||||||||
TOTAL CONSUMER DISCRETIONARY | 738,733 | ||||||||||
CONSUMER STAPLES — 6.10% Beverages — 0.75% | |||||||||||
Corby Spirit and Wine Ltd. | 1,300 | 18,898 | |||||||||
Stock Spirits Group PLC (v) | 8,700 | 31,486 | |||||||||
50,384 | |||||||||||
Food & Staples Retailing — 1.22% | |||||||||||
Amsterdam Commodities NV | 500 | 13,577 | |||||||||
Arcs Company Ltd. (v) | 900 | 19,591 | |||||||||
Kato Sangyo Company Ltd. (v) | 1,100 | 33,547 | |||||||||
Metcash Ltd. (v) | 4,800 | 14,394 | |||||||||
81,109 | |||||||||||
Food Products — 3.31% | |||||||||||
Austevoll Seafood ASA (v) | 1,500 | 18,618 | |||||||||
Ebara Foods Industry, Inc. (v) | 1,400 | 32,857 | |||||||||
Ezaki Glico Company Ltd. (v) | 400 | 14,907 | |||||||||
Greencore Group PLC (a) (v) | 7,700 | 13,386 | |||||||||
Itoham Yonekyu Holdings, Inc. (v) | 2,200 | 14,169 | |||||||||
Neto ME Holdings Ltd. (v) | 300 | 14,078 | |||||||||
Nippn Corp. (v) | 1,100 | 15,531 | |||||||||
Nitto Fuji Flour Milling Company Ltd. (v) | 300 | 19,098 | |||||||||
Savencia SA | 150 | 12,593 | |||||||||
Tassal Group Ltd. (v) | 12,400 | 33,274 | |||||||||
Tate & Lyle PLC (v) | 1,200 | 12,273 | |||||||||
Wynnstay Group PLC | 2,900 | 19,637 | |||||||||
220,421 | |||||||||||
Personal Products — 0.27% | |||||||||||
HABA Laboratories, Inc. (v) | 500 | 17,986 | |||||||||
Tobacco — 0.55% | |||||||||||
Scandinavian Tobacco Group A/S (r) (v) | 1,800 | 36,777 | |||||||||
TOTAL CONSUMER STAPLES | 406,677 | ||||||||||
ENERGY — 5.74% Energy Equipment & Services — 2.06% | |||||||||||
Frank's International NV (a) | 9,500 | 28,785 | |||||||||
Subsea 7 SA (v) | 3,200 | 30,712 | |||||||||
Technip Energies NV (a) | 1,360 | 18,642 | |||||||||
TechnipFMC PLC (a) (v) | 4,300 | 38,830 | |||||||||
TerraVest Industries, Inc. | 1,300 | 20,366 | |||||||||
137,335 |
Shares Held | Value | ||||||||||
Oil, Gas & Consumable Fuels — 3.68% | |||||||||||
Birchcliff Energy Ltd. | 9,800 | $ | 41,110 | ||||||||
Cairn Energy PLC (v) | 13,961 | 28,200 | |||||||||
Cardinal Energy Ltd. (a) (m) | 8,100 | 22,805 | |||||||||
Crescent Point Energy Corp. | 8,100 | 36,658 | |||||||||
Kosmos Energy Ltd. (a) | 11,100 | 38,406 | |||||||||
Pantheon Resources PLC (a) (v) | 48,600 | 27,793 | |||||||||
Pilipinas Shell Petroleum Corp. (a) | 29,700 | 12,168 | |||||||||
Vermilion Energy, Inc. (a) | 4,300 | 37,672 | |||||||||
244,812 | |||||||||||
TOTAL ENERGY | 382,147 | ||||||||||
FINANCIALS — 25.31% Banks — 9.90% | |||||||||||
The Aichi Bank Ltd. (v) | 500 | 12,467 | |||||||||
Banca Popolare di Sondrio SCPA (v) | 4,700 | 20,419 | |||||||||
Banco de Sabadell SA (a) (v) | 49,600 | 33,862 | |||||||||
Bank Danamon Indonesia Tbk PT (v) | 81,100 | 11,419 | |||||||||
Bank Millennium SA (a) | 30,000 | 36,664 | |||||||||
Caisse Regionale de Credit Agricole Mutuel Brie Picardie (v) | 1,200 | 31,726 | |||||||||
Caisse Regionale de Credit Agricole Mutuel de Normandie-Seine | 220 | 28,565 | |||||||||
Caisse Regionale de Credit Agricole Mutuel de Paris et d'Ile-de-France (v) | 360 | 31,209 | |||||||||
Caisse Regionale de Credit Agricole Mutuel d'Ille-et-Vilaine (v) | 190 | 17,801 | |||||||||
Caisse Regionale de Credit Agricole Mutuel Nord de France | 700 | 17,186 | |||||||||
Caisse Regionale de Credit Agricole Mutuel Toulouse 31 | 230 | 27,242 | |||||||||
Canadian Western Bank | 700 | 19,652 | |||||||||
Collector AB (a) (v) | 8,700 | 37,110 | |||||||||
Dah Sing Financial Holdings Ltd. (v) | 10,400 | 35,527 | |||||||||
The Hachijuni Bank Ltd. (v) | 5,800 | 18,749 | |||||||||
The Iyo Bank Ltd. (v) | 4,200 | 20,697 | |||||||||
Jutlander Bank A/S | 400 | 21,686 | |||||||||
The Keiyo Bank Ltd. (v) | 5,200 | 19,075 | |||||||||
Komplett Bank ASA | 18,400 | 18,742 | |||||||||
The Musashino Bank Ltd. (v) | 800 | 12,033 | |||||||||
Norwegian Finans Holding ASA (v) | 1,100 | 12,391 | |||||||||
Pareto Bank ASA | 3,300 | 19,930 | |||||||||
The Shikoku Bank Ltd. (v) | 2,100 | 13,186 | |||||||||
Sparebank 1 Oestlandet | 1,400 | 19,349 | |||||||||
Sparebanken Vest (v) | 1,900 | 19,761 | |||||||||
Sparekassen Sjaelland-Fyn A/S (a) | 1,000 | 24,078 | |||||||||
Suruga Bank Ltd. (v) | 10,800 | 32,382 | |||||||||
The Tochigi Bank Ltd. (v) | 8,800 | 13,577 |
The accompanying notes are an integral part of these financial statements.
37
Schedule of Investments — June 30, 2021
Hotchkis & Wiley International Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
TOMONY Holdings, Inc. (v) | 4,900 | $ | 12,964 | ||||||||
Unicaja Banco SA (r) (v) | 19,600 | 20,113 | |||||||||
659,562 | |||||||||||
Capital Markets — 6.97% | |||||||||||
ABG Sundal Collier Holding ASA | 19,500 | 22,285 | |||||||||
AGF Management Ltd. | 5,200 | 33,308 | |||||||||
Atreyu Capital Markets Ltd. (v) | 1,300 | 20,630 | |||||||||
Baader Bank AG (a) (v) | 3,500 | 38,465 | |||||||||
Flow Traders (r) | 500 | 21,510 | |||||||||
GAM Holding AG (a) (v) | 14,100 | 30,649 | |||||||||
IOOF Holdings Ltd. (v) | 11,800 | 37,737 | |||||||||
Jupiter Fund Management PLC (v) | 3,700 | 14,440 | |||||||||
Man Group PLC (v) | 5,600 | 13,930 | |||||||||
Manolete Partners PLC | 9,500 | 29,897 | |||||||||
Meitav Dash Investments Ltd. (v) | 2,300 | 12,631 | |||||||||
Navigator Global Investments Ltd. (v) | 27,700 | 37,007 | |||||||||
Numis Corp. PLC | 6,200 | �� | 30,446 | ||||||||
Rothschild & Company | 900 | 34,950 | |||||||||
Sawada Holdings Company Ltd. (v) | 3,600 | 32,365 | |||||||||
Toyo Securities Company Ltd. (v) | 23,200 | 33,604 | |||||||||
Value Partners Group Ltd. (v) | 32,000 | 20,407 | |||||||||
464,261 | |||||||||||
Consumer Finance — 1.87% | |||||||||||
AEON Financial Service Company Ltd. (v) | 2,900 | 34,225 | |||||||||
Hoist Finance AB (a) (r) (v) | 8,700 | 35,369 | |||||||||
Nawi Brothers Ltd. (v) | 4,700 | 35,858 | |||||||||
Resurs Holding AB (r) (v) | 3,800 | 18,775 | |||||||||
124,227 | |||||||||||
Diversified Financial Services — 2.56% | |||||||||||
Banca IFIS SpA (v) | 2,400 | 38,177 | |||||||||
Burford Capital Ltd. (v) | 3,100 | 31,933 | |||||||||
Challenger Ltd. (v) | 3,400 | 13,775 | |||||||||
Financial Products Group Company Ltd. (v) | 5,000 | 33,353 | |||||||||
GRENKE AG | 500 | 21,936 | |||||||||
Plus500 Ltd. (v) | 1,700 | 31,424 | |||||||||
170,598 | |||||||||||
Insurance — 3.82% | |||||||||||
AUB Group Ltd. (v) | 1,200 | 20,121 | |||||||||
Beazley PLC (a) (v) | 7,400 | 34,065 | |||||||||
Clal Insurance Enterprises Holdings Ltd. (a) (v) | 1,100 | 21,848 | |||||||||
Coface SA (v) | 1,600 | 19,418 | |||||||||
Grupo Catalana Occidente SA | 300 | 11,579 | |||||||||
Hiscox Ltd. (a) (v) | 2,900 | 33,403 | |||||||||
Lancashire Holdings Ltd. (v) | 3,800 | 32,239 |
Shares Held | Value | ||||||||||
Unipol Gruppo SpA (v) | 5,100 | $ | 27,811 | ||||||||
UNIQA Insurance Group AG (v) | 2,400 | 20,900 | |||||||||
Vienna Insurance Group AG Wiener Versicherung Gruppe | 1,200 | 32,940 | |||||||||
254,324 | |||||||||||
Thrifts & Mortgage Finance — 0.19% | |||||||||||
Asax Company Ltd. (v) | 2,100 | 12,837 | |||||||||
TOTAL FINANCIALS | 1,685,809 | ||||||||||
HEALTH CARE — 3.26% Health Care Equipment & Supplies — 0.61% | |||||||||||
Draegerwerk AG & Company KGaA (v) | 230 | 21,394 | |||||||||
Paramount Bed Holdings Company Ltd. (v) | 1,100 | 19,585 | |||||||||
40,979 | |||||||||||
Health Care Providers & Services — 2.07% | |||||||||||
Estia Health Ltd. (a) (v) | 18,300 | 33,864 | |||||||||
FALCO HOLDINGS Company Ltd. (v) | 1,300 | 19,540 | |||||||||
Regis Healthcare Ltd. (v) | 13,600 | 19,901 | |||||||||
Ship Healthcare Holdings, Inc. (v) | 600 | 14,019 | |||||||||
Toho Holdings Company Ltd. (v) | 2,200 | 35,472 | |||||||||
Virtus Health Ltd. (v) | 3,000 | 14,852 | |||||||||
137,648 | |||||||||||
Health Care Technology — 0.30% | |||||||||||
GPI SpA (a) (v) | 1,200 | 19,736 | |||||||||
Pharmaceuticals — 0.28% | |||||||||||
Tsumura & Company (v) | 600 | 18,860 | |||||||||
TOTAL HEALTH CARE | 217,223 | ||||||||||
INDUSTRIALS — 23.23% Aerospace & Defense — 3.32% | |||||||||||
Austal Ltd. (v) | 21,100 | 32,432 | |||||||||
Avio SpA (v) | 2,100 | 31,011 | |||||||||
Babcock International Group PLC (a) (v) | 8,200 | 32,911 | |||||||||
Meggitt PLC (a) (v) | 3,100 | 19,803 | |||||||||
QinetiQ Group PLC (v) | 4,300 | 20,468 | |||||||||
Saab AB (v) | 1,200 | 31,858 | |||||||||
Senior PLC (a) (v) | 14,400 | 30,153 | |||||||||
Ultra Electronics Holdings PLC (v) | 700 | 22,186 | |||||||||
220,822 | |||||||||||
Air Freight & Logistics — 1.25% | |||||||||||
bpost SA (a) (v) | 1,800 | 21,596 | |||||||||
Oesterreichische Post AG (v) | 400 | 21,294 | |||||||||
PostNL NV (v) | 3,700 | 20,103 | |||||||||
Wincanton PLC | 3,300 | 20,085 | |||||||||
83,078 |
The accompanying notes are an integral part of these financial statements.
38
Schedule of Investments — June 30, 2021
Hotchkis & Wiley International Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Building Products — 1.29% | |||||||||||
Centrotec SE | 1,000 | $ | 25,256 | ||||||||
Inrom Construction Industries Ltd. (v) | 2,400 | 11,046 | |||||||||
Nichiha Corp. (v) | 500 | 12,730 | |||||||||
Norcros PLC | 4,800 | 21,845 | |||||||||
Takasago Thermal Engineering Company Ltd. (v) | 900 | 15,019 | |||||||||
85,896 | |||||||||||
Commercial Services & Supplies — 2.16% | |||||||||||
Aggreko PLC (v) | 1,600 | 19,096 | |||||||||
Daiseki Company Ltd. (v) | 400 | 17,968 | |||||||||
Downer EDI Ltd. (v) | 3,100 | 12,987 | |||||||||
ISS A/S (a) (v) | 700 | 16,472 | |||||||||
Loomis AB (v) | 1,000 | 31,284 | |||||||||
Okamura Corp. (v) | 1,300 | 17,620 | |||||||||
Pilot Corp. (v) | 400 | 13,574 | |||||||||
Societe BIC SA (v) | 210 | 14,605 | |||||||||
143,606 | |||||||||||
Construction & Engineering — 3.09% | |||||||||||
Balfour Beatty PLC (v) | 3,000 | 12,751 | |||||||||
Grupo Empresarial San Jose SA (v) | 1,800 | 11,126 | |||||||||
Hazama Ando Corp. (v) | 1,900 | 13,987 | |||||||||
Implenia AG (a) | 700 | 18,218 | |||||||||
Keller Group PLC | 1,100 | 12,203 | |||||||||
Kumagai Gumi Company Ltd. (v) | 500 | 12,619 | |||||||||
Maire Tecnimont SpA (v) | 6,100 | 22,330 | |||||||||
Monadelphous Group Ltd. (v) | 1,800 | 14,102 | |||||||||
Morgan Sindall Group PLC | 400 | 11,924 | |||||||||
Per Aarsleff Holding A/S (v) | 300 | 13,519 | |||||||||
Severfield PLC | 12,100 | 13,391 | |||||||||
Strabag SE (v) | 300 | 12,866 | |||||||||
Sumitomo Mitsui Construction Company Ltd. (v) | 2,800 | 11,902 | |||||||||
Taikisha Ltd. (v) | 400 | 11,937 | |||||||||
Tobishima Corp. (v) | 1,400 | 13,268 | |||||||||
206,143 | |||||||||||
Industrial Conglomerates — 1.25% | |||||||||||
Indus Holding AG (v) | 500 | 19,803 | |||||||||
MBB SE (v) | 210 | 32,816 | |||||||||
Rheinmetall AG (v) | 310 | 30,632 | |||||||||
83,251 | |||||||||||
Machinery — 7.63% | |||||||||||
ANDRITZ AG (v) | 400 | 22,497 | |||||||||
Aumann AG (a) (r) (v) | 1,900 | 38,669 | |||||||||
Bucher Industries AG (v) | 40 | 20,946 | |||||||||
Danieli & C Officine Meccaniche SpA | 2,000 | 34,482 |
Shares Held | Value | ||||||||||
Duerr AG (v) | 900 | $ | 34,230 | ||||||||
Ebara Corp. (v) | 300 | 14,777 | |||||||||
Frencken Group Ltd. (v) | 11,300 | 15,747 | |||||||||
Fu Yu Corp. Ltd. | 55,600 | 12,818 | |||||||||
Glory Ltd. (v) | 900 | 18,692 | |||||||||
The Japan Steel Works Ltd. (v) | 500 | 12,837 | |||||||||
Manitou BF SA | 600 | 19,209 | |||||||||
Meidensha Corp. (v) | 600 | 11,925 | |||||||||
Morgan Advanced Materials PLC (v) | 4,800 | 23,458 | |||||||||
Nitta Corp. (v) | 800 | 18,696 | |||||||||
Noritake Company Ltd. (v) | 600 | 22,793 | |||||||||
OKUMA Corp. (v) | 300 | 14,698 | |||||||||
OSG Corp. (v) | 800 | 13,886 | |||||||||
Ponsse Oyj (v) | 300 | 15,090 | |||||||||
Shibuya Corp. (v) | 700 | 19,603 | |||||||||
Shinmaywa Industries Ltd. (v) | 1,400 | 12,095 | |||||||||
Sulzer AG (v) | 170 | 23,523 | |||||||||
Takeuchi Manufacturing Company Ltd. (v) | 800 | 19,930 | |||||||||
Talgo SA (a) (r) (v) | 2,600 | 14,718 | |||||||||
Tsubakimoto Chain Company (v) | 700 | 19,988 | |||||||||
Tsukishima Kikai Company Ltd. (v) | 1,800 | 18,756 | |||||||||
Wacker Neuson SE (v) | 500 | 14,398 | |||||||||
508,461 | |||||||||||
Professional Services — 1.89% | |||||||||||
Assystem SA | 400 | 14,822 | |||||||||
Bertrandt AG (v) | 500 | 33,452 | |||||||||
Gateley Holdings PLC | 5,100 | 15,097 | |||||||||
Impellam Group PLC (a) (v) | 3,300 | 12,779 | |||||||||
McMillan Shakespeare Ltd. (v) | 2,300 | 22,306 | |||||||||
Persol Holdings Company Ltd. (v) | 600 | 11,848 | |||||||||
SThree PLC (v) | 2,400 | 15,340 | |||||||||
125,644 | |||||||||||
Road & Rail — 0.39% | |||||||||||
Nikkon Holdings Company Ltd. (v) | 600 | 13,087 | |||||||||
Sankyu, Inc. (v) | 300 | 13,037 | |||||||||
26,124 | |||||||||||
Trading Companies & Distributors — 0.96% | |||||||||||
Ferronordic AB | 1,400 | 36,889 | |||||||||
Kanamoto Company Ltd. (v) | 600 | 13,858 | |||||||||
Kanematsu Corp. (v) | 1,000 | 13,317 | |||||||||
64,064 | |||||||||||
TOTAL INDUSTRIALS | 1,547,089 | ||||||||||
INFORMATION TECHNOLOGY — 5.90% Communications Equipment — 0.46% | |||||||||||
Evertz Technologies Ltd. | 2,600 | 30,182 |
The accompanying notes are an integral part of these financial statements.
39
Schedule of Investments — June 30, 2021
Hotchkis & Wiley International Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Electronic Equipment, Instruments & Components — 3.32% | |||||||||||
Alps Alpine Company Ltd. (v) | 3,200 | $ | 33,866 | ||||||||
Celestica, Inc. (a) | 4,200 | 32,933 | |||||||||
Daitron Company Ltd. (v) | 1,900 | 34,253 | |||||||||
Esprinet SpA (v) | 800 | 14,061 | |||||||||
Horiba Ltd. (v) | 200 | 12,980 | |||||||||
Japan Aviation Electronics Industry Ltd. (v) | 2,000 | 35,320 | |||||||||
Kaga Electronics Company Ltd. (v) | 900 | 24,107 | |||||||||
V Technology Company Ltd. (v) | 700 | 33,588 | |||||||||
221,108 | |||||||||||
IT Services — 1.23% | |||||||||||
CSE Global Ltd. (v) | 46,500 | 18,364 | |||||||||
DTS Corp. (v) | 500 | 11,925 | |||||||||
Global Dominion Access SA (a) (r) | 2,700 | 13,991 | |||||||||
KNOW IT AB | 600 | 19,666 | |||||||||
Sword Group (v) | 400 | 18,130 | |||||||||
82,076 | |||||||||||
Semiconductors & Semiconductor Equipment — 0.21% | |||||||||||
UMS Holdings Ltd. (v) | 12,500 | 14,173 | |||||||||
Software — 0.68% | |||||||||||
Silverlake Axis Ltd. (v) | 178,800 | 31,341 | |||||||||
System Research Company Ltd. (v) | 700 | 14,133 | |||||||||
45,474 | |||||||||||
TOTAL INFORMATION TECHNOLOGY | 393,013 | ||||||||||
MATERIALS — 10.91% Chemicals — 3.08% | |||||||||||
ASAHI YUKIZAI Corp. (v) | 1,100 | 13,253 | |||||||||
Dai Nippon Toryo Company Ltd. (v) | 4,200 | 31,847 | |||||||||
Kanto Denka Kogyo Company Ltd. (v) | 4,000 | 35,717 | |||||||||
Nihon Parkerizing Company Ltd. (v) | 1,200 | 12,022 | |||||||||
Sumitomo Seika Chemicals Company Ltd. (v) | 1,100 | 35,619 | |||||||||
Toagosei Company Ltd. (v) | 2,000 | 20,338 | |||||||||
Tokuyama Corp. (v) | 1,700 | 34,632 | |||||||||
Yushiro Chemical Industry Company Ltd. (v) | 2,000 | 21,587 | |||||||||
205,015 | |||||||||||
Construction Materials — 2.36% | |||||||||||
Buzzi Unicem SpA (v) | 700 | 18,596 | |||||||||
Cementir Holding NV (v) | 3,100 | 31,644 | |||||||||
CSR Ltd. (v) | 4,300 | 18,585 | |||||||||
Forterra PLC (r) | 8,900 | 33,241 | |||||||||
H+H International A/S (a) (v) | 700 | 21,473 | |||||||||
Vicat SA (v) | 700 | 33,855 | |||||||||
157,394 |
Shares Held | Value | ||||||||||
Containers & Packaging — 1.08% | |||||||||||
Fuji Seal International, Inc. (v) | 600 | $ | 12,599 | ||||||||
Mayr Melnhof Karton AG | 90 | 19,166 | |||||||||
Takemoto Yohki Company Ltd. (v) | 2,300 | 21,552 | |||||||||
Winpak Ltd. | 600 | 18,717 | |||||||||
72,034 | |||||||||||
Metals & Mining — 2.78% | |||||||||||
Anglo Pacific Group PLC (v) | 10,200 | 19,624 | |||||||||
Dowa Holdings Company Ltd. (v) | 300 | 11,842 | |||||||||
MACA Ltd. (v) | 34,200 | 19,340 | |||||||||
Macmahon Holdings Ltd. (v) | 98,200 | 13,983 | |||||||||
Mount Gibson Iron Ltd. (v) | 47,200 | 33,425 | |||||||||
OceanaGold Corp. (a) (m) | 11,400 | 21,612 | |||||||||
Regis Resources Ltd. (v) | 18,000 | 31,867 | |||||||||
Sandfire Resources Ltd. (v) | 3,800 | 19,399 | |||||||||
Tokyo Steel Manufacturing Company Ltd. (v) | 1,400 | 13,979 | |||||||||
185,071 | |||||||||||
Paper & Forest Products — 1.61% | |||||||||||
Altri SGPS SA (v) | 2,000 | 12,437 | |||||||||
Iberpapel Gestion SA (v) | 1,500 | 31,823 | |||||||||
Miquel y Costas & Miquel SA | 1,100 | 21,339 | |||||||||
The Navigator Company SA (v) | 5,800 | 19,865 | |||||||||
Stella-Jones, Inc. | 600 | 21,602 | |||||||||
107,066 | |||||||||||
TOTAL MATERIALS | 726,580 | ||||||||||
REAL ESTATE — 2.93% Equity Real Estate Investment Trusts — 1.14% | |||||||||||
First Real Estate Investment Trust | 50,600 | 9,972 | |||||||||
Impact Healthcare Reit PLC (v) | 21,200 | 32,572 | |||||||||
SmartCentres Real Estate Investment Trust | 1,400 | 33,170 | |||||||||
75,714 | |||||||||||
Real Estate Management & Development — 1.79% | |||||||||||
Airport City Ltd. (a) (v) | 1,900 | 31,857 | |||||||||
Great Eagle Holdings Ltd. (v) | 10,000 | 33,961 | |||||||||
Nisshin Group Holdings Company Ltd. (v) | 8,200 | 34,075 | |||||||||
Shinoken Group Company Ltd. (v) | 1,800 | 19,728 | |||||||||
119,621 | |||||||||||
TOTAL REAL ESTATE | 195,335 | ||||||||||
UTILITIES — 2.55% Electric Utilities — 0.89% | |||||||||||
EVN AG (v) | 900 | 21,210 | |||||||||
Fjordkraft Holding ASA (r) (v) | 2,200 | 13,079 | |||||||||
Hokkaido Electric Power Company, Inc. (v) | 2,800 | 12,692 | |||||||||
Hokuriku Electric Power Company (v) | 2,200 | 12,007 | |||||||||
58,988 |
The accompanying notes are an integral part of these financial statements.
40
Schedule of Investments — June 30, 2021
Hotchkis & Wiley International Small Cap Diversified Value Fund
Shares Held | Value | ||||||||||
Gas Utilities — 0.78% | |||||||||||
Hiroshima Gas Company Ltd. (v) | 5,700 | $ | 19,633 | ||||||||
Italgas SpA (v) | 5,000 | 32,706 | |||||||||
52,339 | |||||||||||
Independent Power and Renewable Electricity Producers — 0.17% | |||||||||||
Electric Power Development Company Ltd. (v) | 800 | 11,446 | |||||||||
Multi-Utilities — 0.71% | |||||||||||
ACEA SpA (v) | 600 | 13,872 | |||||||||
Centrica PLC (a) (v) | 46,500 | 33,144 | |||||||||
47,016 | |||||||||||
TOTAL UTILITIES | 169,789 | ||||||||||
Total common stocks (Cost $5,545,052) | 6,617,599 | ||||||||||
Total long-term investments (Cost $5,545,052) | 6,617,599 | ||||||||||
SHORT-TERM INVESTMENTS — 1.18% | Principal Amount | ||||||||||
Time Deposits — 1.18% | |||||||||||
Australia and New Zealand Banking Group Ltd., 0.01%, 07/01/2021* | $ | 78,937 | 78,937 | ||||||||
Total short-term investments (Cost $78,937) | 78,937 | ||||||||||
Total investments — 100.53% (Cost $5,623,989) | 6,696,536 | ||||||||||
Liabilities in excess of other assets — (0.53)% | (35,609 | ) | |||||||||
Net assets — 100.00% | $ | 6,660,927 |
(a) — Non-income producing security.
(m) — Restricted security. Purchased in a private placement transaction; resale to the public may require registration. The total market value of these securities was $44,417, which represented 0.67% of net assets.
(r) — Rule 144A security under the Securities Act of 1933. Purchased in a private placement transaction; resale to the public may require registration or be limited to qualified institutional buyers. The total market value of these securities was $246,242, which represented 3.70% of net assets.
(v) — Security was fair valued as a result of market movements following the close of local trading using a third-party vendor's proprietary fair value pricing model. The total market value of these securities was $5,129,906, which represented 77.01% of net assets. See Security Valuation in Note 1 in Notes to the Financial Statements.
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
41
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Value Opportunities Fund
Largest Holdings* | Percent of net assets | ||||||
F5 Networks, Inc. | 7.31 | % | |||||
General Electric Company | 5.59 | % | |||||
AMERCO | 5.12 | % | |||||
Wells Fargo & Company | 5.04 | % | |||||
NOV, Inc. | 4.43 | % | |||||
Microsoft Corp. | 3.87 | % | |||||
Credit Suisse Group AG | 3.84 | % | |||||
American International Group, Inc. | 3.55 | % | |||||
Range Resources Corp. | 3.33 | % | |||||
Triple-S Management Corp. | 3.08 | % |
* Excluding short-term securities
COMMON STOCKS — 97.27% | Shares Held | Value | |||||||||
COMMUNICATION SERVICES — 10.43% Interactive Media & Services — 2.55% | |||||||||||
Alphabet, Inc. (a) | 5,700 | $ | 13,918,203 | ||||||||
Media — 6.43% | |||||||||||
Discovery, Inc. (a) | 577,900 | 16,747,542 | |||||||||
MDC Partners, Inc. (a) | 1,666,400 | 9,748,440 | |||||||||
News Corp. | 329,900 | 8,501,523 | |||||||||
34,997,505 | |||||||||||
Wireless Telecommunication Services — 1.45% | |||||||||||
Vodafone Group PLC — ADR | 460,300 | 7,884,939 | |||||||||
TOTAL COMMUNICATION SERVICES | 56,800,647 | ||||||||||
CONSUMER DISCRETIONARY — 6.30% Automobiles — 2.35% | |||||||||||
General Motors Company (a) | 216,100 | 12,786,637 | |||||||||
Hotels, Restaurants & Leisure — 1.21% | |||||||||||
Accor SA (a) (v) | 175,300 | 6,556,840 | |||||||||
Internet & Catalog Retail — 0.43% | |||||||||||
Points International Ltd. (a) | 136,100 | 2,340,920 | |||||||||
Specialty Retail — 2.31% | |||||||||||
The ODP Corp. (a) | 262,270 | 12,591,583 | |||||||||
TOTAL CONSUMER DISCRETIONARY | 34,275,980 | ||||||||||
CONSUMER STAPLES — 3.37% Beverages — 0.49% | |||||||||||
Heineken Holding NV (v) | 26,500 | 2,674,077 | |||||||||
Tobacco — 2.88% | |||||||||||
Philip Morris International, Inc. | 158,300 | 15,689,113 | |||||||||
TOTAL CONSUMER STAPLES | 18,363,190 | ||||||||||
ENERGY — 13.32% Energy Equipment & Services — 5.25% | |||||||||||
Frank's International NV (a) (l) | 1,096,800 | 3,323,304 | |||||||||
Mcdermott International Ltd. (a) | 2,266,028 | 1,110,354 | |||||||||
NOV, Inc. (a) | 1,575,300 | 24,133,596 | |||||||||
28,567,254 |
Shares Held | Value | ||||||||||
Oil, Gas & Consumable Fuels — 8.07% | |||||||||||
Cairn Energy PLC (v) | 2,777,145 | $ | 5,609,536 | ||||||||
Equitrans Midstream Corp. | 493,000 | 4,195,430 | |||||||||
Hess Corp. | 105,800 | 9,238,456 | |||||||||
Range Resources Corp. (a) | 1,081,800 | 18,130,968 | |||||||||
Royal Dutch Shell PLC — ADR | 167,200 | 6,754,880 | |||||||||
43,929,270 | |||||||||||
TOTAL ENERGY | 72,496,524 | ||||||||||
FINANCIALS — 21.10% Banks — 6.20% | |||||||||||
Popular, Inc. | 84,400 | 6,334,220 | |||||||||
Wells Fargo & Company | 605,600 | 27,427,624 | |||||||||
33,761,844 | |||||||||||
Capital Markets — 7.89% | |||||||||||
Credit Suisse Group AG — ADR (l) | 1,994,500 | 20,922,305 | |||||||||
The Goldman Sachs Group, Inc. | 36,400 | 13,814,892 | |||||||||
State Street Corp. | 100,000 | 8,228,000 | |||||||||
42,965,197 | |||||||||||
Diversified Financial Services — 2.95% | |||||||||||
Berkshire Hathaway, Inc. (a) | 57,900 | 16,091,568 | |||||||||
Insurance — 4.06% | |||||||||||
American International Group, Inc. (c) | 406,300 | 19,339,880 | |||||||||
Global Indemnity Group LLC | 104,400 | 2,750,940 | |||||||||
22,090,820 | |||||||||||
TOTAL FINANCIALS | 114,909,429 | ||||||||||
HEALTH CARE — 5.55% Health Care Providers & Services — 5.55% | |||||||||||
Anthem, Inc. | 35,200 | 13,439,360 | |||||||||
Triple-S Management Corp. (a) | 753,600 | 16,782,672 | |||||||||
TOTAL HEALTH CARE | 30,222,032 |
The accompanying notes are an integral part of these financial statements.
42
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Value Opportunities Fund
Shares Held | Value | ||||||||||
INDUSTRIALS — 16.53% Aerospace & Defense — 1.66% | |||||||||||
Babcock International Group PLC (a) (v) | 2,247,600 | $ | 9,020,981 | ||||||||
Air Freight & Logistics — 3.03% | |||||||||||
Royal Mail PLC (c) (v) | 2,061,200 | 16,481,009 | |||||||||
Construction & Engineering — 0.98% | |||||||||||
Fluor Corp. (a) | 303,200 | 5,366,640 | |||||||||
Industrial Conglomerates — 5.59% | |||||||||||
General Electric Company (c) | 2,260,000 | 30,419,600 | |||||||||
Professional Services — 0.15% | |||||||||||
Hudson Global, Inc. (a) | 48,170 | 844,420 | |||||||||
Road & Rail — 5.12% | |||||||||||
AMERCO | 47,300 | 27,878,620 | |||||||||
TOTAL INDUSTRIALS | 90,011,270 | ||||||||||
INFORMATION TECHNOLOGY — 15.72% Communications Equipment — 7.31% | |||||||||||
F5 Networks, Inc. (a) | 213,200 | 39,795,912 | |||||||||
Electronic Equipment, Instruments & Components — 0.86% | |||||||||||
Arrow Electronics, Inc. (a) | 40,900 | 4,655,647 | |||||||||
IT Services — 2.62% | |||||||||||
Euronet Worldwide, Inc. (a) | 105,500 | 14,279,425 | |||||||||
Software — 4.93% | |||||||||||
Microsoft Corp. (c) | 77,800 | 21,076,020 | |||||||||
Oracle Corp. | 74,200 | 5,775,728 | |||||||||
26,851,748 | |||||||||||
TOTAL INFORMATION TECHNOLOGY | 85,582,732 | ||||||||||
MATERIALS — 2.79% Chemicals — 2.42% | |||||||||||
Iracore Investments Holdings, Inc. — Class A (Acquired 04/13/2017, Cost $6,892,250) (f) (i) (m) (o) (u) | 32,422 | 12,061,957 | |||||||||
UTEX Industries, Inc. (Acquired 05/11/2021, Cost $757,278) (a) (i) (m) | 24,058 | 1,094,639 | |||||||||
13,156,596 | |||||||||||
Metals & Mining — 0.37% | |||||||||||
American Zinc Recycling Corp. (Acquired 07/24/2014 — 12/10/2019, Cost $7,951,436) (a) (f) (i) (m) (u) | 7,042 | 2,008,815 | |||||||||
TOTAL MATERIALS | 15,165,411 | ||||||||||
REAL ESTATE — 2.16% Equity Real Estate Investment Trusts — 2.16% | |||||||||||
Seritage Growth Properties (a) (l) | 640,700 | 11,788,880 | |||||||||
TOTAL REAL ESTATE | 11,788,880 | ||||||||||
Total common stocks (Cost $441,185,293) | 529,616,095 |
CONVERTIBLE PREFERRED STOCKS — 0.71% | Shares Held | Value | |||||||||
INDUSTRIALS — 0.71% Construction & Engineering — 0.71% | |||||||||||
Fluor Corp., 6.500% (i) (r) | 3,651 | $ | 3,891,601 | ||||||||
TOTAL INDUSTRIALS | 3,891,601 | ||||||||||
Total convertible preferred stocks (Cost $3,651,000) | 3,891,601 | ||||||||||
PREFERRED STOCKS — 0.10% | |||||||||||
FINANCIALS — 0.10% Thrifts & Mortgage Finance — 0.10% | |||||||||||
Federal Home Loan Mortgage Corp. — Series K (a) | 33,900 | 121,701 | |||||||||
Federal Home Loan Mortgage Corp. — Series N (a) | 118,600 | 370,032 | |||||||||
Federal Home Loan Mortgage Corp. — Series S (a) | 18,700 | 62,084 | |||||||||
TOTAL FINANCIALS | 553,817 | ||||||||||
Total preferred stocks (Cost $274,262) | 553,817 | ||||||||||
TERM LOANS — 0.91% | Principal Amount | ||||||||||
CONSUMER DISCRETIONARY — 0.07% Specialty Retail — 0.07% | |||||||||||
Ascena Retail Group, Inc. 5.250% (3 Month LIBOR USD + 4.500%), 08/21/2022 (Acquired 07/15/2019 — 11/04/2019, Cost $5,774,961) (b) (d) (i) (m) | $ | 8,654,049 | 370,610 | ||||||||
TOTAL CONSUMER DISCRETIONARY | 370,610 | ||||||||||
ENERGY — 0.17% Energy Equipment & Services — 0.17% | |||||||||||
Lealand Finance Company BV 3.104% (1 Month LIBOR USD + 3.000%), 06/28/2024 (Acquired 06/30/2020, Cost $442,883) (b) (m) | 442,883 | 287,873 | |||||||||
1.104% Cash and 3.000% PIK (1 Month LIBOR USD + 4.000%), 06/30/2025 (Acquired 06/30/2020 — 06/01/2021, Cost $1,464,894) (b) (m) (p) | 1,328,531 | 612,785 | |||||||||
TOTAL ENERGY | 900,658 | ||||||||||
MATERIALS — 0.67% Chemicals — 0.51% | |||||||||||
Iracore International Holdings, Inc. 11.250% (1 Month LIBOR USD + 9.000%), 04/12/2024 (Acquired 04/13/2017, Cost $2,649,013) (b) (f) (m) (u) | 2,649,013 | 2,649,013 | |||||||||
UTEX Industries, Inc. 5.250% Cash or 5.750% PIK (1 Month LIBOR USD + 3.750%), 12/03/2025 (Acquired 05/11/2021 — 06/30/2021, Cost $98,168) (b) (m) (p) | 157,402 | 153,467 | |||||||||
2,802,480 |
The accompanying notes are an integral part of these financial statements.
43
Schedule of Investments — June 30, 2021
Hotchkis & Wiley Value Opportunities Fund
Principal Amount | Value | ||||||||||
Metals & Mining — 0.16% | |||||||||||
American Zinc Recycling Corp. 15.000% PIK, 06/30/2023 (Acquired 01/31/2020 — 02/04/2021, Cost $861,903) (f) (i) (m) (p) (u) | $ | 877,681 | $ | 877,681 | |||||||
TOTAL MATERIALS | 3,680,161 | ||||||||||
Total term loans (Cost $11,291,822) | 4,951,429 |
PURCHASED PUT OPTIONS — 0.05% | Contracts (100 shares per contract) | Notional Amount | |||||||||||||
CONSUMER DISCRETIONARY — 0.05% Automobiles — 0.05% | |||||||||||||||
Tesla, Inc. (a) Expiration: June 2022, Exercise Price: $160.00 | 100 | $ | 6,797,000 | 35,750 | |||||||||||
Expiration: January 2023, Exercise Price: $600.00 | 15 | 1,019,550 | 210,750 | ||||||||||||
TOTAL CONSUMER DISCRETIONARY | 246,500 | ||||||||||||||
Total purchased put options (Cost $853,297) | 246,500 | ||||||||||||||
Total long-term investments (Cost $457,255,674) | 539,259,442 |
COLLATERAL FOR SECURITIES ON LOAN — 0.71% | Shares Held | ||||||||||
Money Market Funds — 0.71% | |||||||||||
Invesco Short-Term Investments Trust Government & Agency Portfolio — Institutional Class, 0.03%^ | 3,886,401 | 3,886,401 |
Total collateral for securities on loan (Cost $3,886,401) | 3,886,401 |
SHORT-TERM INVESTMENTS — 0.61% | Principal Amount | ||||||||||
Time Deposits — 0.61% | |||||||||||
Banco Bilbao Vizcaya Argentaria SA, 0.01%, 07/01/2021* | $ | 3,293,537 | 3,293,537 | ||||||||
Citigroup, Inc., 0.01%, 07/01/2021* | GBP | 1 | 1 | ||||||||
Total short-term investments (Cost $3,293,538) | 3,293,538 | ||||||||||
Total investments — 100.36% (Cost $464,435,613) | 546,439,381 | ||||||||||
Liabilities in excess of other assets — (0.36)% | (1,980,988 | ) | |||||||||
Net assets — 100.00% | $ | 544,458,393 |
(a) — Non-income producing security.
(b) — The coupon rate shown on variable rate securities represents the rate at June 30, 2021.
(c) — All or a portion of this security is segregated as collateral for delayed delivery securities and/or futures contracts.
(d) — Issuer is currently in default on its regularly scheduled interest payments.
(f) — Security was fair valued under guidelines established by and under the general supervision and responsibility of the Trust's Board of Trustees. The total market value of these securities was $17,597,466, which represented 3.23% of net assets. See Security Valuation in Note 1 of Notes to the Financial Statements.
(i) — Illiquid security. The total market value of these securities was $20,305,303, which represented 3.73% of net assets.
(l) — All or a portion of this security is on loan. The total market value of securities on loan was $3,800,485. The remaining contractual maturity of all of the securities lending transactions is overnight and continuous.
(m) — Restricted security. Purchased in a private placement transaction; resale to the public may require registration. The total market value of these securities was $20,116,840, which represented 3.70% of net assets.
(o) — Affiliated issuer. See Note 6 in Notes to the Financial Statements.
(p) — Payment in-kind (PIK) security.
(r) — Rule 144A security under the Securities Act of 1933. Purchased in a private placement transaction; resale to the public may require registration or be limited to qualified institutional buyers. The total market value of these securities was $3,891,601, which represented 0.71% of net assets.
(u) — Value determined using significant unobservable inputs.
(v) — Security was fair valued as a result of market movements following the close of local trading using a third-party vendor's proprietary fair value pricing model. The total market value of these securities was $40,342,443, which represented 7.41% of net assets. See Security Valuation in Note 1 in Notes to the Financial Statements.
ADR — American Depositary Receipt
GBP — British Pound
LIBOR — London Interbank Offered Rate
USD — United States Dollar
^ — Rate shown is the 7-day yield as of June 30, 2021.
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
Schedule of Futures Contracts — June 30, 2021
Hotchkis & Wiley Value Opportunities Fund
Description | Number of Contracts Purchased (Sold) | Expiration | Notional Amount | Value/Unrealized Appreciation/ Depreciation | |||||||||||||||
British Pound Currency Futures | (181 | ) | September 2021 | $ | (15,616,906 | ) | $ | 403,023 |
The accompanying notes are an integral part of these financial statements.
44
Schedule of Investments — June 30, 2021
Hotchkis & Wiley High Yield Fund
Largest Issuers* | Percent of net assets | ||||||
American Zinc Recycling Corp. | 3.60 | % | |||||
iShares Broad USD High Yield Corporate Bond ETF | 2.29 | % | |||||
Ford Motor Company (includes Ford Motor Company and Ford Motor Credit Company LLC) | 1.64 | % | |||||
CCO Holdings LLC / CCO Holdings Capital Corp. | 1.56 | % | |||||
General Electric Company | 1.50 | % | |||||
Boardriders, Inc. (includes Boardriders, Inc. and Quiksilver, Inc.) | 1.23 | % | |||||
RA Parent, Inc. | 1.15 | % | |||||
Bausch Health Companies, Inc. | 0.98 | % | |||||
Brookfield Asset Management, Inc. (includes Brookfield Residential Properties, Inc. / Brookfield Residential US LLC and Clarios Global LP / Clarios US Finance Company) | 0.97 | % | |||||
Iracore Holdings Corp. (includes Iracore International Holdings, Inc. and Iracore Investments Holdings, Inc.) | 0.91 | % |
* Excluding short-term securities
CORPORATE BONDS — 79.35% | Principal Amount | Value | |||||||||
Advertising — 0.51% | |||||||||||
MDC Partners, Inc. 7.500%, 05/01/2024 (r) (s) | $ | 5,532,000 | $ | 5,608,065 | |||||||
Aerospace/Defense — 1.62% | |||||||||||
F-Brasile SpA / F-Brasile US LLC 7.375%, 08/15/2026 (r) | 6,328,000 | 6,541,570 | |||||||||
Spirit AeroSystems, Inc. 7.500%, 04/15/2025 (r) | 4,533,000 | 4,852,055 | |||||||||
TransDigm, Inc. 6.250%, 03/15/2026 (r) | 6,194,000 | 6,542,413 | |||||||||
17,936,038 | |||||||||||
Airlines — 0.50% | |||||||||||
United Airlines, Inc. 4.375%, 04/15/2026 (r) | 5,343,000 | 5,537,645 | |||||||||
Apparel/Textiles — 0.32% | |||||||||||
The William Carter Company 5.625%, 03/15/2027 (r) | 3,318,000 | 3,500,623 | |||||||||
Auto Loans — 1.24% | |||||||||||
Ford Motor Credit Company LLC 5.113%, 05/03/2029 (c) | 12,286,000 | 13,770,640 | |||||||||
Auto Parts & Equipment — 2.98% | |||||||||||
Adient Global Holdings Ltd. 4.875%, 08/15/2026 (r) | 3,611,000 | 3,721,063 |
Principal Amount | Value | ||||||||||
American Axle & Manufacturing, Inc. 6.875%, 07/01/2028 | $ | 5,662,000 | $ | 6,191,907 | |||||||
Clarios Global LP / Clarios US Finance Company 6.250%, 05/15/2026 (r) | 4,910,000 | 5,236,810 | |||||||||
The Goodyear Tire & Rubber Company 4.875%, 03/15/2027 | 5,580,000 | 5,927,829 | |||||||||
Meritor, Inc. 4.500%, 12/15/2028 (r) | 5,770,000 | 5,860,878 | |||||||||
Patrick Industries, Inc. 4.750%, 05/01/2029 (r) | 6,156,000 | 6,134,392 | |||||||||
33,072,879 | |||||||||||
Automakers — 0.84% | |||||||||||
Ford Motor Company 9.000%, 04/22/2025 | 3,552,000 | 4,383,683 | |||||||||
General Motors Company 5.200%, 04/01/2045 | 4,035,000 | 4,995,449 | |||||||||
9,379,132 | |||||||||||
Banking — 0.87% | |||||||||||
BNP Paribas SA 6.625% (Fixed until 03/24/2024, then 5 Year Swap Rate USD + 4.149%), Perpetual (b) (r) | 4,147,000 | 4,558,466 |
The accompanying notes are an integral part of these financial statements.
45
Schedule of Investments — June 30, 2021
Hotchkis & Wiley High Yield Fund
Principal Amount | Value | ||||||||||
Texas Capital Bancshares, Inc. 4.000% (Fixed until 05/05/2026, then 5 Year Treasury Constant Maturity + 3.150%), 05/06/2031 (b) | $ | 4,856,000 | $ | 5,057,281 | |||||||
9,615,747 | |||||||||||
Building & Construction — 3.10% | |||||||||||
Ashton Woods USA LLC / Ashton Woods Finance Company 6.750%, 08/01/2025 (r) | 5,135,000 | 5,339,861 | |||||||||
Brookfield Residential Properties, Inc. / Brookfield Residential US LLC 4.875%, 02/15/2030 (r) | 5,584,000 | 5,541,003 | |||||||||
Fluor Corp. 4.250%, 09/15/2028 | 2,755,000 | 2,799,769 | |||||||||
Herc Holdings, Inc. 5.500%, 07/15/2027 (r) | 4,424,000 | 4,669,399 | |||||||||
Installed Building Products, Inc. 5.750%, 02/01/2028 (r) | 5,000,000 | 5,281,550 | |||||||||
Tri Pointe Homes, Inc. 5.250%, 06/01/2027 | 4,755,000 | 5,176,198 | |||||||||
Weekley Homes LLC / Weekley Finance Corp. 4.875%, 09/15/2028 (r) | 5,353,000 | 5,558,876 | |||||||||
34,366,656 | |||||||||||
Building Materials — 1.94% | |||||||||||
Arcosa, Inc. 4.375%, 04/15/2029 (r) | 5,670,000 | 5,780,565 | |||||||||
Builders FirstSource, Inc. 6.750%, 06/01/2027 (r) | 3,550,000 | 3,812,806 | |||||||||
Foundation Building Materials, Inc. 6.000%, 03/01/2029 (r) | 2,684,000 | 2,660,864 | |||||||||
Resideo Funding, Inc. 6.125%, 11/01/2026 (r) | 4,755,000 | 5,008,394 | |||||||||
WESCO Distribution, Inc. 7.250%, 06/15/2028 (r) | 3,810,000 | 4,248,855 | |||||||||
21,511,484 | |||||||||||
Cable & Satellite TV — 3.89% | |||||||||||
CCO Holdings LLC / CCO Holdings Capital Corp. 5.375%, 06/01/2029 (c) (r) | 15,791,000 | 17,280,881 | |||||||||
CSC Holdings LLC 5.750%, 01/15/2030 (r) | 7,766,000 | 8,076,640 | |||||||||
Telenet Finance Luxembourg 5.500%, 03/01/2028 (r) | 6,000,000 | 6,322,500 | |||||||||
Virgin Media Secured Finance PLC 5.500%, 05/15/2029 (r) | 5,453,000 | 5,868,791 | |||||||||
Ziggo BV 4.875%, 01/15/2030 (r) | 5,461,000 | 5,604,734 | |||||||||
43,153,546 |
Principal Amount | Value | ||||||||||
Chemicals — 2.36% | |||||||||||
Axalta Coating Systems LLC / Axalta Coating Systems Dutch Holding B BV 4.750%, 06/15/2027 (r) | $ | 5,240,000 | $ | 5,505,511 | |||||||
Illuminate Buyer LLC / Illuminate Holdings IV, Inc. 9.000%, 07/01/2028 (r) | 2,367,000 | 2,643,986 | |||||||||
SCIH Salt Holdings, Inc. 4.875%, 05/01/2028 (r) | 5,445,000 | 5,458,286 | |||||||||
Trinseo Materials Operating SCA / Trinseo Materials Finance, Inc. 5.125%, 04/01/2029 (r) | 5,996,000 | 6,139,514 | |||||||||
Univar Solutions USA, Inc. 5.125%, 12/01/2027 (r) | 6,119,000 | 6,452,547 | |||||||||
26,199,844 | |||||||||||
Consumer — Products — 0.52% | |||||||||||
Winnebago Industries, Inc. 6.250%, 07/15/2028 (r) | 5,335,000 | 5,760,200 | |||||||||
Consumer/Commercial/Lease Financing — 0.83% | |||||||||||
Credit Acceptance Corp. 6.625%, 03/15/2026 | 5,555,000 | 5,853,581 | |||||||||
Rent-A-Center, Inc. 6.375%, 02/15/2029 (r) | 3,102,000 | 3,336,977 | |||||||||
9,190,558 | |||||||||||
Diversified Capital Goods — 2.66% | |||||||||||
General Electric Company 3.449% (3 Month LIBOR USD + 3.330%), Perpetual (b) | 17,019,000 | 16,699,894 | |||||||||
Matthews International Corp. 5.250%, 12/01/2025 (r) | 5,692,000 | 5,873,660 | |||||||||
TK Elevator US Newco, Inc. 5.250%, 07/15/2027 (r) | 6,607,000 | 6,970,385 | |||||||||
29,543,939 | |||||||||||
Electric — Generation — 0.78% | |||||||||||
Calpine Corp. 5.000%, 02/01/2031 (r) | 3,165,000 | 3,155,505 | |||||||||
3.750%, 03/01/2031 (r) | 5,794,000 | 5,525,593 | |||||||||
8,681,098 | |||||||||||
Electric — Integrated — 0.54% | |||||||||||
PG&E Corp. 5.250%, 07/01/2030 | 5,876,000 | 5,948,480 | |||||||||
Energy — Exploration & Production — 3.99% | |||||||||||
Apache Corp. 4.375%, 10/15/2028 | 4,276,000 | 4,557,746 | |||||||||
Bonanza Creek Energy, Inc. 7.500%, 04/30/2026 | 1,962,025 | 1,986,040 | |||||||||
California Resources Corp. 7.125%, 02/01/2026 (r) | 3,001,000 | 3,162,034 | |||||||||
Callon Petroleum Company 6.375%, 07/01/2026 | 7,659,000 | 7,343,756 |
The accompanying notes are an integral part of these financial statements.
46
Schedule of Investments — June 30, 2021
Hotchkis & Wiley High Yield Fund
Principal Amount | Value | ||||||||||
Hilcorp Energy I LP / Hilcorp Finance Company 6.000%, 02/01/2031 (r) | $ | 3,643,000 | $ | 3,866,134 | |||||||
Independence Energy Finance LLC 7.250%, 05/01/2026 (r) | 3,316,000 | 3,492,411 | |||||||||
Moss Creek Resources Holdings, Inc. 7.500%, 01/15/2026 (r) | 5,906,000 | 5,499,992 | |||||||||
Murphy Oil Corp. 6.375%, 07/15/2028 | 8,345,000 | 8,809,816 | |||||||||
Southwestern Energy Company 7.750%, 10/01/2027 | 5,123,000 | 5,564,833 | |||||||||
44,282,762 | |||||||||||
Food — Wholesale — 2.05% | |||||||||||
Central Garden & Pet Company 4.125%, 04/30/2031 (r) | 5,450,000 | 5,526,572 | |||||||||
Kraft Heinz Foods Company 5.000%, 07/15/2035 | 3,247,000 | 3,992,779 | |||||||||
Post Holdings, Inc. 4.500%, 09/15/2031 (r) | 7,100,000 | 7,097,160 | |||||||||
TreeHouse Foods, Inc. 4.000%, 09/01/2028 | 6,220,000 | 6,182,649 | |||||||||
22,799,160 | |||||||||||
Food & Drug Retailers — 0.40% | |||||||||||
Murphy Oil USA, Inc. 5.625%, 05/01/2027 | 4,204,000 | 4,449,345 | |||||||||
Forestry/Paper — 2.61% | |||||||||||
Enviva Partners LP / Enviva Partners Finance Corp. 6.500%, 01/15/2026 (r) | 5,602,000 | 5,865,294 | |||||||||
Mercer International, Inc. 5.125%, 02/01/2029 (r) | 7,414,000 | 7,638,273 | |||||||||
Rayonier AM Products, Inc. 7.625%, 01/15/2026 (r) | 3,489,000 | 3,641,644 | |||||||||
Schweitzer-Mauduit International, Inc. 6.875%, 10/01/2026 (r) | 6,282,000 | 6,672,678 | |||||||||
SpA Holdings 3 Oy 4.875%, 02/04/2028 (r) | 5,077,000 | 5,132,593 | |||||||||
28,950,482 | |||||||||||
Gaming — 3.95% | |||||||||||
Boyd Gaming Corp. 4.750%, 06/15/2031 (r) | 5,343,000 | 5,550,041 | |||||||||
Everi Holdings, Inc. 5.000%, 07/15/2029 (e) (r) | 5,466,000 | 5,593,979 | |||||||||
International Game Technology PLC 6.250%, 01/15/2027 (r) | 5,228,000 | 5,975,761 | |||||||||
Jacobs Entertainment, Inc. 7.875%, 02/01/2024 (c) (r) | 5,545,000 | 5,810,107 | |||||||||
MGM Resorts International 5.500%, 04/15/2027 | 5,003,000 | 5,505,551 |
Principal Amount | Value | ||||||||||
Peninsula Pacific Entertainment LLC / Peninsula Pacific Entertainment Finance 8.500%, 11/15/2027 (r) | $ | 2,526,000 | $ | 2,716,120 | |||||||
Penn National Gaming, Inc. 5.625%, 01/15/2027 (r) | 6,163,000 | 6,409,520 | |||||||||
Wynn Macau Ltd. 5.500%, 10/01/2027 (r) | 6,007,000 | 6,268,004 | |||||||||
43,829,083 | |||||||||||
Gas Distribution — 3.85% | |||||||||||
Antero Midstream Partners LP / Antero Midstream Finance Corp. 5.750%, 03/01/2027 (r) | 5,700,000 | 5,945,356 | |||||||||
DT Midstream, Inc. 4.375%, 06/15/2031 (r) | 5,465,000 | 5,590,914 | |||||||||
EQM Midstream Partners LP 5.500%, 07/15/2028 | 5,593,000 | 6,054,870 | |||||||||
Harvest Midstream I LP 7.500%, 09/01/2028 (r) | 4,997,000 | 5,436,736 | |||||||||
Holly Energy Partners LP / Holly Energy Finance Corp. 5.000%, 02/01/2028 (r) | 5,575,000 | 5,711,587 | |||||||||
Oasis Midstream Partners LP / OMP Finance Corp. 8.000%, 04/01/2029 (r) | 5,175,000 | 5,516,214 | |||||||||
Rockpoint Gas Storage Canada Ltd. 7.000%, 03/31/2023 (r) | 8,325,000 | 8,527,922 | |||||||||
42,783,599 | |||||||||||
Health Facilities — 2.28% | |||||||||||
CHS / Community Health Systems, Inc. 8.000%, 03/15/2026 (r) | 5,006,000 | 5,400,297 | |||||||||
6.875%, 04/01/2028 (r) | 2,742,000 | 2,716,157 | |||||||||
Encompass Health Corp. 4.750%, 02/01/2030 | 5,050,000 | 5,372,644 | |||||||||
HCA, Inc. 5.875%, 02/01/2029 (c) | 2,222,000 | 2,689,720 | |||||||||
Tenet Healthcare Corp. 6.250%, 02/01/2027 (c) (r) | 4,675,000 | 4,885,375 | |||||||||
5.125%, 11/01/2027 (r) | 4,052,000 | 4,254,742 | |||||||||
25,318,935 | |||||||||||
Health Services — 1.09% | |||||||||||
Charles River Laboratories International, Inc. 4.000%, 03/15/2031 (r) | 5,750,000 | 5,989,660 | |||||||||
DaVita, Inc. 4.625%, 06/01/2030 (r) | 5,965,000 | 6,140,789 | |||||||||
12,130,449 | |||||||||||
Hotels — 1.96% | |||||||||||
Churchill Downs, Inc. 5.500%, 04/01/2027 (r) | 4,606,000 | 4,810,375 | |||||||||
Hilton Grand Vacations Borrower Escrow LLC / Hilton Grand Vacations Borrower 5.000%, 06/01/2029 (r) | 5,462,000 | 5,591,722 |
The accompanying notes are an integral part of these financial statements.
47
Schedule of Investments — June 30, 2021
Hotchkis & Wiley High Yield Fund
Principal Amount | Value | ||||||||||
Marriott Ownership Resorts, Inc. 4.500%, 06/15/2029 (r) | $ | 5,637,000 | $ | 5,721,555 | |||||||
Park Intermediate Holdings LLC / PK Domestic Property LLC / PK Finance Co-Issuer 4.875%, 05/15/2029 (r) | 5,475,000 | 5,670,458 | |||||||||
21,794,110 | |||||||||||
Investments & Miscellaneous Financial Services — 0.72% | |||||||||||
SoftBank Group Corp. 6.000% (Fixed until 07/18/2023, then 5 Year Mid Swap Rate USD + 4.226%), Perpetual (b) | 7,930,000 | 8,036,460 | |||||||||
Machinery — 1.07% | |||||||||||
Cleaver-Brooks, Inc. 7.875%, 03/01/2023 (r) | 7,098,000 | 7,041,784 | |||||||||
NESCO Holdings II, Inc. 5.500%, 04/15/2029 (r) | 4,620,000 | 4,827,900 | |||||||||
11,869,684 | |||||||||||
Media — Diversified — 0.82% | |||||||||||
National CineMedia LLC 5.750%, 08/15/2026 | 7,407,000 | 6,758,887 | |||||||||
5.875%, 04/15/2028 (r) | 2,331,000 | 2,293,611 | |||||||||
9,052,498 | |||||||||||
Media Content — 1.29% | |||||||||||
News Corp. 3.875%, 05/15/2029 (r) | 3,632,000 | 3,672,860 | |||||||||
Sirius XM Radio, Inc. 4.000%, 07/15/2028 (r) | 5,507,000 | 5,679,094 | |||||||||
Townsquare Media, Inc. 6.875%, 02/01/2026 (r) | 4,590,000 | 4,917,037 | |||||||||
14,268,991 | |||||||||||
Media — Cable — 0.31% | |||||||||||
Vmed O2 UK Financing I PLC 4.750%, 07/15/2031 (e) (r) | 3,413,000 | 3,472,727 | |||||||||
Medical Products — 0.58% | |||||||||||
Varex Imaging Corp. 7.875%, 10/15/2027 (c) (r) | 5,725,000 | 6,433,011 | |||||||||
Metals/Mining Excluding Steel — 1.68% | |||||||||||
Grinding Media, Inc. / Moly-Cop AltaSteel Ltd. 7.375%, 12/15/2023 (r) | 5,561,000 | 5,705,530 | |||||||||
Kaiser Aluminum Corp. 4.500%, 06/01/2031 (r) | 5,579,000 | 5,734,766 | |||||||||
Rain CII Carbon LLC / CII Carbon Corp. 7.250%, 04/01/2025 (c) (r) | 7,009,000 | 7,260,483 | |||||||||
18,700,779 | |||||||||||
Oil Field Equipment & Services — 3.44% | |||||||||||
Bristow Group, Inc. 6.875%, 03/01/2028 (r) | 2,770,000 | 2,829,375 | |||||||||
ChampionX Corp. 6.375%, 05/01/2026 | 2,279,000 | 2,396,198 |
Principal Amount | Value | ||||||||||
Exterran Energy Solutions LP / EES Finance Corp. 8.125%, 05/01/2025 (c) | $ | 10,190,000 | $ | 9,053,560 | |||||||
Nabors Industries Ltd. 7.500%, 01/15/2028 (r) | 4,331,000 | 4,166,422 | |||||||||
Shelf Drilling Holdings Ltd. 8.250%, 02/15/2025 (r) | 8,496,000 | 6,775,942 | |||||||||
TechnipFMC PLC 6.500%, 02/01/2026 (r) | 3,995,000 | 4,314,710 | |||||||||
Transocean Poseidon Ltd. 6.875%, 02/01/2027 (r) | 5,513,000 | 5,548,559 | |||||||||
Valaris Ltd. 8.250% Cash or 12.000% PIK or 5.125% Cash & 5.125% PIK, 04/30/2028 (p) (r) | 3,006,000 | 3,131,500 | |||||||||
38,216,266 | |||||||||||
Oil Refining & Marketing — 1.95% | |||||||||||
Parkland Corp. 5.875%, 07/15/2027 (r) | 5,286,000 | 5,651,712 | |||||||||
PBF Holding Company LLC / PBF Finance Corp. 9.250%, 05/15/2025 (r) | 3,149,000 | 3,176,381 | |||||||||
6.000%, 02/15/2028 (c) | 9,762,000 | 6,699,563 | |||||||||
Renewable Energy Group, Inc. 5.875%, 06/01/2028 (r) | 5,787,000 | 6,085,551 | |||||||||
21,613,207 | |||||||||||
Packaging — 0.57% | |||||||||||
Plastipak Holdings, Inc. 6.250%, 10/15/2025 (c) (r) | 6,120,000 | 6,278,661 | |||||||||
Personal & Household Products — 1.08% | |||||||||||
Edgewell Personal Care Company 5.500%, 06/01/2028 (r) | 5,526,000 | 5,868,612 | |||||||||
Energizer Holdings, Inc. 4.375%, 03/31/2029 (r) | 6,124,000 | 6,138,636 | |||||||||
12,007,248 | |||||||||||
Pharmaceuticals — 2.58% | |||||||||||
Bausch Health Companies, Inc. 5.000%, 02/15/2029 (r) | 5,755,000 | 5,373,846 | |||||||||
7.250%, 05/30/2029 (r) | 5,408,000 | 5,541,605 | |||||||||
Jazz Securities DAC 4.375%, 01/15/2029 (r) | 5,332,000 | 5,534,883 | |||||||||
Organon & Company / Organon Foreign Debt Co-Issuer BV 5.125%, 04/30/2031 (r) | 6,431,000 | 6,633,255 | |||||||||
Par Pharmaceutical, Inc. 7.500%, 04/01/2027 (r) | 5,372,000 | 5,499,128 | |||||||||
28,582,717 | |||||||||||
Printing & Publishing — 0.78% | |||||||||||
Meredith Corp. 6.500%, 07/01/2025 (r) | 4,137,000 | 4,474,048 |
The accompanying notes are an integral part of these financial statements.
48
Schedule of Investments — June 30, 2021
Hotchkis & Wiley High Yield Fund
Principal Amount | Value | ||||||||||
Vericast Corp. 8.375%, 08/15/2022 (r) | $ | 4,115,000 | $ | 4,202,876 | |||||||
8,676,924 | |||||||||||
Real Estate Development & Management — 0.53% | |||||||||||
Realogy Group LLC / Realogy Co-Issuer Corp. 5.750%, 01/15/2029 (r) | 5,660,000 | 5,924,831 | |||||||||
Recreation & Travel — 2.07% | |||||||||||
Boyne USA, Inc. 4.750%, 05/15/2029 (r) | 6,137,000 | 6,349,432 | |||||||||
Carnival Corp. 11.500%, 04/01/2023 (r) | 5,467,000 | 6,159,532 | |||||||||
5.750%, 03/01/2027 (r) | 2,630,000 | 2,758,213 | |||||||||
VOC Escrow Ltd. 5.000%, 02/15/2028 (r) | 7,582,000 | 7,680,566 | |||||||||
22,947,743 | |||||||||||
Reinsurance — 0.60% | |||||||||||
Highlands Holdings Bond Issuer Ltd. / Highlands Holdings Bond Co-Issuer, Inc. 7.625% Cash or 8.375% PIK, 10/15/2025 (p) (r) | 6,312,000 | 6,695,738 | |||||||||
Restaurants — 0.81% | |||||||||||
1011778 BC ULC / New Red Finance, Inc. 4.000%, 10/15/2030 (r) | 5,243,000 | 5,079,156 | |||||||||
Dave & Buster's, Inc. 7.625%, 11/01/2025 (r) | 3,625,000 | 3,905,938 | |||||||||
8,985,094 | |||||||||||
Software/Services — 1.02% | |||||||||||
Twilio, Inc. 3.625%, 03/15/2029 | 5,510,000 | 5,627,088 | |||||||||
VM Consolidated, Inc. 5.500%, 04/15/2029 (r) | 5,540,000 | 5,656,672 | |||||||||
11,283,760 | |||||||||||
Specialty Retail — 3.77% | |||||||||||
Academy Ltd. 6.000%, 11/15/2027 (r) | 5,999,000 | 6,432,937 | |||||||||
Bed Bath & Beyond, Inc. 5.165%, 08/01/2044 | 10,047,000 | 9,349,246 | |||||||||
Eagle Intermediate Global Holding BV / Ruyi US Finance LLC 7.500%, 05/01/2025 (r) | 8,544,000 | 8,255,640 | |||||||||
Liberty Interactive LLC 8.250%, 02/01/2030 (c) | 5,620,000 | 6,430,728 | |||||||||
Lithia Motors, Inc. 4.375%, 01/15/2031 (r) | 5,547,000 | 5,949,130 | |||||||||
PetSmart, Inc. / PetSmart Finance Corp. 4.750%, 02/15/2028 (r) | 5,266,000 | 5,476,640 | |||||||||
41,894,321 | |||||||||||
Steel Producers/Products — 0.38% | |||||||||||
Allegheny Technologies, Inc. 5.875%, 12/01/2027 | 4,031,000 | 4,236,742 |
Principal Amount | Value | ||||||||||
Support — Services — 1.32% | |||||||||||
Gartner, Inc. 4.500%, 07/01/2028 (r) | $ | 4,736,000 | $ | 5,008,012 | |||||||
Summer BC Bidco B LLC 5.500%, 10/31/2026 (e) (r) | 3,149,000 | 3,205,493 | |||||||||
Vizient, Inc. 6.250%, 05/15/2027 (r) | 6,048,000 | 6,417,291 | |||||||||
14,630,796 | |||||||||||
Technology Hardware & Equipment — 1.82% | |||||||||||
CommScope, Inc. 6.000%, 03/01/2026 (r) | 4,301,000 | 4,545,942 | |||||||||
CommScope Technologies LLC 6.000%, 06/15/2025 (r) | 3,833,000 | 3,919,243 | |||||||||
NCR Corp. 6.125%, 09/01/2029 (r) | 5,571,000 | 6,080,245 | |||||||||
Xerox Holdings Corp. 5.500%, 08/15/2028 (r) | 5,450,000 | 5,670,180 | |||||||||
20,215,610 | |||||||||||
Telecom — Satellite — 0.54% | |||||||||||
Telesat Canada / Telesat LLC 5.625%, 12/06/2026 (r) | 5,915,000 | 5,944,575 | |||||||||
Telecom — Wireline Integrated & Services — 0.62% | |||||||||||
Frontier Communications Holdings LLC 5.875%, 10/15/2027 (r) | 3,575,000 | 3,834,187 | |||||||||
Uniti Group LP / Uniti Group Finance, Inc. / CSL Capital LLC 6.500%, 02/15/2029 (r) | 3,070,000 | 3,081,958 | |||||||||
6,916,145 | |||||||||||
Tobacco — 0.50% | |||||||||||
Turning Point Brands, Inc. 5.625%, 02/15/2026 (r) | 5,336,000 | 5,528,096 | |||||||||
Transport Infrastructure/Services — 0.82% | |||||||||||
GasLog Ltd. 8.875%, 03/22/2022 | 8,934,000 | 9,144,083 | |||||||||
Total corporate bonds (Cost $846,160,111) | 880,671,206 | ||||||||||
CONVERTIBLE BONDS — 0.74% | |||||||||||
Hotels — 0.53% | |||||||||||
Pebblebrook Hotel Trust 1.750%, 12/15/2026 | 5,190,000 | 5,911,410 | |||||||||
Railroads — 0.21% | |||||||||||
The Greenbrier Companies, Inc. 2.875%, 04/15/2028 (r) | 2,183,000 | 2,283,418 | |||||||||
Total convertible bonds (Cost $7,447,986) | 8,194,828 |
The accompanying notes are an integral part of these financial statements.
49
Schedule of Investments — June 30, 2021
Hotchkis & Wiley High Yield Fund
Principal Amount | Value | ||||||||||
ASSET-BACKED SECURITIES — 0.42% | |||||||||||
Airlines — 0.42% | |||||||||||
Air Canada Pass-Through Trust, Series 2020-2, Class A 5.250%, 04/01/2029 (r) | $ | 4,333,374 | $ | 4,710,245 | |||||||
Total asset-backed securities (Cost $4,398,472) | 4,710,245 | ||||||||||
TERM LOANS — 7.82% | |||||||||||
Airlines — 0.51% | |||||||||||
American Airlines, Inc. 5.500% (1 Month LIBOR USD + 4.750%), 04/20/2028 (Acquired 06/24/2021, Cost $5,650,270) (b) (e) (m) | 5,425,000 | 5,662,696 | |||||||||
Building & Construction — 0.54% | |||||||||||
Tutor Perini Corp. 5.750% (1 Month LIBOR USD + 4.750%), 08/18/2027 (Acquired 08/14/2020, Cost $5,829,001) (b) (m) | 5,937,656 | 6,016,835 | |||||||||
Building Materials — 0.46% | |||||||||||
Foundation Building Materials, Inc. 3.750% (1 Month LIBOR USD + 3.250%), 01/31/2028 (Acquired 02/03/2021, Cost $5,105,610) (b) (m) | 5,113,710 | 5,085,482 | |||||||||
Chemicals — 0.58% | |||||||||||
Momentive Performance Materials USA LLC 3.360% (3 Month LIBOR USD + 3.250%), 05/15/2024 (Acquired 04/18/2019, Cost $6,389,353) (b) (m) | 6,421,460 | 6,388,036 | |||||||||
Consumer/Commercial/Lease Financing — 0.31% | |||||||||||
Rent-A-Center, Inc. 4.750% (1 Month LIBOR USD + 4.000%), 02/17/2028 (Acquired 02/04/2021, Cost $3,393,181) (b) (m) | 3,396,488 | 3,404,979 | |||||||||
Forestry/Paper — 0.30% | |||||||||||
Schweitzer-Mauduit International, Inc. 4.500% (1 Month LIBOR USD + 3.750%), 02/09/2028 (Acquired 02/23/2021, Cost $3,366,000) (b) (m) | 3,400,000 | 3,366,000 | |||||||||
Machinery — 0.62% | |||||||||||
Granite US Holdings Corp. 4.147% (1 Month LIBOR USD + 4.000%), 09/30/2026 (Acquired 09/25/2019, Cost $6,712,235) (b) (m) | 6,882,198 | 6,916,610 | |||||||||
Metals/Mining Excluding Steel — 0.61% | |||||||||||
American Zinc Recycling Corp. 15.000% PIK, 06/30/2023 (Acquired 01/31/2020 — 02/04/2021, Cost $6,683,178) (f) (i) (m) (p) (u) | 6,805,523 | 6,805,523 | |||||||||
Oil Field Equipment & Services — 0.52% | |||||||||||
ChampionX Holding, Inc. 6.000% (1 Month LIBOR USD + 5.000%), 06/03/2027 (Acquired 05/29/2020 — 06/11/2020, Cost $3,676,947) (b) (m) | 3,800,000 | 3,883,125 |
Principal Amount | Value | ||||||||||
Iracore International Holdings, Inc. 11.250% (1 Month LIBOR USD + 9.000%), 04/12/2024 (Acquired 04/13/2017, Cost $1,826,992) (b) (f) (i) (m) (u) | $ | 1,826,992 | $ | 1,826,992 | |||||||
5,710,117 | |||||||||||
Oil Refining & Marketing — 0.37% | |||||||||||
Par Petroleum LLC 6.936% (3 Month LIBOR USD + 6.750%), 01/12/2026 (Acquired 02/13/2020 — 04/16/2021, Cost $4,036,207) (b) (m) | 4,115,460 | 4,103,114 | |||||||||
Personal & Household Products — 0.51% | |||||||||||
Journey Personal Care Corp. 5.000% (1 Month LIBOR USD + 4.250%), 03/01/2028 (Acquired 02/19/2021, Cost $5,643,640) (b) (m) | 5,672,000 | 5,693,298 | |||||||||
Pharmaceuticals — 0.67% | |||||||||||
Mallinckrodt International Finance SA 6.250% (3 Month LIBOR USD + 5.500%), 02/24/2025 (Acquired 12/23/2019 — 01/22/2020, Cost $6,649,075) (b) (d) (m) | 7,650,502 | 7,440,113 | |||||||||
Software/Services — 0.91% | |||||||||||
The Dun & Bradstreet Corp. 3.345% (1 Month LIBOR USD + 3.250%), 02/06/2026 (Acquired 02/01/2019, Cost $4,891,064) (b) (m) | 4,962,164 | 4,944,325 | |||||||||
Syncapay, Inc. 7.500% (1 Month LIBOR USD + 6.500%), 12/10/2027 (Acquired 12/31/2020, Cost $4,891,000) (b) (m) | 5,085,625 | 5,142,864 | |||||||||
10,087,189 | |||||||||||
Specialty Retail — 0.46% | |||||||||||
Ascena Retail Group, Inc. 5.250% (3 Month LIBOR USD + 4.500%), 08/21/2022 (Acquired 07/15/2019 — 08/23/2019, Cost $6,069,904) (b) (d) (i) (m) | 9,145,977 | 391,677 | |||||||||
Boardriders, Inc. 7.500% (3 Month LIBOR USD + 6.500%), 04/23/2024 (Acquired 03/21/2018, Cost $6,178,826) (b) (i) (m) | 6,249,896 | 3,343,694 | |||||||||
9.000% (1 Month LIBOR USD + 8.000%), 04/23/2024 (Acquired 10/07/2020 — 05/05/2021, Cost $1,464,656) (b) (m) | 1,464,656 | 1,369,454 | |||||||||
5,104,825 | |||||||||||
Support — Services — 0.45% | |||||||||||
Drive Chassis Holdco LLC 7.188% (3 Month LIBOR USD + 7.000%), 04/10/2026 (Acquired 04/12/2019, Cost $4,729,660) (b) (m) | 4,930,000 | 5,018,321 | |||||||||
Total term loans (Cost $93,186,799) | 86,803,138 |
The accompanying notes are an integral part of these financial statements.
50
Schedule of Investments — June 30, 2021
Hotchkis & Wiley High Yield Fund
CONVERTIBLE PREFERRED STOCKS — 0.56% | Shares Held | Value | |||||||||
Building & Construction — 0.56% | |||||||||||
Fluor Corp., 6.500% (i) (r) | 5,802 | $ | 6,184,352 | ||||||||
Total convertible preferred stocks (Cost $5,802,000) | 6,184,352 | ||||||||||
PREFERRED STOCKS — 1.08% | |||||||||||
Hotels — 0.27% | |||||||||||
Pebblebrook Hotel Trust — Series F, 6.300% | 120,837 | 3,055,968 | |||||||||
Specialty Retail — 0.81% | |||||||||||
Quiksilver, Inc. — Series B (Acquired 07/11/2013 — 08/09/2019, Cost $28,937,490) (a) (f) (i) (m) (u) | 13,810,639 | 8,976,915 | |||||||||
Total preferred stocks (Cost $31,637,696) | 12,032,883 | ||||||||||
COMMON STOCKS — 6.40% | |||||||||||
Energy — Exploration & Production — 1.30% | |||||||||||
Bonanza Creek Energy, Inc. | 159,247 | 7,495,756 | |||||||||
Fieldwood Energy, Inc. (a) (f) (i) (u) | 30,428 | 0 | |||||||||
Fieldwood Energy, Inc. (Acquired 05/03/2018, Cost $2,629,337) (a) (f) (i) (m) (u) | 112,702 | 0 | |||||||||
Jonah Energy Parent LLC (Acquired 12/31/2020, Cost $204,836) (a) (f) (i) (m) (u) | 13,656 | 157,044 | |||||||||
Lonestar Resources US, Inc. (a) (o) | 541,906 | 5,554,537 | |||||||||
PetroQuest Energy, Inc. (a) (f) (i) (o) (u) | 8,969,064 | 0 | |||||||||
Unit Corp. (a) (i) | 71,031 | 1,196,872 | |||||||||
Warren Resources, Inc. (Acquired 11/23/2016, Cost $162,924) (a) (f) (i) (m) (u) | 117,785 | 0 | |||||||||
14,404,209 | |||||||||||
Gas Distribution — 0.21% | |||||||||||
Equitrans Midstream Corp. | 275,497 | 2,344,479 | |||||||||
Metals/Mining Excluding Steel — 4.14% | |||||||||||
American Zinc Recycling Corp. (Acquired 07/19/2012 — 12/10/2019, Cost $43,607,058) (a) (f) (i) (m) (o) (u) | 116,127 | 33,125,311 | |||||||||
RA Parent, Inc. (Acquired 12/23/2014 — 01/18/2018, Cost $18,046,222) (a) (f) (i) (m) (o) (u) | 291 | 12,802,524 | |||||||||
45,927,835 | |||||||||||
Oil Field Equipment & Services — 0.75% | |||||||||||
Iracore Investments Holdings, Inc. — Class A (Acquired 04/13/2017, Cost $4,753,500) (f) (i) (m) (o) (u) | 22,361 | 8,318,963 | |||||||||
Total common stocks (Cost $121,831,216) | 70,995,486 | ||||||||||
INVESTMENT COMPANIES — 2.29% | |||||||||||
Exchange Traded Funds — 2.29% | |||||||||||
iShares Broad USD High Yield Corporate Bond ETF | 609,122 | 25,412,570 | |||||||||
Total investment companies (Cost $24,927,132) | 25,412,570 | ||||||||||
Total long-term investments (Cost $1,135,391,412) | 1,095,004,708 |
Principal Amount | Value | ||||||||||
SHORT-TERM INVESTMENTS — 1.79% | |||||||||||
Time Deposits — 1.79% | |||||||||||
Banco Bilbao Vizcaya Argentaria SA, 0.01%, 07/01/2021* | $ | 2,501 | $ | 2,501 | |||||||
Bank of Montreal, 0.01%, 07/01/2021* | 19,831,222 | 19,831,222 | |||||||||
Total short-term investments (Cost $19,833,723) | 19,833,723 | ||||||||||
Total investments — 100.45% (Cost $1,155,225,135) | 1,114,838,431 | ||||||||||
Liabilities in excess of other assets — (0.45)% | (5,009,105 | ) | |||||||||
Net assets — 100.00% | $ | 1,109,829,326 |
(a) — Non-income producing security.
(b) — The coupon rate shown on variable rate securities represents the rate at June 30, 2021.
(c) — All or a portion of this security is segregated for delayed delivery securities and/or unfunded loan commitments.
(d) — Issuer is currently in default on its regularly scheduled interest payments.
(e) — Delayed delivery security.
(f) — Security was fair valued under guidelines established by and under the general supervision and responsibility of the Trust's Board of Trustees. The total market value of these securities was $72,013,272, which represented 6.49% of net assets. See Security Valuation in Note 1 in Notes to the Financial Statements.
(i) — Illiquid security. The total market value of these securities was $83,129,867, which represented 7.49% of net assets.
(m) — Restricted security. Purchased in a private placement transaction; resale to the public may require registration. The total market value of these securities was $150,183,895, which represented 13.53% of net assets.
(o) — Affiliated issuer. See Note 6 in Notes to the Financial Statements.
(p) — Payment in-kind (PIK) security.
(r) — Rule 144A security under the Securities Act of 1933. Purchased in a private placement transaction; resale to the public may require registration or be limited to qualified institutional buyers. The total market value of these securities was $686,802,206, which represented 61.88% of net assets.
(s) — The coupon rate shown on step-up bonds represents the rate at June 30, 2021.
(u) — Value determined using significant unobservable inputs.
LIBOR — London Interbank Offered Rate
USD — United States Dollar
* — Invested through a cash management account administered by Brown Brothers Harriman & Co.
The accompanying notes are an integral part of these financial statements.
51
Statements of Assets & Liabilities
JUNE 30, 2021
Diversified Value Fund | Large Cap Value Fund | Mid-Cap Value Fund | Small Cap Value Fund | Small Cap Diversified Value Fund | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Long-term investments, at value* | |||||||||||||||||||||||
Unaffiliated issuers | $ | 105,359,029 | $ | 461,890,025 | $ | 438,625,155 | $ | 543,841,645 | $ | 430,850,595 | |||||||||||||
Affiliated issuers | — | — | — | 3,415,592 | — | ||||||||||||||||||
Collateral for securities on loan* | — | — | — | 20,827,764 | 2,775,461 | ||||||||||||||||||
Short-term investments* | 3,462,535 | 776,216 | 14,107,000 | 10,968,071 | 13,407,905 | ||||||||||||||||||
Cash | 14 | 12 | 91 | 53 | 57 | ||||||||||||||||||
Cash denominated in foreign currencies# | — | — | 4 | — | — | ||||||||||||||||||
Dividends and interest receivable | 157,204 | 726,667 | 485,436 | 416,567 | 485,192 | ||||||||||||||||||
Receivable for investments sold | — | — | — | 628,017 | — | ||||||||||||||||||
Receivable for Fund shares sold | 9,179 | 348,976 | 375,486 | 1,228,669 | 1,506,845 | ||||||||||||||||||
Other assets | 7,602 | 29,498 | 29,271 | 31,514 | 13,796 | ||||||||||||||||||
Total assets | $ | 108,995,563 | $ | 463,771,394 | $ | 453,622,443 | $ | 581,357,892 | $ | 449,039,851 | |||||||||||||
Liabilities: | |||||||||||||||||||||||
Collateral upon return of securities on loan | $ | — | $ | — | $ | — | $ | 20,827,764 | $ | 2,775,461 | |||||||||||||
Payable for investments purchased | — | — | — | 1,704 | 8,275,628 | ||||||||||||||||||
Payable for Fund shares repurchased | 60,484 | 225,203 | 311,735 | 130,819 | 56,486 | ||||||||||||||||||
Payable to Advisor | 46,932 | 278,016 | 286,447 | 347,791 | 193,040 | ||||||||||||||||||
Accrued distribution and service fees | 48,365 | 206,518 | 180,646 | 65,713 | 4,469 | ||||||||||||||||||
Accrued expenses and other liabilities | 73,773 | 267,704 | 227,291 | 277,379 | 172,971 | ||||||||||||||||||
Total liabilities | 229,554 | 977,441 | 1,006,119 | 21,651,170 | 11,478,055 | ||||||||||||||||||
Commitments and contingencies (Note 8) | |||||||||||||||||||||||
Net assets | $ | 108,766,009 | $ | 462,793,953 | $ | 452,616,324 | $ | 559,706,722 | $ | 437,561,796 | |||||||||||||
Net Assets consist of: | |||||||||||||||||||||||
Paid-in capital | $ | 124,825,774 | $ | 370,886,250 | $ | 700,325,604 | $ | 504,375,442 | $ | 323,269,933 | |||||||||||||
Total accumulated distributable earnings (losses) | $ | (16,059,765 | ) | $ | 91,907,703 | $ | (247,709,280 | ) | $ | 55,331,280 | $ | 114,291,863 | |||||||||||
Net assets | $ | 108,766,009 | $ | 462,793,953 | $ | 452,616,324 | $ | 559,706,722 | $ | 437,561,796 | |||||||||||||
Calculation of Net Asset Value Per Share and Public Offering Price Per Share — Class I | |||||||||||||||||||||||
Net assets | $ | 63,905,865 | $ | 293,317,950 | $ | 302,584,008 | $ | 512,396,101 | $ | 427,708,132 | |||||||||||||
Shares outstanding (unlimited shares $0.001 par value authorized) | 2,546,590 | 6,775,965 | 7,165,662 | 7,471,536 | 30,568,148 | ||||||||||||||||||
Net asset value per share | $ | 25.09 | $ | 43.29 | $ | 42.23 | $ | 68.58 | $ | 13.99 | |||||||||||||
Calculation of Net Asset Value Per Share — Class A | |||||||||||||||||||||||
Net assets | $ | 43,718,773 | $ | 149,051,141 | $ | 118,947,266 | $ | 35,039,185 | $ | 8,667,592 | |||||||||||||
Shares outstanding (unlimited shares $0.001 par value authorized) | 1,736,011 | 3,463,454 | 2,864,527 | 513,495 | 623,080 | ||||||||||||||||||
Net asset value per share | $ | 25.18 | $ | 43.04 | $ | 41.52 | $ | 68.24 | $ | 13.91 | |||||||||||||
Public Offering Price Per Share — Class A | |||||||||||||||||||||||
(Net asset value per share divided by 0.9475) | $ | 26.58 | $ | 45.42 | $ | 43.82 | $ | 72.02 | $ | 14.68 | |||||||||||||
Calculation of Net Asset Value Per Share and Public Offering Price Per Share — Class C | |||||||||||||||||||||||
Net assets | $ | 1,141,371 | $ | 7,466,933 | $ | 8,206,292 | $ | 2,025,923 | |||||||||||||||
Shares outstanding (unlimited shares $0.001 par value authorized) | 45,521 | 175,411 | 229,214 | 37,136 | |||||||||||||||||||
Net asset value per share | $ | 25.07 | $ | 42.57 | $ | 35.80 | $ | 54.55 | |||||||||||||||
Calculation of Net Asset Value Per Share and Public Offering Price Per Share — Class Z | |||||||||||||||||||||||
Net assets | $ | 12,957,929 | $ | 22,878,758 | $ | 10,245,513 | $ | 1,186,072 | |||||||||||||||
Shares outstanding (unlimited shares $0.001 par value authorized) | 299,277 | 541,562 | 149,305 | 84,806 | |||||||||||||||||||
Net asset value per share | $ | 43.30 | $ | 42.25 | $ | 68.62 | $ | 13.99 | |||||||||||||||
*Cost of long-term investments | |||||||||||||||||||||||
Unaffiliated issuers | $ | 86,879,448 | $ | 358,351,106 | $ | 348,925,675 | $ | 428,447,998 | $ | 317,402,729 | |||||||||||||
Affiliated issuers | — | — | — | 21,826,415 | — | ||||||||||||||||||
*Cost of collateral for securities on loan | — | — | — | 20,827,764 | 2,775,461 | ||||||||||||||||||
*Cost of short-term investments | 3,462,535 | 776,216 | 14,047,336 | 10,968,071 | 13,407,905 | ||||||||||||||||||
#Cost of cash denominated in foreign currencies | $ | — | $ | — | $ | 4 | $ | — | $ | — |
The accompanying notes are an integral part of these financial statements.
52
Statements of Assets & Liabilities
JUNE 30, 2021
Global Value Fund | International Value Fund | International Small Cap Diversified Value Fund | Value Opportunities Fund | High Yield Fund | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Long-term investments, at value* | |||||||||||||||||||||||
Unaffiliated issuers | $ | 36,634,117 | $ | 2,564,949 | $ | 6,617,599 | $ | 527,197,485 | $ | 1,035,203,373 | |||||||||||||
Affiliated issuers | — | — | — | 12,061,957 | 59,801,335 | ||||||||||||||||||
Collateral for securities on loan* | — | — | — | 3,886,401 | — | ||||||||||||||||||
Short-term investments* | 728,792 | 10,911 | 78,937 | 3,293,538 | 19,833,723 | ||||||||||||||||||
Cash | 3 | — | — | 30 | 73 | ||||||||||||||||||
Cash denominated in foreign currencies# | — | 817 | — | — | — | ||||||||||||||||||
Cash collateral for futures | — | — | — | 479,457 | — | ||||||||||||||||||
Cash held at broker | — | — | — | 1,500 | — | ||||||||||||||||||
Dividends and interest receivable | 76,724 | 10,868 | 15,236 | 768,780 | 14,708,030 | ||||||||||||||||||
Receivable for investments sold | — | 16,610 | — | 3,931,923 | 4,418,135 | ||||||||||||||||||
Receivable for variation margin | — | — | — | 54,300 | — | ||||||||||||||||||
Receivable for Fund shares sold | 131,960 | — | — | 288,626 | 1,774,488 | ||||||||||||||||||
Receivable from Advisor | — | 3,805 | 10,063 | — | — | ||||||||||||||||||
Other assets | 4,800 | 1,022 | 473 | 18,839 | 42,309 | ||||||||||||||||||
Total assets | $ | 37,576,396 | $ | 2,608,982 | $ | 6,722,308 | $ | 551,982,836 | $ | 1,135,781,466 | |||||||||||||
Liabilities: | |||||||||||||||||||||||
Collateral upon return of securities on loan | $ | — | $ | — | $ | — | $ | 3,886,401 | $ | — | |||||||||||||
Payable for investments purchased | — | 14,000 | — | 751,001 | 22,464,821 | ||||||||||||||||||
Payable for Fund shares repurchased | — | — | — | 2,238,569 | 1,761,119 | ||||||||||||||||||
Payable to Advisor | 17,334 | — | — | 341,583 | 525,352 | ||||||||||||||||||
Accrued distribution and service fees | 2,031 | — | — | 111,909 | 6,998 | ||||||||||||||||||
Distributions payable to shareholders | — | — | — | — | 783,842 | ||||||||||||||||||
Cash overdraft | — | — | 7 | — | — | ||||||||||||||||||
Accrued expenses and other liabilities | 47,954 | 40,969 | 61,374 | 194,980 | 410,008 | ||||||||||||||||||
Total liabilities | 67,319 | 54,969 | 61,381 | 7,524,443 | 25,952,140 | ||||||||||||||||||
Commitments and contingencies (Note 8) | |||||||||||||||||||||||
Net assets | $ | 37,509,077 | $ | 2,554,013 | $ | 6,660,927 | $ | 544,458,393 | $ | 1,109,829,326 | |||||||||||||
Net Assets consist of: | |||||||||||||||||||||||
Paid-in capital | $ | 31,382,175 | $ | 2,158,143 | $ | 4,515,245 | $ | 437,826,259 | $ | 1,469,804,647 | |||||||||||||
Total accumulated distributable earnings (losses) | $ | 6,126,902 | $ | 395,870 | $ | 2,145,682 | $ | 106,632,134 | $ | (359,975,321 | ) | ||||||||||||
Net assets | $ | 37,509,077 | $ | 2,554,013 | $ | 6,660,927 | $ | 544,458,393 | $ | 1,109,829,326 | |||||||||||||
Calculation of Net Asset Value Per Share and Public Offering Price Per Share — Class I | |||||||||||||||||||||||
Net assets | $ | 36,024,654 | $ | 2,554,013 | $ | 6,660,927 | $ | 390,240,569 | $ | 857,715,469 | |||||||||||||
Shares outstanding (unlimited shares $0.001 par value authorized) | 2,495,082 | 219,016 | 449,211 | 10,427,335 | 74,079,920 | ||||||||||||||||||
Net asset value per share | $ | 14.44 | $ | 11.66 | $ | 14.83 | $ | 37.42 | $ | 11.58 | |||||||||||||
Calculation of Net Asset Value Per Share — Class A | |||||||||||||||||||||||
Net assets | $ | 1,484,423 | $ | 83,243,289 | $ | 39,311,563 | |||||||||||||||||
Shares outstanding (unlimited shares $0.001 par value authorized) | 102,873 | 2,224,067 | 3,425,645 | ||||||||||||||||||||
Net asset value per share | $ | 14.43 | $ | 37.43 | $ | 11.48 | |||||||||||||||||
Public Offering Price Per Share — Class A | |||||||||||||||||||||||
(Net asset value per share divided by 0.9475) | $ | 15.23 | $ | 39.50 | |||||||||||||||||||
(Net asset value per share divided by 0.9625) | $ | 11.93 | |||||||||||||||||||||
Calculation of Net Asset Value Per Share and Public Offering Price Per Share — Class C | |||||||||||||||||||||||
Net assets | $ | 27,088,862 | $ | 1,768,790 | |||||||||||||||||||
Shares outstanding (unlimited shares $0.001 par value authorized) | 789,598 | 152,897 | |||||||||||||||||||||
Net asset value per share | $ | 34.31 | $ | 11.57 | |||||||||||||||||||
Calculation of Net Asset Value Per Share and Public Offering Price Per Share — Class Z | |||||||||||||||||||||||
Net assets | $ | 43,885,673 | $ | 211,033,504 | |||||||||||||||||||
Shares outstanding (unlimited shares $0.001 par value authorized) | 1,172,615 | 18,227,851 | |||||||||||||||||||||
Net asset value per share | $ | 37.43 | $ | 11.58 | |||||||||||||||||||
*Cost of long-term investments | |||||||||||||||||||||||
Unaffiliated issuers | $ | 28,582,841 | $ | 2,075,263 | $ | 5,545,052 | $ | 450,363,424 | $ | 1,031,876,704 | |||||||||||||
Affiliated issuers | — | — | — | 6,892,250 | 103,514,708 | ||||||||||||||||||
*Cost of collateral for securities on loan | — | — | — | 3,886,401 | — | ||||||||||||||||||
*Cost of short-term investments | 728,792 | 10,911 | 78,937 | 3,293,538 | 19,833,723 | ||||||||||||||||||
#Cost of cash denominated in foreign currencies | $ | — | $ | 821 | $ | — | $ | — | $ | — |
The accompanying notes are an integral part of these financial statements.
53
Statements of Operations
FOR THE YEAR ENDED JUNE 30, 2021
Diversified Value Fund | Large Cap Value Fund | Mid-Cap Value Fund | Small Cap Value Fund | Small Cap Diversified Value Fund | |||||||||||||||||||
Investment income: | |||||||||||||||||||||||
Dividends* | |||||||||||||||||||||||
Unaffiliated issuers | $ | 1,780,741 | $ | 9,021,212 | $ | 9,409,414 | $ | 6,826,637 | $ | 5,513,562 | |||||||||||||
Interest | 74 | 236 | 548 | 476 | 469 | ||||||||||||||||||
Securities on loan, net | 2,798 | 13,812 | 5,254 | 199,884 | 8,018 | ||||||||||||||||||
Total income | 1,783,613 | 9,035,260 | 9,415,216 | 7,026,997 | 5,522,049 | ||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Advisory fees | 610,303 | 2,950,275 | 2,762,458 | 3,484,491 | 1,789,416 | ||||||||||||||||||
Professional fees and expenses | 21,973 | 46,513 | 42,855 | 68,492 | 35,551 | ||||||||||||||||||
Custodian fees and expenses | 6,821 | 15,207 | 18,276 | 18,094 | 16,274 | ||||||||||||||||||
Transfer agent fees and expenses | 104,715 | 643,586 | 578,713 | 927,925 | 298,168 | ||||||||||||||||||
Accounting fees and expenses | 25,843 | 49,596 | 44,539 | 54,606 | 43,706 | ||||||||||||||||||
Administration fees and expenses | 42,718 | 148,635 | 131,288 | 161,903 | 105,033 | ||||||||||||||||||
Compliance fees | 159 | 692 | 666 | 808 | 607 | ||||||||||||||||||
Trustees' fees and expenses | 10,206 | 51,334 | 43,213 | 54,738 | 28,706 | ||||||||||||||||||
Reports to shareholders | 5,379 | 17,008 | 26,633 | 45,429 | 9,597 | ||||||||||||||||||
Registration fees | 46,150 | 78,443 | 69,225 | 78,377 | 61,894 | ||||||||||||||||||
Distribution and service fees — Class A | 80,922 | 333,821 | 240,012 | 78,000 | 8,139 | ||||||||||||||||||
Distribution and service fees — Class C | 11,433 | 65,557 | 79,147 | 26,526 | — | ||||||||||||||||||
Other expenses | 12,342 | 41,519 | 17,449 | 48,205 | 20,292 | ||||||||||||||||||
Total expenses | 978,964 | 4,442,186 | 4,054,474 | 5,047,594 | 2,417,383 | ||||||||||||||||||
Fee waiver/expense reimbursement by Advisor (Note 2) | (189,118 | ) | (74,315 | ) | — | — | (207,113 | ) | |||||||||||||||
Net expenses | 789,846 | 4,367,871 | 4,054,474 | 5,047,594 | 2,210,270 | ||||||||||||||||||
Net investment income | 993,767 | 4,667,389 | 5,360,742 | 1,979,403 | 3,311,779 | ||||||||||||||||||
Realized and Unrealized Gains (Losses): | |||||||||||||||||||||||
Net realized gains (losses) from: | |||||||||||||||||||||||
Sales of unaffiliated issuers | 1,876,760 | 9,996,319 | 42,561,787 | 70,086,770 | 12,693,177 | ||||||||||||||||||
Sales of affiliated issuers | — | — | — | (1,862,838 | ) | — | |||||||||||||||||
Foreign currency transactions | (93 | ) | (473 | ) | 30,405 | 3,733 | — | ||||||||||||||||
Net realized gains | 1,876,667 | 9,995,846 | 42,592,192 | 68,227,665 | 12,693,177 | ||||||||||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||||||||||
Securities of unaffiliated issuers and foreign currency translations | 40,296,325 | 188,924,665 | 182,855,325 | 193,337,546 | 131,129,477 | ||||||||||||||||||
Securities of affiliated issuers | — | — | — | 3,652,235 | — | ||||||||||||||||||
Net change in unrealized appreciation/depreciation | 40,296,325 | 188,924,665 | 182,855,325 | 196,989,781 | 131,129,477 | ||||||||||||||||||
Net gains | 42,172,992 | 198,920,511 | 225,447,517 | 265,217,446 | 143,822,654 | ||||||||||||||||||
Net Increase in Net Assets Resulting from Operations | $ | 43,166,759 | $ | 203,587,900 | $ | 230,808,259 | $ | 267,196,849 | $ | 147,134,433 | |||||||||||||
*Net of Foreign Taxes Withheld | $ | 23,013 | $ | 129,553 | $ | 89,503 | $ | 49,715 | $ | 11,385 |
The accompanying notes are an integral part of these financial statements.
54
Statements of Operations
FOR THE YEAR ENDED JUNE 30, 2021
Global Value Fund | International Value Fund | International Small Cap Diversified Value Fund | Value Opportunities Fund | High Yield Fund | |||||||||||||||||||
Investment income: | |||||||||||||||||||||||
Dividends* | |||||||||||||||||||||||
Unaffiliated issuers | $ | 554,544 | $ | 61,423 | $ | 163,087 | $ | 6,976,958 | $ | 1,172,796 | |||||||||||||
Affiliated issuers | — | — | — | 770,959 | 531,720 | ||||||||||||||||||
Interest | 1,141 | 139 | — | 5,011,798 | 73,781,450 | ||||||||||||||||||
Securities on loan, net | — | — | — | 98,050 | — | ||||||||||||||||||
Total income | 555,685 | 61,562 | 163,087 | 12,857,765 | 75,485,966 | ||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Advisory fees | 233,878 | 19,639 | 44,963 | 3,640,484 | 6,838,127 | ||||||||||||||||||
Professional fees and expenses | 16,761 | 13,139 | 28,527 | 55,665 | 111,469 | ||||||||||||||||||
Custodian fees and expenses | 7,052 | 9,434 | 38,131 | 28,811 | 56,095 | ||||||||||||||||||
Transfer agent fees and expenses | 31,291 | 260 | 382 | 442,254 | 1,025,041 | ||||||||||||||||||
Accounting fees and expenses | 28,162 | 32,180 | 66,150 | 56,837 | 166,254 | ||||||||||||||||||
Administration fees and expenses | 40,243 | 40,265 | 44,015 | 166,344 | 403,967 | ||||||||||||||||||
Compliance fees | 56 | 4 | 10 | 800 | 1,597 | ||||||||||||||||||
Trustees' fees and expenses | 3,683 | 288 | 523 | 62,445 | 166,363 | ||||||||||||||||||
Reports to shareholders | 2,975 | 2,235 | 7,840 | 13,367 | 7,989 | ||||||||||||||||||
Registration fees | 31,431 | 4,334 | 4,548 | 71,079 | 113,758 | ||||||||||||||||||
Distribution and service fees — Class A | 1,862 | — | — | 205,850 | 98,793 | ||||||||||||||||||
Distribution and service fees — Class C | — | — | — | 262,542 | 22,246 | ||||||||||||||||||
Other expenses | 7,329 | 4,181 | 4,976 | 51,728 | 148,458 | ||||||||||||||||||
Total expenses | 404,723 | 125,959 | 240,065 | 5,058,206 | 9,160,157 | ||||||||||||||||||
Fee waiver/expense reimbursement by Advisor (Note 2) | (106,494 | ) | (102,632 | ) | (184,341 | ) | — | (664,017 | ) | ||||||||||||||
Net expenses | 298,229 | 23,327 | 55,724 | 5,058,206 | 8,496,140 | ||||||||||||||||||
Net investment income | 257,456 | 38,235 | 107,363 | 7,799,559 | 66,989,826 | ||||||||||||||||||
Realized and Unrealized Gains (Losses): | |||||||||||||||||||||||
Net realized gains (losses) from: | |||||||||||||||||||||||
Sales of unaffiliated issuers | 2,379,593 | 112,381 | 1,090,401 | 84,926,372 | (84,750,323 | ) | |||||||||||||||||
Sales of affiliated issuers | — | — | — | 3,161,898 | 459,948 | ||||||||||||||||||
Foreign currency transactions | (4,669 | ) | (315 | ) | (4,215 | ) | (36,635 | ) | 26 | ||||||||||||||
Futures contracts | — | — | — | (238,570 | ) | — | |||||||||||||||||
Net realized gains (losses) | 2,374,924 | 112,066 | 1,086,186 | 87,813,065 | (84,290,349 | ) | |||||||||||||||||
Net change in unrealized appreciation/depreciation of: | |||||||||||||||||||||||
Securities of unaffiliated issuers and foreign currency translations | 12,022,169 | 910,487 | 1,072,378 | 136,762,145 | 229,706,338 | ||||||||||||||||||
Securities of affiliated issuers | — | — | — | 224,062 | 18,083,842 | ||||||||||||||||||
Futures contracts | — | — | — | 403,023 | — | ||||||||||||||||||
Net change in unrealized appreciation/depreciation | 12,022,169 | 910,487 | 1,072,378 | 137,389,230 | 247,790,180 | ||||||||||||||||||
Net gains | 14,397,093 | 1,022,553 | 2,158,564 | 225,202,295 | 163,499,831 | ||||||||||||||||||
Net Increase in Net Assets Resulting from Operations | $ | 14,654,549 | $ | 1,060,788 | $ | 2,265,927 | $ | 233,001,854 | $ | 230,489,657 | |||||||||||||
*Net of Foreign Taxes Withheld | $ | 27,418 | $ | 4,452 | $ | 21,305 | $ | 47,498 | $ | 51,483 |
The accompanying notes are an integral part of these financial statements.
55
Statements of Changes in Net Assets
Diversified Value Fund | Large Cap Value Fund | ||||||||||||||||||
Year ended June 30, 2021 | Year ended June 30, 2020 | Year ended June 30, 2021 | Year ended June 30, 2020 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income | $ | 993,767 | $ | 1,525,760 | $ | 4,667,389 | $ | 7,463,753 | |||||||||||
Net realized gains (losses) | 1,876,667 | (7,393,230 | ) | 9,995,846 | (19,466,068 | ) | |||||||||||||
Net change in unrealized appreciation/depreciation | 40,296,325 | (10,493,413 | ) | 188,924,665 | (66,515,057 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 43,166,759 | (16,360,883 | ) | 203,587,900 | (78,517,372 | ) | |||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Class I | (992,196 | ) | (1,144,319 | ) | (4,266,621 | ) | (6,189,225 | ) | |||||||||||
Class A | (525,542 | ) | (560,184 | ) | (2,063,556 | ) | (1,587,986 | ) | |||||||||||
Class C | (8,023 | ) | (11,349 | ) | (18,447 | ) | (89,931 | ) | |||||||||||
Class Z | — | — | (156,287 | ) | (901 | ) | |||||||||||||
Net decrease in net assets resulting from dividends and distributions to shareholders | (1,525,761 | ) | (1,715,852 | ) | (6,504,911 | ) | (7,868,043 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Net decrease in net assets resulting from capital share transactions | (5,288,401 | ) | (10,790,629 | ) | (121,846,115 | ) | (19,761,126 | ) | |||||||||||
Net Assets: | |||||||||||||||||||
Total increase (decrease) in net assets | 36,352,597 | (28,867,364 | ) | 75,236,874 | (106,146,541 | ) | |||||||||||||
Beginning of year | 72,413,412 | 101,280,776 | 387,557,079 | 493,703,620 | |||||||||||||||
End of year | $ | 108,766,009 | $ | 72,413,412 | $ | 462,793,953 | $ | 387,557,079 |
The accompanying notes are an integral part of these financial statements.
56
Statements of Changes in Net Assets
Mid-Cap Value Fund | Small Cap Value Fund | ||||||||||||||||||
Year ended June 30, 2021 | Year ended June 30, 2020 | Year ended June 30, 2021 | Year ended June 30, 2020 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income | $ | 5,360,742 | $ | 13,140,311 | $ | 1,979,403 | $ | 5,541,486 | |||||||||||
Net realized gains (losses) | 42,592,192 | (322,585,196 | ) | 68,227,665 | (100,020,249 | ) | |||||||||||||
Net change in unrealized appreciation/depreciation | 182,855,325 | 21,012,686 | 196,989,781 | (80,544,425 | ) | ||||||||||||||
Net increase (decrease) in net assets resulting from operations | 230,808,259 | (288,432,199 | ) | 267,196,849 | (175,023,188 | ) | |||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Class I | (5,186,501 | ) | (13,255,008 | ) | (3,423,111 | ) | (31,165,371 | ) | |||||||||||
Class A | (2,090,006 | ) | (1,554,115 | ) | (203,554 | ) | (1,811,115 | ) | |||||||||||
Class C | (162,167 | ) | (28,184 | ) | (5,353 | ) | (300,174 | ) | |||||||||||
Class Z | (489,503 | ) | (908 | ) | (86,524 | ) | (2,581 | ) | |||||||||||
Net decrease in net assets resulting from dividends and distributions to shareholders | (7,928,177 | ) | (14,838,215 | ) | (3,718,542 | ) | (33,279,241 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Net decrease in net assets resulting from capital share transactions | (69,449,403 | ) | (630,013,614 | ) | (74,946,971 | ) | (142,649,209 | ) | |||||||||||
Net Assets: | |||||||||||||||||||
Total increase (decrease) in net assets | 153,430,679 | (933,284,028 | ) | 188,531,336 | (350,951,638 | ) | |||||||||||||
Beginning of year | 299,185,645 | 1,232,469,673 | 371,175,386 | 722,127,024 | |||||||||||||||
End of year | $ | 452,616,324 | $ | 299,185,645 | $ | 559,706,722 | $ | 371,175,386 |
The accompanying notes are an integral part of these financial statements.
57
Statements of Changes in Net Assets
Small Cap Diversified Value Fund | Global Value Fund | ||||||||||||||||||
Year ended June 30, 2021 | Year ended June 30, 2020 | Year ended June 30, 2021 | Year ended June 30, 2020 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income | $ | 3,311,779 | $ | 1,589,242 | $ | 257,456 | $ | 450,726 | |||||||||||
Net realized gains (losses) | 12,693,177 | (10,363,229 | ) | 2,374,924 | (4,410,821 | ) | |||||||||||||
Net change in unrealized appreciation/depreciation | 131,129,477 | (17,425,824 | ) | 12,022,169 | (4,124,269 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 147,134,433 | (26,199,811 | ) | 14,654,549 | (8,084,364 | ) | |||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Class I | (2,363,036 | ) | (1,088,093 | ) | (444,350 | ) | (1,021,238 | ) | |||||||||||
Class A | (18,884 | ) | (15,269 | ) | (2,722 | ) | (4,267 | ) | |||||||||||
Class Z | (6,779 | ) | (478 | ) | — | — | |||||||||||||
Net decrease in net assets resulting from dividends and distributions to shareholders | (2,388,699 | ) | (1,103,840 | ) | (447,072 | ) | (1,025,505 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions | 147,825,977 | 74,013,978 | (2,014,373 | ) | (5,560,990 | ) | |||||||||||||
Net Assets: | |||||||||||||||||||
Total increase (decrease) in net assets | 292,571,711 | 46,710,327 | 12,193,104 | (14,670,859 | ) | ||||||||||||||
Beginning of year | 144,990,085 | 98,279,758 | 25,315,973 | 39,986,832 | |||||||||||||||
End of year | $ | 437,561,796 | $ | 144,990,085 | $ | 37,509,077 | $ | 25,315,973 |
The accompanying notes are an integral part of these financial statements.
58
Statements of Changes in Net Assets
International Value Fund | International Small Cap Diversified Value Fund | ||||||||||||||
Year ended June 30, 2021 | Year ended June 30, 2020 | Period ended June 30, 2021+ | |||||||||||||
Operations: | |||||||||||||||
Net investment income | $ | 38,235 | $ | 30,524 | $ | 107,363 | |||||||||
Net realized gains (losses) | 112,066 | (228,595 | ) | 1,086,186 | |||||||||||
Net change in unrealized appreciation/depreciation | 910,487 | (261,759 | ) | 1,072,378 | |||||||||||
Net increase (decrease) in net assets resulting from operations | 1,060,788 | (459,830 | ) | 2,265,927 | |||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||
Class I | (30,073 | ) | (83,874 | ) | (120,245 | ) | |||||||||
Net decrease in net assets resulting from dividends and distributions to shareholders | (30,073 | ) | (83,874 | ) | (120,245 | ) | |||||||||
Capital Share Transactions: | |||||||||||||||
Net increase (decrease) in net assets resulting from capital share transactions | (350,564 | ) | 83,874 | 4,515,245 | |||||||||||
Net Assets: | |||||||||||||||
Total increase (decrease) in net assets | 680,151 | (459,830 | ) | 6,660,927 | |||||||||||
Beginning of year | 1,873,862 | 2,333,692 | — | ||||||||||||
End of year | $ | 2,554,013 | $ | 1,873,862 | $ | 6,660,927 |
+ The Fund commenced operations on June 30, 2020.
The accompanying notes are an integral part of these financial statements.
59
Statements of Changes in Net Assets
Value Opportunities Fund | High Yield Fund | ||||||||||||||||||
Year ended June 30, 2021 | Year ended June 30, 2020 | Year ended June 30, 2021 | Year ended June 30, 2020 | ||||||||||||||||
Operations: | |||||||||||||||||||
Net investment income | $ | 7,799,559 | $ | 12,179,111 | $ | 66,989,826 | $ | 128,529,027 | |||||||||||
Net realized gains (losses) | 87,813,065 | (68,430,763 | ) | (84,290,349 | ) | (106,304,119 | ) | ||||||||||||
Net change in unrealized appreciation/depreciation | 137,389,230 | (86,638,575 | ) | 247,790,180 | (190,006,179 | ) | |||||||||||||
Net increase (decrease) in net assets resulting from operations | 233,001,854 | (142,890,227 | ) | 230,489,657 | (167,781,271 | ) | |||||||||||||
Dividends and Distributions to Shareholders: | |||||||||||||||||||
Class I | (7,100,606 | ) | (13,690,904 | ) | (45,766,603 | ) | (84,676,251 | ) | |||||||||||
Class A | (1,983,365 | ) | (2,494,397 | ) | (1,971,546 | ) | (9,009,055 | ) | |||||||||||
Class C | (577,064 | ) | (667,331 | ) | (95,373 | ) | (154,822 | ) | |||||||||||
Class Z | (924,361 | ) | (488,111 | ) | (17,732,127 | ) | (34,634,528 | ) | |||||||||||
Net decrease in net assets resulting from dividends and distributions to shareholders | (10,585,396 | ) | (17,340,743 | ) | (65,565,649 | ) | (128,474,656 | ) | |||||||||||
Capital Share Transactions: | |||||||||||||||||||
Net decrease in net assets resulting from capital share transactions | (194,829,898 | ) | (89,065,454 | ) | (603,574,274 | ) | (689,280,984 | ) | |||||||||||
Net Assets: | |||||||||||||||||||
Total increase (decrease) in net assets | 27,586,560 | (249,296,424 | ) | (438,650,266 | ) | (985,536,911 | ) | ||||||||||||
Beginning of year | 516,871,833 | 766,168,257 | 1,548,479,592 | 2,534,016,503 | |||||||||||||||
End of year | $ | 544,458,393 | $ | 516,871,833 | $ | 1,109,829,326 | $ | 1,548,479,592 |
The accompanying notes are an integral part of these financial statements.
60
Financial Highlights
The following per share data and ratios have been derived from information provided in the financial statements.
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Diversified Value Fund | Net asset value, beginning of year | Net investment income1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of year | Total return2 | Net assets, end of year (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 15.31 | $ | 0.25 | $ | 9.92 | $ | 10.17 | $ | (0.39 | ) | $ | — | $ | (0.39 | ) | $ | 25.09 | 67.14 | % | $ | 63,906 | 0.80 | % | 1.03 | % | 1.24 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 18.90 | 0.32 | (3.54 | ) | (3.22 | ) | (0.37 | ) | — | (0.37 | ) | 15.31 | –17.51 | 46,372 | 0.80 | 1.04 | 1.83 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 18.80 | 0.30 | 0.06 | 0.36 | (0.26 | ) | — | (0.26 | ) | 18.90 | 2.08 | 63,333 | 0.83 | 0.99 | 1.65 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 17.43 | 0.23 | 1.48 | 1.71 | (0.34 | ) | — | (0.34 | ) | 18.80 | 9.81 | 65,503 | 0.95 | 1.02 | 1.25 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 14.31 | 0.19 | 3.77 | 3.96 | (0.84 | ) | — | (0.84 | ) | 17.43 | 28.05 | 68,260 | 0.95 | 1.09 | 1.21 | ||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 15.36 | 0.20 | 9.96 | 10.16 | (0.34 | ) | — | (0.34 | ) | 25.18 | 66.74 | 43,719 | 1.05 | 1.24 | 1.00 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 18.95 | 0.28 | (3.56 | ) | (3.28 | ) | (0.31 | ) | — | (0.31 | ) | 15.36 | –17.68 | 24,972 | 1.05 | 1.25 | 1.57 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 18.85 | 0.26 | 0.05 | 0.31 | (0.21 | ) | — | (0.21 | ) | 18.95 | 1.78 | 35,807 | 1.08 | 1.24 | 1.39 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 17.47 | 0.19 | 1.49 | 1.68 | (0.30 | ) | — | (0.30 | ) | 18.85 | 9.57 | 39,616 | 1.20 | 1.27 | 1.00 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 14.36 | 0.16 | 3.77 | 3.93 | (0.82 | ) | — | (0.82 | ) | 17.47 | 27.71 | 41,084 | 1.20 | 1.34 | 1.00 | ||||||||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 15.24 | 0.05 | 9.91 | 9.96 | (0.13 | ) | — | (0.13 | ) | 25.07 | 65.57 | 1,141 | 1.80 | 1.97 | 0.25 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 18.77 | 0.14 | (3.55 | ) | (3.41 | ) | (0.12 | ) | — | (0.12 | ) | 15.24 | –18.33 | 1,069 | 1.80 | 1.98 | 0.80 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 18.64 | 0.12 | 0.06 | 0.18 | (0.05 | ) | — | (0.05 | ) | 18.77 | 0.98 | 2,141 | 1.83 | 1.99 | 0.64 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 17.27 | 0.04 | 1.48 | 1.52 | (0.15 | ) | — | (0.15 | ) | 18.64 | 8.77 | 2,598 | 1.95 | 2.02 | 0.25 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 14.23 | 0.04 | 3.73 | 3.77 | (0.73 | ) | — | (0.73 | ) | 17.27 | 26.78 | 2,817 | 1.95 | 2.09 | 0.23 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 32 | % | 28 | % | 26 | % | 28 | % | 25 | % |
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Large Cap Value Fund | Net asset value, beginning of period | Net investment income1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of period | Total return2 | Net assets, end of period (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 26.81 | $ | 0.41 | $ | 16.64 | $ | 17.05 | $ | (0.57 | ) | $ | — | $ | (0.57 | ) | $ | 43.29 | 64.20 | % | $ | 293,318 | 0.95 | % | 0.98 | % | 1.19 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 33.29 | 0.53 | (6.44 | ) | (5.91 | ) | (0.57 | ) | — | (0.57 | ) | 26.81 | –18.18 | 257,544 | 0.95 | 0.95 | 1.72 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 33.57 | 0.51 | 0.19 | 0.70 | (0.64 | ) | (0.34 | ) | (0.98 | ) | 33.29 | 2.51 | 357,191 | 0.95 | 0.95 | 1.56 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 31.04 | 0.42 | 2.67 | 3.09 | (0.56 | ) | — | (0.56 | ) | 33.57 | 10.01 | 276,930 | 1.00 | 1.00 | 1.28 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 25.06 | 0.39 | 6.15 | 6.54 | (0.56 | ) | — | (0.56 | ) | 31.04 | 26.22 | 269,714 | 0.99 | 0.99 | 1.38 | ||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 26.67 | 0.33 | 16.56 | 16.89 | (0.52 | ) | — | (0.52 | ) | 43.04 | 63.82 | 149,051 | 1.18 | 1.18 | 0.96 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 33.14 | 0.46 | (6.45 | ) | (5.99 | ) | (0.48 | ) | — | (0.48 | ) | 26.67 | –18.42 | 113,504 | 1.20 | 1.20 | 1.49 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 33.36 | 0.41 | 0.22 | 0.63 | (0.51 | ) | (0.34 | ) | (0.85 | ) | 33.14 | 2.24 | 116,354 | 1.20 | 1.20 | 1.26 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 30.85 | 0.34 | 2.65 | 2.99 | (0.48 | ) | — | (0.48 | ) | 33.36 | 9.72 | 131,276 | 1.25 | 1.25 | 1.03 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 24.91 | 0.32 | 6.10 | 6.42 | (0.48 | ) | — | (0.48 | ) | 30.85 | 25.88 | 135,349 | 1.24 | 1.24 | 1.13 | ||||||||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 26.26 | 0.05 | 16.36 | 16.41 | (0.10 | ) | — | (0.10 | ) | 42.57 | 62.60 | 7,467 | 1.92 | 1.92 | 0.16 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 32.59 | 0.24 | (6.36 | ) | (6.12 | ) | (0.21 | ) | — | (0.21 | ) | 26.26 | –18.93 | 9,567 | 1.88 | 1.88 | 0.78 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 32.68 | 0.17 | 0.25 | 0.42 | (0.17 | ) | (0.34 | ) | (0.51 | ) | 32.59 | 1.49 | 14,948 | 1.95 | 1.95 | 0.55 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 30.16 | 0.08 | 2.61 | 2.69 | (0.17 | ) | — | (0.17 | ) | 32.68 | 8.92 | 14,161 | 2.00 | 2.00 | 0.26 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 24.29 | 0.10 | 5.94 | 6.04 | (0.17 | ) | — | (0.17 | ) | 30.16 | 24.92 | 17,250 | 1.99 | 1.99 | 0.38 | ||||||||||||||||||||||||||||||||||||||||
Class Z | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 26.82 | 0.47 | 16.63 | 17.10 | (0.62 | ) | — | (0.62 | ) | 43.30 | 64.34 | 12,958 | 0.84 | 0.84 | 1.33 | ||||||||||||||||||||||||||||||||||||||||
Period from 9/30/20193 to 6/30/2020 | 33.12 | 0.49 | (6.19 | ) | (5.70 | ) | (0.60 | ) | — | (0.60 | ) | 26.82 | –17.65 | 6,943 | 0.834 | 0.834 | 2.374 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 25 | % | 29 | % | 23 | % | 41 | % | 27 | % |
1 Net investment income per share has been calculated based on average shares outstanding during the period.
2 Total returns exclude the effects of sales charges. The Fund's investment advisor may have waived a portion of its advisory fee and/or reimbursed a portion of the Fund's expenses. Without such waiver and/or reimbursement, the Fund's performance would have been lower. Returns for periods less than one year are not annualized.
3 Commencement of operations.
4 Annualized.
The accompanying notes are an integral part of these financial statements.
61
Financial Highlights
The following per share data and ratios have been derived from information provided in the financial statements.
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Mid-Cap Value Fund | Net asset value, beginning of period | Net investment income (loss)1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of period | Total return2 | Net assets, end of period (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income (loss) | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 22.27 | $ | 0.48 | $ | 20.20 | $ | 20.68 | $ | (0.72 | ) | $ | — | $ | (0.72 | ) | $ | 42.23 | 93.96 | % | $ | 302,584 | 1.04 | % | 1.04 | % | 1.50 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 33.10 | 0.51 | (10.82 | ) | (10.31 | ) | (0.52 | ) | — | (0.52 | ) | 22.27 | –31.62 | 202,902 | 1.04 | 1.04 | 1.73 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 39.68 | 0.24 | (5.94 | ) | (5.70 | ) | (0.33 | ) | (0.55 | ) | (0.88 | ) | 33.10 | –14.29 | 1,044,280 | 1.00 | 1.00 | 0.67 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 37.13 | 0.11 | 4.96 | 5.07 | (0.15 | ) | (2.37 | ) | (2.52 | ) | 39.68 | 14.32 | 1,609,002 | 0.99 | 0.99 | 0.28 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 30.55 | 0.10 | 7.05 | 7.15 | (0.11 | ) | (0.46 | ) | (0.57 | ) | 37.13 | 23.37 | 1,675,920 | 1.03 | 1.03 | 0.28 | |||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 21.93 | 0.43 | 19.87 | 20.30 | (0.71 | ) | — | (0.71 | ) | 41.52 | 93.63 | 118,947 | 1.23 | 1.23 | 1.35 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 32.53 | 0.43 | (10.65 | ) | (10.22 | ) | (0.38 | ) | — | (0.38 | ) | 21.93 | –31.78 | 71,919 | 1.22 | 1.22 | 1.56 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 39.03 | 0.15 | (5.82 | ) | (5.67 | ) | (0.28 | ) | (0.55 | ) | (0.83 | ) | 32.53 | –14.48 | 159,676 | 1.25 | 1.25 | 0.43 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 36.57 | 0.01 | 4.88 | 4.89 | (0.06 | ) | (2.37 | ) | (2.43 | ) | 39.03 | 14.05 | 230,105 | 1.24 | 1.24 | 0.03 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 30.13 | 0.01 | 6.96 | 6.97 | (0.07 | ) | (0.46 | ) | (0.53 | ) | 36.57 | 23.05 | 274,787 | 1.28 | 1.28 | 0.02 | |||||||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 19.01 | 0.15 | 17.19 | 17.34 | (0.55 | ) | — | (0.55 | ) | 35.80 | 92.13 | 8,206 | 2.01 | 2.01 | 0.57 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 28.12 | 0.20 | (9.27 | ) | (9.07 | ) | (0.04 | ) | — | (0.04 | ) | 19.01 | –32.29 | 8,389 | 1.96 | 1.96 | 0.82 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 33.93 | (0.10 | ) | (5.05 | ) | (5.15 | ) | (0.11 | ) | (0.55 | ) | (0.66 | ) | 28.12 | –15.15 | 24,447 | 2.00 | 2.00 | (0.33 | ) | |||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 32.26 | (0.24 | ) | 4.28 | 4.04 | — | (2.37 | ) | (2.37 | ) | 33.93 | 13.20 | 39,383 | 1.99 | 1.99 | (0.72 | ) | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 26.78 | (0.23 | ) | 6.17 | 5.94 | — | (0.46 | ) | (0.46 | ) | 32.26 | 22.13 | 50,612 | 2.03 | 2.03 | (0.74 | ) | ||||||||||||||||||||||||||||||||||||||
Class Z | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 22.26 | 0.56 | 20.19 | 20.75 | (0.76 | ) | — | (0.76 | ) | 42.25 | 94.35 | 22,879 | 0.88 | 0.88 | 1.75 | ||||||||||||||||||||||||||||||||||||||||
Period from 9/30/20193 to 6/30/2020 | 30.67 | 0.40 | (8.25 | ) | (7.85 | ) | (0.56 | ) | — | (0.56 | ) | 22.26 | –26.16 | 15,976 | 0.894 | 0.894 | 2.124 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 37 | % | 27 | % | 34 | % | 32 | % | 37 | % |
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Small Cap Value Fund | Net asset value, beginning of period | Net investment income (loss)1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of period | Total return2 | Net assets, end of period (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income (loss) | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 38.22 | $ | 0.23 | $ | 30.56 | $ | 30.79 | $ | (0.43 | ) | $ | — | $ | (0.43 | ) | $ | 68.58 | 80.88 | % | $ | 512,396 | 1.07 | % | 1.07 | % | 0.44 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 53.27 | 0.45 | (12.86 | ) | (12.41 | ) | (0.48 | ) | (2.16 | ) | (2.64 | ) | 38.22 | –24.70 | 335,080 | 1.05 | 1.05 | 0.94 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 63.89 | 0.35 | (6.34 | ) | (5.99 | ) | (0.33 | ) | (4.30 | ) | (4.63 | ) | 53.27 | –8.97 | 670,391 | 1.03 | 1.03 | 0.61 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 59.31 | 0.29 | 7.35 | 7.64 | (0.28 | ) | (2.78 | ) | (3.06 | ) | 63.89 | 13.33 | 715,194 | 1.02 | 1.02 | 0.47 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 46.46 | 0.19 | 12.90 | 13.09 | (0.24 | ) | — | (0.24 | ) | 59.31 | 28.15 | 669,810 | 1.04 | 1.04 | 0.35 | ||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 38.03 | 0.14 | 30.41 | 30.55 | (0.34 | ) | — | (0.34 | ) | 68.24 | 80.58 | 35,039 | 1.25 | 1.25 | 0.27 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 52.98 | 0.36 | (12.83 | ) | (12.47 | ) | (0.32 | ) | (2.16 | ) | (2.48 | ) | 38.03 | –24.86 | 26,028 | 1.25 | 1.25 | 0.76 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 63.49 | 0.18 | (6.26 | ) | (6.08 | ) | (0.13 | ) | (4.30 | ) | (4.43 | ) | 52.98 | –9.20 | 44,240 | 1.28 | 1.28 | 0.32 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 58.93 | 0.12 | 7.32 | 7.44 | (0.10 | ) | (2.78 | ) | (2.88 | ) | 63.49 | 13.05 | 70,928 | 1.27 | 1.27 | 0.20 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 46.09 | 0.05 | 12.79 | 12.84 | — | — | — | 58.93 | 27.83 | 89,795 | 1.29 | 1.29 | 0.09 | ||||||||||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 30.49 | (0.19 | ) | 24.33 | 24.14 | (0.08 | ) | — | (0.08 | ) | 54.55 | 79.25 | 2,026 | 1.99 | 1.99 | (0.46 | ) | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 42.94 | 0.02 | (10.31 | ) | (10.29 | ) | — | (2.16 | ) | (2.16 | ) | 30.49 | –25.40 | 3,528 | 1.95 | 1.95 | 0.05 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 52.65 | (0.21 | ) | (5.20 | ) | (5.41 | ) | — | (4.30 | ) | (4.30 | ) | 42.94 | –9.86 | 7,496 | 2.03 | 2.03 | (0.44 | ) | ||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 49.60 | (0.28 | ) | 6.11 | 5.83 | — | (2.78 | ) | (2.78 | ) | 52.65 | 12.21 | 13,824 | 2.02 | 2.02 | (0.55 | ) | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 39.09 | (0.30 | ) | 10.81 | 10.51 | — | — | — | 49.60 | 26.85 | 17,084 | 2.04 | 2.04 | (0.66 | ) | ||||||||||||||||||||||||||||||||||||||||
Class Z | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 38.23 | 0.35 | 30.55 | 30.90 | (0.51 | ) | — | (0.51 | ) | 68.62 | 81.23 | 10,246 | 0.87 | 0.87 | 0.65 | ||||||||||||||||||||||||||||||||||||||||
Period from 9/30/20193 to 6/30/2020 | 52.15 | 0.56 | (11.79 | ) | (11.23 | ) | (0.53 | ) | (2.16 | ) | (2.69 | ) | 38.23 | –22.99 | 6,540 | 0.874 | 0.874 | 1.724 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 36 | % | 34 | % | 40 | % | 29 | % | 29 | % |
1 Net investment income (loss) per share has been calculated based on average shares outstanding during the period.
2 Total returns exclude the effects of sales charges. The Fund's investment advisor may have waived a portion of its advisory fee and/or reimbursed a portion of the Fund's expenses. Without such waiver and/or reimbursement, the Fund's performance would have been lower. Returns for periods less than one year are not annualized.
3 Commencement of operations.
4 Annualized.
The accompanying notes are an integral part of these financial statements.
62
Financial Highlights
The following per share data and ratios have been derived from information provided in the financial statements.
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Small Cap Diversified Value Fund | Net asset value, beginning of period | Net investment income1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of period | Total return2 | Net assets, end of period (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 7.88 | $ | 0.14 | $ | 6.07 | $ | 6.21 | $ | (0.10 | ) | $ | — | $ | (0.10 | ) | $ | 13.99 | 79.26 | % | $ | 427,708 | 0.80 | % | 0.87 | % | 1.21 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 10.08 | 0.12 | (2.23 | ) | (2.11 | ) | (0.09 | ) | — | (0.09 | ) | 7.88 | –21.14 | 143,415 | 0.82 | 0.92 | 1.37 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 12.21 | 0.10 | (1.30 | ) | (1.20 | ) | (0.08 | ) | (0.85 | ) | (0.93 | ) | 10.08 | –9.23 | 95,405 | 0.90 | 1.06 | 0.91 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 12.06 | 0.10 | 1.85 | 1.95 | (0.05 | ) | (1.75 | ) | (1.80 | ) | 12.21 | 17.48 | 40,128 | 0.90 | 1.45 | 0.80 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 9.12 | 0.09 | 2.94 | 3.03 | (0.09 | ) | — | (0.09 | ) | 12.06 | 33.26 | 19,265 | 0.90 | 1.70 | 0.86 | ||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 7.83 | 0.11 | 6.06 | 6.17 | (0.09 | ) | — | (0.09 | ) | 13.91 | 79.09 | 8,668 | 1.05 | 1.14 | 0.96 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 10.03 | 0.10 | (2.24 | ) | (2.14 | ) | (0.06 | ) | — | (0.06 | ) | 7.83 | –21.48 | 1,535 | 1.07 | 1.18 | 1.06 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 12.14 | 0.06 | (1.26 | ) | (1.20 | ) | (0.06 | ) | (0.85 | ) | (0.91 | ) | 10.03 | –9.35 | 2,875 | 1.15 | 1.36 | 0.55 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 12.01 | 0.07 | 1.84 | 1.91 | (0.03 | ) | (1.75 | ) | (1.78 | ) | 12.14 | 17.18 | 2,835 | 1.15 | 1.70 | 0.58 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 9.09 | 0.06 | 2.93 | 2.99 | (0.07 | ) | — | (0.07 | ) | 12.01 | 32.86 | 721 | 1.15 | 1.89 | 0.55 | ||||||||||||||||||||||||||||||||||||||||
Class Z | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 7.87 | 0.15 | 6.07 | 6.22 | (0.10 | ) | — | (0.10 | ) | 13.99 | 79.45 | 1,186 | 0.77 | 0.77 | 1.25 | ||||||||||||||||||||||||||||||||||||||||
Period from 9/30/20193 to 6/30/2020 | 10.02 | 0.09 | (2.14 | ) | (2.05 | ) | (0.10 | ) | — | (0.10 | ) | 7.87 | –20.75 | 40 | 0.804 | 0.844 | 1.414 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 42 | % | 53 | % | 84 | % | 95 | % | 58 | % |
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Global Value Fund | Net asset value, beginning of year | Net investment income1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of year | Total return2 | Net assets, end of year (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 8.96 | $ | 0.10 | $ | 5.56 | $ | 5.66 | $ | (0.18 | ) | $ | — | $ | (0.18 | ) | $ | 14.44 | 63.58 | % | $ | 36,025 | 0.95 | % | 1.29 | % | 0.83 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 11.55 | 0.14 | (2.42 | ) | (2.28 | ) | (0.13 | ) | (0.18 | ) | (0.31 | ) | 8.96 | –20.42 | 25,148 | 0.95 | 1.32 | 1.31 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 13.30 | 0.23 | (0.94 | ) | (0.71 | ) | (0.14 | ) | (0.90 | ) | (1.04 | ) | 11.55 | –4.57 | 39,749 | 0.96 | 1.62 | 2.02 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 12.82 | 0.11 | 1.09 | 1.20 | (0.13 | ) | (0.59 | ) | (0.72 | ) | 13.30 | 9.59 | 8,987 | 1.10 | 2.87 | 0.83 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 10.10 | 0.12 | 2.70 | 2.82 | (0.10 | ) | — | (0.10 | ) | 12.82 | 27.93 | 7,694 | 1.10 | 3.37 | 1.00 | ||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 8.96 | 0.08 | 5.54 | 5.62 | (0.15 | ) | — | (0.15 | ) | 14.43 | 63.05 | 1,484 | 1.20 | 1.48 | 0.58 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 11.55 | 0.11 | (2.41 | ) | (2.30 | ) | (0.11 | ) | (0.18 | ) | (0.29 | ) | 8.96 | –20.57 | 168 | 1.20 | 1.62 | 1.05 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 13.28 | 0.09 | (0.83 | ) | (0.74 | ) | (0.09 | ) | (0.90 | ) | (0.99 | ) | 11.55 | –4.85 | 238 | 1.24 | 2.64 | 0.72 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 12.80 | 0.07 | 1.10 | 1.17 | (0.10 | ) | (0.59 | ) | (0.69 | ) | 13.28 | 9.36 | 732 | 1.35 | 3.12 | 0.55 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 10.09 | 0.14 | 2.65 | 2.79 | (0.08 | ) | — | (0.08 | ) | 12.80 | 27.69 | 436 | 1.35 | 3.37 | 1.19 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 39 | % | 36 | % | 36 | % | 43 | % | 38 | % |
1 Net investment income per share has been calculated based on average shares outstanding during the period.
2 Total returns exclude the effects of sales charges. The Fund's investment advisor may have waived a portion of its advisory fee and/or reimbursed a portion of the Fund's expenses. Without such waiver and/or reimbursement, the Fund's performance would have been lower. Returns for periods less than one year are not annualized.
3 Commencement of operations.
4 Annualized.
The accompanying notes are an integral part of these financial statements.
63
Financial Highlights
The following per share data and ratios have been derived from information provided in the financial statements.
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
International Value Fund | Net asset value, beginning of year | Net investment income1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of year | Total return2 | Net assets, end of year (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 7.59 | $ | 0.15 | $ | 4.04 | $ | 4.19 | $ | (0.12 | ) | $ | — | $ | (0.12 | ) | $ | 11.66 | 55.37 | % | $ | 2,554 | 0.95 | % | 5.13 | % | 1.56 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 9.77 | 0.13 | (1.96 | ) | (1.83 | ) | (0.19 | ) | (0.16 | ) | (0.35 | ) | 7.59 | –19.66 | 1,874 | 0.95 | 6.10 | 1.39 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 11.57 | 0.19 | (1.27 | ) | (1.08 | ) | (0.14 | ) | (0.58 | ) | (0.72 | ) | 9.77 | –9.04 | 2,334 | 0.99 | 5.94 | 1.85 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 11.85 | 0.11 | 0.31 | 0.42 | (0.13 | ) | (0.57 | ) | (0.70 | ) | 11.57 | 3.50 | 2,543 | 1.15 | 6.01 | 0.90 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 9.76 | 0.12 | 2.38 | 2.50 | (0.17 | ) | (0.24 | ) | (0.41 | ) | 11.85 | 26.14 | 2,422 | 1.15 | 7.36 | 1.12 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 29 | % | 30 | % | 42 | % | 33 | % | 34 | % |
Income from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
International Small Cap Diversified Value Fund | Net asset value, beginning of period | Net investment income1 | Net gains on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of period | Total return2 | Net assets, end of period (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period from 6/30/20203 to 6/30/2021 | $ | 10.00 | $ | 0.24 | $ | 4.87 | $ | 5.11 | $ | (0.08 | ) | $ | (0.20 | ) | $ | (0.28 | ) | $ | 14.83 | 51.58 | % | $ | 6,661 | 0.99 | % | 4.27 | % | 1.91 | % |
Year Ended June 30, | |||||||
2021 | |||||||
Portfolio turnover rate | 63 | % |
1 Net investment income per share has been calculated based on average shares outstanding during the year.
2 Total returns exclude the effects of sales charges. The Fund's investment advisor may have waived a portion of its advisory fee and/or reimbursed a portion of the Fund's expenses. Without such waiver and/or reimbursement, the Fund's performance would have been lower.
3 Commencement of operations.
The accompanying notes are an integral part of these financial statements.
64
Financial Highlights
The following per share data and ratios have been derived from information provided in the financial statements.
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Value Opportunities Fund | Net asset value, beginning of period | Net investment income1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of period | Total return2 | Net assets, end of period (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 22.61 | $ | 0.50 | $ | 15.06 | $ | 15.56 | $ | (0.75 | ) | $ | — | $ | (0.75 | ) | $ | 37.42 | 69.77 | % | $ | 390,241 | 0.94 | % | 0.94 | % | 1.69 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 28.08 | 0.49 | (5.28 | ) | (4.79 | ) | (0.32 | ) | (0.36 | ) | (0.68 | ) | 22.61 | –17.56 | 401,552 | 0.97 | 0.97 | 1.88 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 30.38 | 0.30 | 0.09 | 0.39 | (0.31 | ) | (2.38 | ) | (2.69 | ) | 28.08 | 2.45 | 588,097 | 0.96 | 0.96 | 1.05 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 27.99 | 0.40 | 2.93 | 3.33 | (0.53 | ) | (0.41 | ) | (0.94 | ) | 30.38 | 12.11 | 453,184 | 0.97 | 0.97 | 1.36 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 22.21 | 0.38 | 5.99 | 6.37 | (0.59 | ) | — | (0.59 | ) | 27.99 | 28.79 | 347,924 | 0.99 | 0.99 | 1.46 | ||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 22.66 | 0.43 | 15.06 | 15.49 | (0.72 | ) | — | (0.72 | ) | 37.43 | 69.24 | 83,243 | 1.24 | 1.24 | 1.43 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 28.12 | 0.43 | (5.29 | ) | (4.86 | ) | (0.24 | ) | (0.36 | ) | (0.60 | ) | 22.66 | –17.73 | 72,162 | 1.20 | 1.20 | 1.64 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 30.40 | 0.22 | 0.10 | 0.32 | (0.22 | ) | (2.38 | ) | (2.60 | ) | 28.12 | 2.18 | 131,050 | 1.21 | 1.21 | 0.77 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 28.00 | 0.31 | 2.95 | 3.26 | (0.45 | ) | (0.41 | ) | (0.86 | ) | 30.40 | 11.84 | 136,325 | 1.22 | 1.22 | 1.07 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 22.21 | 0.31 | 5.99 | 6.30 | (0.51 | ) | — | (0.51 | ) | 28.00 | 28.47 | 136,525 | 1.24 | 1.24 | 1.21 | ||||||||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 20.87 | 0.21 | 13.83 | 14.04 | (0.60 | ) | — | (0.60 | ) | 34.31 | 68.05 | 27,089 | 1.93 | 1.93 | 0.76 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 25.94 | 0.23 | (4.90 | ) | (4.67 | ) | (0.04 | ) | (0.36 | ) | (0.40 | ) | 20.87 | –18.32 | 26,951 | 1.91 | 1.91 | 0.94 | |||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 28.22 | 0.01 | 0.10 | 0.11 | (0.01 | ) | (2.38 | ) | (2.39 | ) | 25.94 | 1.44 | 47,021 | 1.96 | 1.96 | 0.02 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 26.04 | 0.08 | 2.74 | 2.82 | (0.23 | ) | (0.41 | ) | (0.64 | ) | 28.22 | 10.99 | 49,624 | 1.97 | 1.97 | 0.30 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 20.68 | 0.11 | 5.57 | 5.68 | (0.32 | ) | — | (0.32 | ) | 26.04 | 27.53 | 57,953 | 1.99 | 1.99 | 0.46 | ||||||||||||||||||||||||||||||||||||||||
Class Z | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 22.62 | 0.55 | 15.04 | 15.59 | (0.78 | ) | — | (0.78 | ) | 37.43 | 69.86 | 43,886 | 0.87 | 0.87 | 1.81 | ||||||||||||||||||||||||||||||||||||||||
Period from 9/30/20193 to 6/30/2020 | 27.79 | 0.37 | (4.84 | ) | (4.47 | ) | (0.34 | ) | (0.36 | ) | (0.70 | ) | 22.62 | –16.61 | 16,207 | 0.854 | 0.854 | 1.954 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 76 | % | 47 | % | 60 | % | 55 | % | 83 | % |
Income (loss) from investment operations | Dividends and distributions | Ratios to Average Net Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||
High Yield Fund | Net asset value, beginning of period | Net investment income1 | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total distributions | Net asset value, end of period | Total return2 | Net assets, end of period (in thousands) | Expenses, net of reimbursement/ waiver | Expenses, before reimbursement/ waiver | Net investment income | ||||||||||||||||||||||||||||||||||||||||||
Class I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | $ | 10.22 | $ | 0.59 | $ | 1.34 | $ | 1.93 | $ | (0.57 | ) | $ | — | $ | (0.57 | ) | $ | 11.58 | 19.32 | % | $ | 857,715 | 0.70 | % | 0.75 | % | 5.34 | % | |||||||||||||||||||||||||||
Year ended 6/30/2020 | 11.69 | 0.65 | (1.48 | )5 | (0.83 | ) | (0.64 | ) | — | (0.64 | ) | 10.22 | –7.26 | 978,398 | 0.70 | 0.75 | 5.85 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 11.90 | 0.69 | (0.21 | ) 5 | 0.48 | (0.69 | ) | — | (0.69 | ) | 11.69 | 4.19 | 1,825,782 | 0.70 | 0.75 | 5.87 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 12.26 | 0.72 | (0.37 | ) 5 | 0.35 | (0.71 | ) | — | (0.71 | ) | 11.90 | 2.87 | 1,918,320 | 0.70 | 0.74 | 5.93 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 11.47 | 0.75 | 0.795 | 1.54 | (0.75 | ) | — | (0.75 | ) | 12.26 | 13.75 | 2,091,104 | 0.70 | 0.74 | 6.22 | ||||||||||||||||||||||||||||||||||||||||
Class A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 10.13 | 0.56 | 1.33 | 1.89 | (0.54 | ) | — | (0.54 | ) | 11.48 | 19.09 | 39,312 | 0.91 | 0.97 | 5.12 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 11.62 | 0.63 | (1.51 | ) 5 | (0.88 | ) | (0.61 | ) | — | (0.61 | ) | 10.13 | –7.77 | 43,638 | 0.95 | 1.01 | 5.54 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 11.83 | 0.65 | (0.20 | ) 5 | 0.45 | (0.66 | ) | — | (0.66 | ) | 11.62 | 3.92 | 303,367 | 0.95 | 1.00 | 5.62 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 12.18 | 0.69 | (0.37 | ) 6 | 0.32 | (0.67 | ) | — | (0.67 | ) | 11.83 | 2.68 | 466,960 | 0.95 | 0.99 | 5.69 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 11.40 | 0.72 | 0.785 | 1.50 | (0.72 | ) | — | (0.72 | ) | 12.18 | 13.42 | 566,806 | 0.95 | 0.99 | 5.99 | ||||||||||||||||||||||||||||||||||||||||
Class C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 10.21 | 0.49 | 1.34 | 1.83 | (0.47 | ) | — | (0.47 | ) | 11.57 | 18.20 | 1,769 | 1.66 | 1.71 | 4.41 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 11.68 | 0.55 | (1.48 | ) | (0.93 | ) | (0.54 | ) | — | (0.54 | ) | 10.21 | –8.13 | 2,596 | 1.64 | 1.69 | 4.95 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 11.89 | 0.57 | (0.21 | ) | 0.36 | (0.57 | ) | — | (0.57 | ) | 11.68 | 3.15 | 3,599 | 1.70 | 1.75 | 4.88 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2018 | 12.26 | 0.60 | (0.38 | ) 5 | 0.22 | (0.59 | ) | — | (0.59 | ) | 11.89 | 1.76 | 3,380 | 1.70 | 1.74 | 4.93 | |||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2017 | 11.47 | 0.63 | 0.795 | 1.42 | (0.63 | ) | — | (0.63 | ) | 12.26 | 12.62 | 3,010 | 1.70 | 1.74 | 5.22 | ||||||||||||||||||||||||||||||||||||||||
Class Z | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2021 | 10.22 | 0.61 | 1.33 | 1.94 | (0.58 | ) | — | (0.58 | ) | 11.58 | 19.44 | 211,034 | 0.60 | 0.65 | 5.56 | ||||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2020 | 11.70 | 0.64 | (1.46 | ) 5 | (0.82 | ) | (0.66 | ) | — | (0.66 | ) | 10.22 | –7.24 | 523,848 | 0.60 | 0.65 | 6.02 | ||||||||||||||||||||||||||||||||||||||
Year ended 6/30/2019 | 11.90 | 0.70 | (0.20 | ) | 0.50 | (0.70 | ) | — | (0.70 | ) | 11.70 | 4.38 | 401,268 | 0.60 | 0.65 | 5.99 | |||||||||||||||||||||||||||||||||||||||
Period from 3/29/20183 to 6/30/2018 | 12.00 | 0.18 | (0.12 | ) | 0.07 | (0.17 | ) | — | (0.17 | ) | 11.90 | 0.59 | 328,769 | 0.604 | 0.704 | 6.544 |
Year Ended June 30, | |||||||||||||||||||||||
2021 | 2020 | 2019 | 2018 | 2017 | |||||||||||||||||||
Portfolio turnover rate | 82 | % | 67 | % | 41 | % | 38 | % | 46 | % |
1 Net investment income per share has been calculated based on average shares outstanding during the period.
2 Total returns exclude the effects of sales charges. The Fund's investment advisor may have waived a portion of its advisory fee and/or reimbursed a portion of the Fund's expenses. Without such waiver and/or reimbursement, the Fund's performance would have been lower. Returns for periods less than one year are not annualized.
3 Commencement of operations.
4 Annualized.
5 Redemption fees per share were less than $0.005.
6 Includes redemption fees per share of $0.01.
The accompanying notes are an integral part of these financial statements.
65
Notes to the Financial Statements
JUNE 30, 2021
NOTE 1.
Organization. Hotchkis & Wiley Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end, management investment company. The Trust was organized as a Delaware statutory trust on July 23, 2001 and consists of ten series. The Hotchkis & Wiley Diversified Value Fund, the Hotchkis & Wiley Large Cap Value Fund, the Hotchkis & Wiley Mid-Cap Value Fund, the Hotchkis & Wiley Small Cap Value Fund, the Hotchkis & Wiley Small Cap Diversified Value Fund, the Hotchkis & Wiley Global Value Fund, the Hotchkis & Wiley International Value Fund, the Hotchkis & Wiley International Small Cap Diversified Value Fund and the Hotchkis & Wiley High Yield Fund (collectively, the "H&W Funds") are each a diversified series and the Hotchkis & Wiley Value Opportunities Fund (together with the H&W Funds, hereafter referred to as the "Funds") is a non-diversified series of the Trust. The Trust was organized to acquire the assets and liabilities of the Mercury HW Large Cap Value Fund, the Mercury HW Mid-Cap Value Fund and the Mercury HW Small Cap Value Fund (the "Mercury HW Funds"). On February 4, 2002, the Mercury HW Funds were reorganized into the Trust through a non-taxable exchange. On August 28, 2009, the Hotchkis & Wiley Core Value Fund was renamed the Hotchkis & Wiley Diversified Value Fund and the Hotchkis & Wiley All Cap Value Fund was renamed the Hotchkis & Wiley Value Opportunities Fund.
The Diversified Value Fund, Large Cap Value Fund, Mid-Cap Value Fund, Small Cap Value Fund, Small Cap Diversified Value Fund, Global Value Fund, International Value Fund, Value Opportunities Fund and High Yield Fund have four authorized classes of shares: Class I, Class A, Class C and Class Z. The International Small Cap Diversified Value Fund has three authorized classes of shares: Class I, Class A and Class Z. Class A shares are sold with a front-end sales charge. Class C shares may be subject to a contingent deferred sales charge. Class C shares are automatically converted to Class A shares approximately eight years after purchase and will then be subject to lower distribution and service fees. All classes have identical voting, dividend, liquidation and other rights and the same terms and conditions, except that Class A and Class C shares bear certain expenses related to the distribution and servicing expenditures. Currently, the International Value Fund and International Small Cap Diversified Value Fund are not offering Class A shares to investors; the Small Cap Diversified Value Fund, Global Value Fund and International Value Fund are not offering Class C shares to investors; and the Diversified Value Fund, Global Value Fund, International Value Fund and International Small Cap Diversified Value Fund are not offering Class Z shares to investors. Effective August 29, 2019, Class R shares converted to Class A shares for the Large Cap Value Fund and Mid-Cap Value Fund.
Significant Accounting Policies. The Funds' financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), which may require the use of management accruals and estimates. Actual results could differ from those estimates and those differences could be significant. Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board ("FASB") Accounting Standard Codification Topic 946 "Financial Services — Investment Companies". The following is a summary of significant accounting policies followed by the Funds.
Security Valuation. Portfolio securities that are listed on a U.S. stock exchange or The Nasdaq Stock Market ("NSM") (including the Nasdaq National Market and the Nasdaq Small Cap Market) are valued at the last reported sale price (or official closing price) on that day as of the close of the New York Stock Exchange (which is generally 4:00 p.m. Eastern time), or, in the absence of recorded sales, at the average of the last bid and asked quotation on such exchange or NSM. Unlisted equity securities that are not included in NSM are valued at the last sale price, or if the last sale price is unavailable, at the average of the quoted bid and asked prices in the over-the-counter market. Foreign equity securities (which are principally traded in markets other than the U.S.) are valued based upon the last reported sale price on the primary exchange or market on which they trade as of the close of business of such exchange or market immediately preceding the time of determining the Fund's net asset value. Fixed-income securities are generally valued on the basis of prices obtained from an approved independent pricing service but may also be valued based on reported transactions on FINRA's Trade Reporting and Compliance Engine (TRACE) or quotations provided by a broker-dealer. The pricing services may provide a price determined by a matrix pricing method or other analytical pricing models. Investments quoted in foreign currency are valued daily in U.S. dollars on the basis of the foreign currency exchange rate prevailing at the time of valuation. Securities and other assets for which market quotations are not readily available are valued at their fair value as determined by Hotchkis & Wiley Capital Management, LLC (the "Advisor") under guidelines established by and under the general supervision and responsibility of the Trust's Board of Trustees (the "Board"). The Board has approved the use of a third-party vendor's proprietary fair value pricing model to assist in determining current valuation for foreign securities traded in markets that close prior to the New York Stock Exchange. When fair value pricing is employed, the value of the portfolio securities used to calculate the Funds' net asset values may differ from quoted or official closing prices.
The Trust has performed an analysis of all existing investments to determine the significance and character of all inputs to their fair value determination. Various inputs are used in determining the value of each Fund's investments. These inputs are summarized in the following three broad categories:
• Level 1 — Quoted unadjusted prices for identical instruments in active markets to which the Trust has access at the date of measurement.
• Level 2 — Other significant observable inputs (including quoted prices for similar instruments, interest rates, current yields, credit quality, prepayment speeds for mortgage related securities, collateral for asset-backed securities, foreign security indices, foreign exchange rates, fair value estimates for foreign securities, and changes in benchmark securities indices). Level 2 inputs are those in markets for which there are few transactions, the prices are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
• Level 3 — Significant unobservable inputs including model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Trust's own assumptions that market participants would use to price the asset or liability based on the best available information.
66
The following table presents the valuation levels of each Fund's assets as of June 30, 2021:
Diversified Value | Large Cap Value | Mid-Cap Value | Small Cap Value | Small Cap Diversified Value | |||||||||||||||||||
Level 1 — Quoted prices in an active market: | |||||||||||||||||||||||
Common Stocks | $ | 105,359,029 | $ | 461,890,025 | $ | 412,794,729 | $ | 546,265,044 | $ | 430,850,595 | |||||||||||||
Money Market Funds | — | — | — | 20,827,764 | 2,775,461 | ||||||||||||||||||
Time Deposits | 3,462,535 | 776,216 | 14,107,000 | 10,968,071 | 13,407,905 | ||||||||||||||||||
Level 2 — Other significant observable market inputs: | |||||||||||||||||||||||
Common Stocks: | |||||||||||||||||||||||
Energy | — | — | 14,838,556 | 952,178 | — | ||||||||||||||||||
Industrials | — | — | 10,991,870 | — | — | ||||||||||||||||||
Materials | — | — | — | 40,015 | — | ||||||||||||||||||
Level 3 — Significant unobservable inputs | — | — | — | — | — | ||||||||||||||||||
Total Investments | $ | 108,821,564 | $ | 462,666,241 | $ | 452,732,155 | $ | 579,053,072 | $ | 447,033,961 | |||||||||||||
Global Value | International Value | International Small Cap Diversified Value | Value Opportunities | High Yield | |||||||||||||||||||
Level 1 — Quoted prices in an active market: | |||||||||||||||||||||||
Common Stocks | $ | 26,012,549 | $ | 716,689 | $ | 1,487,693 | $ | 474,108,241 | $ | 16,591,644 | |||||||||||||
Investment Companies | — | — | — | — | 25,412,570 | ||||||||||||||||||
Preferred Stocks | — | — | — | 553,817 | 3,055,968 | ||||||||||||||||||
Purchased Put Options | — | — | — | 210,750 | — | ||||||||||||||||||
Money Market Funds | — | — | — | 3,886,401 | — | ||||||||||||||||||
Time Deposits | 728,792 | 10,911 | 78,937 | 3,293,538 | 19,833,723 | ||||||||||||||||||
Level 2 — Other significant observable market inputs: | |||||||||||||||||||||||
Common Stocks: | |||||||||||||||||||||||
Communication Services | — | 92,437 | 88,941 | — | — | ||||||||||||||||||
Consumer Discretionary | 1,109,919 | 160,823 | 642,395 | 6,556,840 | — | ||||||||||||||||||
Consumer Staples | 1,532,681 | 248,040 | 341,972 | 2,674,077 | — | ||||||||||||||||||
Energy | 495,510 | 147,351 | 125,535 | 5,609,536 | — | ||||||||||||||||||
Financials | 4,019,644 | 649,880 | 1,213,864 | — | — | ||||||||||||||||||
Health Care | — | 71,763 | 217,223 | — | — | ||||||||||||||||||
Industrials | 3,423,651 | 395,849 | 1,290,850 | 25,501,990 | — | ||||||||||||||||||
Information Technology | — | 77,249 | 296,241 | — | — | ||||||||||||||||||
Materials | — | — | 590,903 | 1,094,639 | — | ||||||||||||||||||
Real Estate | — | — | 152,193 | — | — | ||||||||||||||||||
Utilities | — | — | 169,789 | — | — | ||||||||||||||||||
Convertible Preferred Stocks | — | — | — | 3,891,601 | 6,184,352 | ||||||||||||||||||
Convertible Bonds | 40,163 | 4,868 | — | — | 8,194,828 | ||||||||||||||||||
Corporate Bonds | — | — | — | — | 880,671,206 | ||||||||||||||||||
Asset-Backed Securities | — | — | — | — | 4,710,245 | ||||||||||||||||||
Term Loans | — | — | — | 1,424,735 | 78,170,623 | ||||||||||||||||||
Purchased Put Options | — | — | — | 35,750 | — | ||||||||||||||||||
Level 3 — Significant unobservable inputs: | |||||||||||||||||||||||
Common Stocks: | |||||||||||||||||||||||
Energy — Exploration & Production | — | — | — | — | 157,044 | ||||||||||||||||||
Materials | — | — | — | 14,070,772 | — | ||||||||||||||||||
Metals/Mining Excluding Steel | — | — | — | — | 45,927,835 | ||||||||||||||||||
Oil Field Equipment & Services | — | — | — | — | 8,318,963 | ||||||||||||||||||
Preferred Stocks: | |||||||||||||||||||||||
Specialty Retail | — | — | — | — | 8,976,915 | ||||||||||||||||||
Term Loans | — | — | — | 3,526,694 | 8,632,515 | ||||||||||||||||||
Total Investments | $ | 37,362,909 | $ | 2,575,860 | $ | 6,696,536 | $ | 546,439,381 | $ | 1,114,838,431 | |||||||||||||
Other Financial Instruments | |||||||||||||||||||||||
Level 1 — Quoted prices in an active market: | |||||||||||||||||||||||
Futures Contracts* | $ | 403,023 | |||||||||||||||||||||
Level 2 — Other significant observable market inputs | — | ||||||||||||||||||||||
Level 3 — Significant unobservable inputs | — | ||||||||||||||||||||||
Total Other Financial Instruments | $ | 403,023 |
* Futures contracts are derivative instruments not reflected on the Schedule of Investments and are reflected at the unrealized appreciation/depreciation on the instrument.
67
Please refer to the Schedule of Investments for additional information regarding the composition of the amounts listed above.
The following table provides information about the Level 3 values, as well as their inputs, as of June 30, 2021:
Fair Value at June 30, 2021 | Valuation Techniques | Unobservable Inputs | Input Values (Weighted Average)* | Impact to Valuation from an Increase to Input | |||||||||||||||||||
Value Opportunities | |||||||||||||||||||||||
Common Stocks | $ | 12,061,957 | Market comparable companies | EBIT multiple | 8 x - 18.3x | Increase | |||||||||||||||||
2,008,815 | Transaction price** | N/A | $285.25 | Increase | |||||||||||||||||||
Total Common Stocks | 14,070,772 | ||||||||||||||||||||||
Term Loans | 2,649,013 | Market comparable securities | N/A | $100.00 | Increase | ||||||||||||||||||
877,681 | Transaction price | N/A | $100.00 | Increase | |||||||||||||||||||
Total Term Loans | 3,526,694 | ||||||||||||||||||||||
$ | 17,597,466 | ||||||||||||||||||||||
High Yield | |||||||||||||||||||||||
Common Stocks | $ | 0 | Estimated recovery value | Probability of asset recovery | $0.00 | Increase | |||||||||||||||||
21,121,487 | Market comparable companies | EBIT multiple | 6.5 x - 18.3x (12.3x) | Increase | |||||||||||||||||||
157,044 | Transaction price | N/A | $11.50 | Increase | |||||||||||||||||||
33,125,311 | Transaction price** | N/A | $285.25 | Increase | |||||||||||||||||||
Total Common Stocks | 54,403,842 | ||||||||||||||||||||||
Preferred Stocks | 8,976,915 | Market comparable | EBIT multiple | 5.3x - 44x | Increase | ||||||||||||||||||
|
| companies |
|
|
| ||||||||||||||||||
Term Loans | 1,826,992 | Market comparable securities | N/A | $100.00 | Increase | ||||||||||||||||||
6,805,523 | Transaction price | N/A | $100.00 | Increase | |||||||||||||||||||
Total Term Loans | 8,632,515 | ||||||||||||||||||||||
$ | 72,013,272 |
* Unobservable inputs were weighted by the fair value of the investments.
** Fair value was determined based on recent acquisition or offer as the best measure of fair value with no material changes in operations of the related company since the transaction date.
The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:
Value Opportunities | |||||||||||||||
Common Stocks | Term Loans | Total | |||||||||||||
Balance at June 30, 2020 | $ | 11,128,189 | $ | 3,772,233 | $ | 14,900,422 | |||||||||
Purchases | — | 354,507 | 354,507 | ||||||||||||
Sales | — | (623,670 | ) | (623,670 | ) | ||||||||||
Accrued discounts (premiums) | — | 200,566 | 200,566 | ||||||||||||
Realized gains (losses) | — | — | — | ||||||||||||
Change in unrealized appreciation/ depreciation | 2,942,583 | (176,942 | ) | 2,765,641 | |||||||||||
Transfers into Level 3 | — | — | — | ||||||||||||
Balance at June 30, 2021 | $ | 14,070,772 | $ | 3,526,694 | $ | 17,597,466 | |||||||||
Change in unrealized appreciation/ depreciation for Level 3 assets held at June 30, 2021 | $ | 2,942,583 | $ | (176,942 | ) | $ | 2,765,641 |
68
High Yield | |||||||||||||||||||||||
Common Stocks | Preferred Stocks | Corporate Bonds | Term Loans | Total | |||||||||||||||||||
Balance at June 30, 2020 | $ | 49,618,084 | $ | 0 | $ | 0 | $ | 6,130,631 | $ | 55,748,715 | |||||||||||||
Purchases | 204,836 | 4,424,572 | 363,882 | 2,748,838 | 7,742,128 | ||||||||||||||||||
Sales | (4,424,572 | ) | — | — | (430,138 | ) | (4,854,710 | ) | |||||||||||||||
Accrued discounts (premiums) | — | — | (36,022 | ) | 1,555,185 | 1,519,163 | |||||||||||||||||
Realized gains (losses) | (827,177 | ) | (11,261,746 | ) | (15,573,603 | ) | — | (27,662,526 | ) | ||||||||||||||
Change in unrealized appreciation/ depreciation | 9,832,671 | 15,814,089 | 15,245,743 | (1,372,001 | ) | 39,520,502 | |||||||||||||||||
Transfers into Level 3 | — | — | — | — | — | ||||||||||||||||||
Balance at June 30, 2021 | $ | 54,403,842 | $ | 8,976,915 | $ | — | $ | 8,632,515 | $ | 72,013,272 | |||||||||||||
Change in unrealized appreciation/ depreciation for Level 3 assets held at June 30, 2021 | $ | 13,607,499 | $ | 4,552,343 | $ | — | $ | (1,372,001 | ) | $ | 16,787,841 |
Income and Expense Allocation. Common expenses incurred by the Trust which are not allocable to a specific Fund are allocated among the Funds based upon relative net assets or evenly, depending on the nature of the expenditure. For all Funds, except the High Yield Fund, net investment income, other than class-specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative net asset value of outstanding shares of each class at the beginning of the day (after adjusting for the current day's capital share activity of the respective class). For the High Yield Fund, net investment income, other than class-specific expenses, and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative net asset value of settled shares of each class at the beginning of the day (after adjusting for the current day's capital share activity of the respective class).
Dividends and Distributions to Shareholders. Dividends and distributions to shareholders are recorded on the ex-dividend date. Dividends from net investment income are declared daily and paid monthly for the High Yield Fund and declared and paid annually for the Diversified Value Fund, Large Cap Value Fund, Mid-Cap Value Fund, Small Cap Value Fund, Small Cap Diversified Value Fund, Global Value Fund, International Value Fund, International Small Cap Diversified Value Fund and Value Opportunities Fund. Distributions of net realized capital gains, if any, will be declared and paid at least annually.
Security Transactions and Investment Income. Security and shareholder transactions are recorded on trade date. Realized gains and losses on sales of investments are calculated on the specifically identified cost basis of the securities. Dividend income, less foreign taxes withheld, if any, is recorded on the ex-dividend date. Interest income is recognized on the accrual basis. Market discounts and original issue discounts on fixed-income securities are amortized daily over the expected life of the security using the effective yield method. Market premiums on fixed-income securities are amortized daily on the yield to the next call method. Return of capital distributions received from real estate investment trust ("REIT") securities are recorded as an adjustment to the cost of the security and thus may impact unrealized gains or losses on the security.
Securities purchased or sold on a when-issued, delayed delivery or forward commitment basis may have extended settlement periods. The value of the security purchased is subject to market fluctuations during this period. The Funds will segregate or "earmark" liquid assets until the settlement date or otherwise cover their position in an amount sufficient to meet the Funds' obligations.
Foreign Currency Transactions. Securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Funds isolate the portion of realized gains or losses and do not isolate the portion of unrealized appreciation or depreciation resulting from changes in foreign exchange rates on securities from the fluctuations arising from changes in market prices of securities held. Reported net realized foreign exchange gains or losses arise from sales of securities, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Funds' books and the U.S. dollar equivalent of the amounts actually received or paid.
Payment In-Kind Securities. Certain Funds may invest in payment in-kind securities. Payment in-kind securities give the issuer the option at each interest payment date of making interest payments in either cash or additional debt securities. Those additional debt securities usually have the same terms, including maturity dates and interest rates, and associated risks as the original bonds. The daily market quotations of the original bonds may include the accrued interest (referred to as a dirty price) and may require a pro-rata adjustment to interest receivable from the unrealized appreciation or depreciation of securities on the Statements of Assets & Liabilities.
Restricted and Illiquid Securities. The Funds may invest in securities that are subject to legal or contractual restrictions on resale or are illiquid. Restricted securities generally may be resold in transactions exempt from registration. An illiquid security is an investment that a Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at the current valuation may be difficult.
Options. The Funds are subject to equity price risk in the normal course of pursuing their investment objectives. The Funds may purchase put options on securities to protect holdings in an underlying or related security against a substantial decline in market value. The Funds may purchase call options on securities and security indexes. A Fund may write a call or put option only if the option is "covered" by the Fund holding a position in the underlying securities or by other means which would permit immediate satisfaction of the Fund's obligation as writer of the option. Prior to exercise or expiration,
69
an option may be closed by an offsetting purchase or sale of an option of the same series. The purchase and writing of options involves certain risks. If a put or call option purchased by a Fund is not sold when it has remaining value, and if the market price of the underlying security, in the case of a put, remains equal to or greater than the exercise price or, in the case of a call, remains less than or equal to the exercise price, the Fund will lose its entire investment in the option. There can be no assurance that a liquid market will exist when a Fund seeks to close out an option position. Furthermore, if trading restrictions or suspensions are imposed on the options markets, the Fund may be unable to close out a position. With options, there is minimal counterparty risk to the Funds since options are exchange traded and the exchange's clearinghouse, as counterparty to all exchange traded options, guarantees the options against default.
When a Fund purchases a put or call option, an amount equal to the premium paid is included on the Statements of Assets & Liabilities as an investment, and is subsequently adjusted to reflect the fair market value of the option. If an option expires on the stipulated expiration date or if the Fund enters into a closing sale transaction, a gain or loss is realized. If the Fund exercises a put option, a gain or loss is realized from the sale of the underlying security, and the proceeds from such sale are decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security acquired is increased by the premium paid for the call.
Futures Contracts. The Global Value Fund, International Value Fund, International Small Cap Diversified Value Fund, Value Opportunities Fund and High Yield Fund are subject to foreign currency exchange rate risk in the normal course of pursuing their investment objectives. A Fund may use futures contracts to gain exposure to, or hedge against, changes in the value of foreign currencies. A futures contract provides for the future sale by one party and purchase by another party of an asset at a specified price on a specified date. Upon entering into such contracts, the Fund is required to deposit with the broker, either in cash or securities, an initial margin deposit in an amount equal to a certain percentage of the contract amount. Subsequent payments (variation margin) are made or received by the Fund each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gains or losses by the Fund. Upon entering into such contracts, the Fund bears the risk of exchange rates moving unexpectedly, in which case the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. When a contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund's basis in the contract. With futures, there is minimal counterparty risk to the Fund since futures are exchange traded and the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. The use of futures contracts involves the risk of imperfect correlation in movements in the price of the futures contracts, exchange rates and the underlying hedged assets.
Credit Default Swap Contracts. The Value Opportunities Fund and High Yield Fund may enter into credit default swap agreements for purposes of attempting to obtain a particular desired return at a lower cost to the Fund than if the Fund had invested directly in an instrument that yielded the desired return. The buyer in a credit default swap is obligated to pay the seller a periodic stream of payments over the term of the contract provided no event of default on an underlying reference obligation has occurred. In the event of default, the seller must pay the buyer a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced entity or underlying securities comprising the referenced index. Credit default swaps involve greater risks than if the Fund invested in the reference obligation directly. In addition to general market risks, credit default swaps are subject to illiquidity risk, counterparty risk and credit risk. The Fund's maximum risk of loss from counterparty risk, either as the protection seller or as the protection buyer, is the fair value of the contract. This risk is mitigated by having a master netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to the Fund to cover the Fund's exposure to the counterparty.
The Advisor, on behalf of the Value Opportunities Fund and High Yield Fund, is party to an International Swap Dealers Association, Inc. Master Agreement ("ISDA Master Agreement") with each of Goldman Sachs International and JPMorgan Chase Bank, N.A. that governs transactions, such as over-the-counter swap contracts, entered into by the Funds and the counterparty. The ISDA Master Agreement contains provisions for general obligations, representations, agreements, collateral and events of default or termination. Events of termination include conditions that may entitle the counterparty to elect to terminate early and cause settlement of all outstanding transactions under the ISDA Master Agreement.
Upon entering into swap agreements, the Value Opportunities Fund and High Yield Fund will either receive or pay an upfront payment based upon the difference between the current principal amount and the notional amount of the swap and whether the Fund is buying or selling protection. Upfront payments that are received are recorded as liabilities while upfront payments paid are recorded as assets. These payments remain on the books until the swap contract is closed. When entering into credit default swaps, the Fund will either deliver collateral to the counterparty or the counterparty will deliver collateral to the Fund. The amount of this collateral is calculated based upon the notional value and the current price of the swap. In the event of default, the Fund has recourse against any collateral posted to it by the counterparty. When entering into swap agreements as a seller, the notional amounts would be partially offset by any recovery values of the respective reference obligations, upfront payments received upon entering into the agreement, or net amounts received from the settlement of buy protection credit default swap agreements entered into by the Fund for the same reference entity. Unrealized appreciation or depreciation is recorded daily as the difference between the prior day and current day closing price. The Funds did not enter into any credit default swap contracts during the year ended June 30, 2021.
Derivative Instruments. The Funds have adopted authoritative standards regarding disclosures about derivatives and how they affect the Funds' Statements of Assets & Liabilities and Statements of Operations.
The following is a summary of the Funds' derivative instrument holdings categorized by primary risk exposure as of June 30, 2021:
Asset Derivatives
Location on Statements of Assets & Liabilities | Value Opportunities | ||||||||||
Equity Contracts: | |||||||||||
Purchased Put Options | Long-term investments | $ | 246,500 | ||||||||
Foreign Exchange Contracts: | |||||||||||
Futures Contracts | Total accumulated distributable earnings (losses)* | $ | 403,023 |
* Includes unrealized appreciation/depreciation of futures contracts as reported in the Schedule of Futures Contracts.
70
The following is a summary of the Funds' realized gains (losses) and change in unrealized appreciation/depreciation on derivative instruments recognized in the Statements of Operations categorized by primary risk exposure for the year ended June 30, 2021:
Realized Gains (Losses) on Derivatives
Value Opportunities | |||||||
Equity Contracts: | |||||||
Purchased Put Options | $ | (9,353,352 | )* | ||||
Foreign Exchange Contracts: | |||||||
Futures Contracts | (238,570 | ) |
* Included with net realized gains (losses) from sales of unaffiliated issuers.
Change in Unrealized Appreciation/Depreciation on Derivatives
Value Opportunities | |||||||
Equity Contracts: | |||||||
Purchased Put Options | $ | 7,337,970 | * | ||||
Foreign Exchange Contracts: | |||||||
Futures Contracts | 403,023 |
* Included with net change in unrealized appreciation/depreciation of securities of unaffiliated issuers and foreign currency translations.
The following is a summary of the Funds' average quarterly balance of outstanding derivative instruments categorized by primary risk exposure for the year ended June 30, 2021:
Average Quarterly Balance of Outstanding Derivatives
Value Opportunities | |||||||
Equity Contracts: | |||||||
Average Number of Contracts — Purchased Put Options | 2,134 | ||||||
Average Notional Amount — Purchased Put Options | $ | 59,341,785 | |||||
Foreign Exchange Contracts: | |||||||
Average Number of Contracts — Futures Contracts | 70 | ||||||
Average Notional Amount — Futures Contracts | $ | 6,000,165 |
Offsetting Assets and Liabilities. The Funds are subject to various master netting arrangements, which govern the terms of certain transactions with counterparties. The arrangements allow the Funds to close out and net their total exposure to a counterparty in the event of a default with respect to all the transactions governed under a single agreement with a counterparty. For financial reporting purposes, the Funds do not offset financial assets and liabilities that are subject to master netting arrangements in the Statements of Assets & Liabilities.
The following is a summary of the arrangements subject to offsetting as of June 30, 2021:
Gross Amounts Not Offset in the Statements of Assets & Liabilities | |||||||||||||||||||
Gross Amounts Presented in the Statements of Assets & Liabilities | Financial Instruments | Collateral Received* | Net Amount | ||||||||||||||||
Securities Lending: | |||||||||||||||||||
Small Cap Value | $ | 20,292,470 | $ | — | $ | (20,292,470 | ) | $ | — | ||||||||||
Small Cap Diversified Value | 2,699,130 | — | (2,699,130 | ) | — | ||||||||||||||
Value Opportunities | 3,800,485 | — | (3,800,485 | ) | — |
* Actual collateral received is greater than the amount shown due to overcollateralization.
71
NOTE 2.
Fees and Transactions with Affiliates. The Trust has entered into Investment Advisory Agreements for each of the Funds with the Advisor, with which the officers and a Trustee of the Trust are affiliated. The Advisor is a limited liability company, the primary members of which are HWCap Holdings, a limited liability company with members who are current and former employees of the Advisor, and Stephens - H&W, LLC, a limited liability company whose primary member is SF Holding Corp., which is a diversified holding company. The Advisor is responsible for the management of the Funds' investments and provides the personnel, facilities, equipment and certain other services necessary to the operations of each Fund. The Advisor receives a fee, computed daily and payable monthly, at the annual rates presented below as applied to each Fund's daily net assets. The Advisor contractually agreed to waive fees or reimburse regular operating expenses in excess of the annual rates presented below as applied to such Fund's daily net assets during the fiscal year ended June 30, 2021.
Diversified Value | Large Cap Value | Mid-Cap Value | Small Cap Value | Small Cap Diversified Value | Global Value | International Value | International Small Cap Diversified Value | Value Opportunities | High Yield | ||||||||||||||||||||||||||||||||||
Annual Advisory Fee Rate | 0.70 | %1 | 0.70 | %2 | 0.75 | %3 | 0.75 | % | 0.65 | % | 0.75 | % | 0.80 | % | 0.80 | % | 0.75 | % | 0.55 | % | |||||||||||||||||||||||
Annual cap on expenses — Class I | 0.80 | % | 0.95 | % | 1.15 | % | 1.25 | % | 0.80 | % | 0.95 | % | 0.95 | % | 0.99 | % | 1.25 | % | 0.70 | % | |||||||||||||||||||||||
Annual cap on expenses — Class A | 1.05 | % | 1.20 | % | 1.40 | % | 1.50 | % | 1.05 | % | 1.20 | % | 1.20 | % | 1.24 | % | 1.50 | % | 0.95 | % | |||||||||||||||||||||||
Annual cap on expenses — Class C | 1.80 | % | 1.95 | % | 2.15 | % | 2.25 | % | 1.80 | % | 1.95 | % | 1.95 | % | n/a | 2.25 | % | 1.70 | % | ||||||||||||||||||||||||
Annual cap on expenses — Class Z | 0.80 | % | 0.95 | % | 1.15 | % | 1.25 | % | 0.80 | % | 0.95 | % | 0.95 | % | 0.99 | % | 1.25 | % | 0.60 | % |
1 The Annual Advisory Fee Rate is 0.70% for the first $250 million in assets, 0.60% for the next $250 million in assets and 0.50% thereafter.
2 The Annual Advisory Fee Rate is 0.70% for the first $500 million in assets, 0.60% for the next $500 million in assets and 0.55% thereafter.
3 The Annual Advisory Fee Rate is 0.75% for the first $5 billion in assets, 0.65% for the next $5 billion in assets and 0.60% thereafter.
Quasar Distributors, LLC is the principal underwriter and distributor for the shares of the Funds ("Quasar" or the "Distributor"). Pursuant to the Distribution Plan adopted by the Trust in accordance with Rule 12b-1 under the 1940 Act, the Funds pay the Distributor ongoing distribution and service fees. The fees are accrued daily at the annual rates based upon the average daily net assets of the shares as follows:
Distribution and Service Fee | |||||||
Class A | 0.25 | % | |||||
Class C | 1.00 | % |
Pursuant to separate agreements with the Distributor, selected dealers and other financial intermediaries also provide distribution services to the Funds. The ongoing distribution and service fee compensates the Distributor and selected dealers for providing distribution-related and shareholder services to Class A and Class C shareholders.
Certain selected dealers and other financial intermediaries charge a fee for shareholder accounting services and administrative services that they provide to the Funds on behalf of certain shareholders; the portion of this fee paid by the Funds is included within "Transfer agent fees and expenses" in the Statements of Operations. Class Z shares are not subject to these fees.
The Funds are permitted to purchase securities from or sell securities to another Fund or affiliated person under procedures adopted by the Board. During the year ended June 30, 2021, the Funds' did not have any of these purchases and sales.
NOTE 3.
Investments. Purchases and sales of investment securities, excluding short-term investments, for the year ended June 30, 2021 were as follows:
Diversified Value | Large Cap Value | Mid-Cap Value | Small Cap Value | Small Cap Diversified Value | Global Value | International Value | International Small Cap Diversified Value | Value Opportunities | High Yield | ||||||||||||||||||||||||||||||||||
Purchases | $ | 27,297,960 | $ | 104,037,597 | $ | 135,852,098 | $ | 161,499,036 | $ | 251,633,062 | $ | 11,630,407 | $ | 686,711 | $ | 7,684,110 | $ | 354,172,245 | $ | 992,930,583 | |||||||||||||||||||||||
Sales | 35,377,787 | 225,929,302 | 214,136,892 | 241,738,156 | 105,741,658 | 14,132,597 | 972,188 | 3,227,875 | 518,980,899 | 1,561,060,209 |
The Funds did not have any purchases or sales of U.S. Government securities for the year ended June 30, 2021.
72
NOTE 4.
Federal Income Taxes. It is each Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and each Fund intends to distribute substantially all of its investment company net taxable income and net capital gains to shareholders. Therefore, no federal income tax provision is required. Under the applicable foreign tax law, a withholding tax may be imposed on interest, dividends and capital gains at various rates.
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the Funds for financial reporting purposes. The Funds may utilize earnings and profits distributed to shareholders on redemptions of shares as part of the dividends paid deduction. Generally accepted accounting principles require that permanent financial reporting and tax differences be reclassified within the capital accounts.
The following information is presented on an income tax basis as of June 30, 2021:
Diversified Value | Large Cap Value | Mid-Cap Value | Small Cap Value | Small Cap Diversified Value | Global Value | International Value | International Small Cap Diversified Value | Value Opportunities | High Yield | ||||||||||||||||||||||||||||||||||
Tax cost of investments | $ | 88,400,493 | $ | 363,310,149 | $ | 366,881,385 | $ | 456,686,627 | $ | 323,630,576 | $ | 28,847,011 | $ | 2,085,773 | $ | 5,557,107 | $ | 463,306,558 | $ | 1,136,116,233 | |||||||||||||||||||||||
Gross unrealized appreciation | 28,949,457 | 138,002,281 | 124,443,306 | 173,490,261 | 120,338,911 | 9,243,633 | 596,972 | 1,259,947 | 124,411,736 | 57,157,032 | |||||||||||||||||||||||||||||||||
Gross unrealized depreciation | (11,990,921 | ) | (39,422,405 | ) | (52,699,485 | ) | (82,919,651 | ) | (13,118,892 | ) | (1,455,445 | ) | (117,616 | ) | (199,624 | ) | (48,049,395 | ) | (98,268,548 | ) | |||||||||||||||||||||||
Net unrealized appreciation/ depreciation | 16,958,536 | 98,579,876 | 71,743,821 | 90,570,610 | 107,220,019 | 7,788,188 | 479,356 | 1,060,323 | 76,362,341 | (41,111,516 | ) | ||||||||||||||||||||||||||||||||
Distributable ordinary income (as of 6/30/21)* | 993,673 | 1,949,236 | 5,476,789 | 1,532,644 | 6,026,674 | 252,787 | 37,541 | 1,085,118 | 6,213,371 | 598,310 | |||||||||||||||||||||||||||||||||
Distributable long-term gains (as of 6/30/21) | — | — | — | — | 1,307,324 | — | — | 241 | 24,056,422 | — | |||||||||||||||||||||||||||||||||
Total distributable earnings | 993,673 | 1,949,236 | 5,476,789 | 1,532,644 | 7,333,998 | 252,787 | 37,541 | 1,085,359 | 30,269,793 | 598,310 | |||||||||||||||||||||||||||||||||
Other accumulated losses | (34,011,974 | ) | (8,621,409 | ) | (324,929,890 | ) | (36,771,974 | ) | (262,154 | ) | (1,914,073 | ) | (121,027 | ) | — | — | (319,462,115 | ) | |||||||||||||||||||||||||
Total accumulated gains (losses) | $ | (16,059,765 | ) | $ | 91,907,703 | $ | (247,709,280 | ) | $ | 55,331,280 | $ | 114,291,863 | $ | 6,126,902 | $ | 395,870 | $ | 2,145,682 | $ | 106,632,134 | $ | (359,975,321 | ) |
* Includes distributable short-term gains of $4,004,804 for the Small Cap Diversified Value Fund and $976,161 for the International Small Cap Diversified Value Fund.
As of the close of business on December 31, 2012, in exchange for shares the Advisor transferred assets valued at $1,132,946 to the Global Value Fund. As a result of the tax-deferred transfers, the Global Value Fund acquired $50,230 of unrealized appreciation for tax purposes. As of June 30, 2021, the Global Value Fund held securities with $3,664 of net unrealized appreciation relating to the transfers.
As of the close of business on June 30, 2014, in exchange for shares Stephens Investment Holdings LLC transferred assets valued at $5,038,896 to the Small Cap Diversified Value Fund. As a result of the tax-deferred transfers, the Small Cap Diversified Value Fund acquired $592,438 of unrealized appreciation for tax purposes. As of June 30, 2021, the Small Cap Diversified Value Fund held securities with $24,171 of net unrealized appreciation relating to the transfers.
On the Statements of Assets & Liabilities, the following adjustments were made for permanent tax differences. These differences are due primarily to differing treatment for items such as partnership adjustments.
Paid-In Capital | Total Accumulated Distributable Earnings (Losses) | ||||||||||
Diversified Value | $ | — | $ | — | |||||||
Large Cap Value | — | — | |||||||||
Mid-Cap Value | — | — | |||||||||
Small Cap Value | — | — | |||||||||
Small Cap Diversified Value | (1,179 | ) | 1,179 | ||||||||
Global Value | — | — | |||||||||
International Value | — | — | |||||||||
International Small Cap Diversified Value | — | — | |||||||||
Value Opportunities | — | — | |||||||||
High Yield | — | — |
73
The tax components of distributions paid during the fiscal years ended June 30, 2021 and 2020, capital loss carryovers as of June 30, 2021, and any tax basis late year losses as of June 30, 2021, which are not recognized for tax purposes until the first day of the following fiscal year, are:
June 30, 2021 | June 30, 2020 | ||||||||||||||||||||||||||||||||||
Ordinary Income Distributions | Long-Term Capital Gains Distributions | Short-Term Capital Loss Carryovers1 | Long-Term Capital Loss Carryovers2 | Capital Loss Carryovers Utilized | Late Year Losses | Ordinary Income Distributions | Long-Term Capital Gains Distributions | ||||||||||||||||||||||||||||
Diversified Value | $ | 1,525,761 | $ | — | $ | 5,996 | $ | 34,005,978 | $ | 2,459,799 | $ | — | $ | 1,715,852 | $ | — | |||||||||||||||||||
Large Cap Value | 6,504,911 | — | — | 8,621,409 | 11,998,948 | — | 7,868,043 | — | |||||||||||||||||||||||||||
Mid-Cap Value | 7,928,177 | — | 91,972,164 | 233,016,965 | 40,324,582 | — | 14,838,215 | — | |||||||||||||||||||||||||||
Small Cap Value | 3,718,542 | — | 17,981,960 | 18,789,683 | — | — | 10,643,165 | 22,636,076 | |||||||||||||||||||||||||||
Small Cap Diversified Value | 2,388,699 | — | — | — | 5,151,038 | — | 1,103,840 | — | |||||||||||||||||||||||||||
Global Value | 447,072 | — | 533,389 | 1,380,684 | 2,330,057 | — | 867,014 | 158,491 | |||||||||||||||||||||||||||
International Value | 30,073 | — | — | 121,027 | 110,710 | — | 52,275 | 31,599 | |||||||||||||||||||||||||||
International Small Cap Diversified Value | 120,245 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Value Opportunities | 10,585,396 | — | — | — | 64,832,466 | — | 13,802,647 | 3,538,096 | |||||||||||||||||||||||||||
High Yield3 | 65,565,649 | — | 922,717 | 317,755,556 | — | — | 128,474,656 | — |
1 Short-term with no expiration.
2 Long-term with no expiration.
3 The Fund inherited a short-term capital loss carryover of $922,717 and a long-term capital loss carryover of $3,566,005 as a result of the reorganization with the Capital Income Fund (Note 11), which are included in the totals. These capital loss carryovers are further subject to an annual limitation of $171,228 pursuant to Section 382.
As of and during the year ended June 30, 2021, the Funds did not have a liability for any unrecognized tax benefits. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statements of Operations. During the year ended June 30, 2021, the Funds did not incur any interest or penalties. The tax years ended June 30, 2018 through June 30, 2021 remain open and subject to examination by tax jurisdictions.
NOTE 5.
Capital Share Transactions. Transactions in capital shares for each class were as follows:
Sales | Reinvestment of dividends and distributions | Redemptions | Net increase (decrease) | ||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||
Year Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
Diversified Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 388,515 | $ | 9,134,799 | 47,787 | $ | 945,231 | (919,488 | ) | $ | (18,376,345 | ) | (483,186 | ) | $ | (8,296,315 | ) | |||||||||||||||||||
Class A | 309,619 | 7,601,562 | 10,034 | 199,372 | (209,895 | ) | (4,296,478 | ) | 109,758 | 3,504,456 | |||||||||||||||||||||||||
Class C | 4,993 | 113,057 | 395 | 7,851 | (30,013 | ) | (617,450 | ) | (24,625 | ) | (496,542 | ) | |||||||||||||||||||||||
Total net increase (decrease) | 703,127 | 16,849,418 | 58,216 | 1,152,454 | (1,159,396 | ) | (23,290,273 | ) | (398,053 | ) | (5,288,401 | ) | |||||||||||||||||||||||
Large Cap Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 1,630,439 | 58,814,186 | 108,040 | 3,746,815 | (4,570,468 | ) | (153,030,901 | ) | (2,831,989 | ) | (90,469,900 | ) | |||||||||||||||||||||||
Class A | 547,262 | 17,191,830 | 26,192 | 904,152 | (1,365,291 | ) | (46,254,599 | ) | (791,837 | ) | (28,158,617 | ) | |||||||||||||||||||||||
Class C | 30,782 | 1,239,736 | 429 | 14,725 | (220,060 | ) | (6,389,890 | ) | (188,849 | ) | (5,135,429 | ) | |||||||||||||||||||||||
Class Z | 145,638 | 5,398,783 | 4,508 | 156,287 | (109,767 | ) | (3,637,239 | ) | 40,379 | 1,917,831 | |||||||||||||||||||||||||
Total net increase (decrease) | 2,354,121 | 82,644,535 | 139,169 | 4,821,979 | (6,265,586 | ) | (209,312,629 | ) | (3,772,296 | ) | (121,846,115 | ) | |||||||||||||||||||||||
Mid-Cap Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 2,034,241 | 74,003,540 | 150,488 | 4,765,946 | (4,130,991 | ) | (126,048,480 | ) | (1,946,262 | ) | (47,278,994 | ) | |||||||||||||||||||||||
Class A | 512,685 | 18,014,959 | 34,687 | 1,081,182 | (961,777 | ) | (30,369,369 | ) | (414,405 | ) | (11,273,228 | ) | |||||||||||||||||||||||
Class C | 41,054 | 1,310,259 | 5,405 | 145,947 | (258,433 | ) | (6,510,643 | ) | (211,974 | ) | (5,054,437 | ) | |||||||||||||||||||||||
Class Z | 188,321 | 5,245,488 | 13,604 | 430,698 | (377,921 | ) | (11,518,930 | ) | (175,996 | ) | (5,842,744 | ) | |||||||||||||||||||||||
Total net increase (decrease) | 2,776,301 | 98,574,246 | 204,184 | 6,423,773 | (5,729,122 | ) | (174,447,422 | ) | (2,748,637 | ) | (69,449,403 | ) | |||||||||||||||||||||||
Small Cap Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 2,213,459 | 122,660,692 | 24,995 | 1,324,472 | (3,534,703 | ) | (185,550,995 | ) | (1,296,249 | ) | (61,565,831 | ) | |||||||||||||||||||||||
Class A | 115,015 | 5,964,674 | 2,421 | 127,797 | (288,290 | ) | (15,111,244 | ) | (170,854 | ) | (9,018,773 | ) | |||||||||||||||||||||||
Class C | 4,424 | 205,247 | 121 | 5,147 | (83,097 | ) | (3,308,200 | ) | (78,552 | ) | (3,097,806 | ) | |||||||||||||||||||||||
Class Z | 51,443 | 2,367,616 | 1,634 | 86,524 | (74,867 | ) | (3,718,701 | ) | (21,790 | ) | (1,264,561 | ) | |||||||||||||||||||||||
Total net increase (decrease) | 2,384,341 | 131,198,229 | 29,171 | 1,543,940 | (3,980,957 | ) | (207,689,140 | ) | (1,567,445 | ) | (74,946,971 | ) |
74
Sales | Reinvestment of dividends and distributions | Redemptions | Net increase (decrease) | ||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||
Year Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
Small Cap Diversified Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 17,925,513 | $ | 207,063,514 | 215,613 | $ | 2,313,526 | (5,783,195 | ) | $ | (68,151,190 | ) | 12,357,931 | $ | 141,225,850 | |||||||||||||||||||||
Class A | 1,276,079 | 16,656,640 | 1,757 | 18,763 | (850,723 | ) | (10,840,534 | ) | 427,113 | 5,834,869 | |||||||||||||||||||||||||
Class Z | 82,187 | 796,426 | 632 | 6,779 | (3,048 | ) | (37,947 | ) | 79,771 | 765,258 | |||||||||||||||||||||||||
Total net increase (decrease) | 19,283,779 | 224,516,580 | 218,002 | 2,339,068 | (6,636,966 | ) | (79,029,671 | ) | 12,864,815 | 147,825,977 | |||||||||||||||||||||||||
Global Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 115,647 | 1,428,513 | 35,157 | 415,199 | (461,494 | ) | (4,924,372 | ) | (310,690 | ) | (3,080,660 | ) | |||||||||||||||||||||||
Class A | 99,368 | 1,276,822 | 230 | 2,722 | (15,454 | ) | (213,257 | ) | 84,144 | 1,066,287 | |||||||||||||||||||||||||
Total net increase (decrease) | 215,015 | 2,705,335 | 35,387 | 417,921 | (476,948 | ) | (5,137,629 | ) | (226,546 | ) | (2,014,373 | ) | |||||||||||||||||||||||
International Value Fund | |||||||||||||||||||||||||||||||||||
Class I | — | — | 3,029 | 30,073 | (31,047 | ) | (380,637 | ) | (28,018 | ) | (350,564 | ) | |||||||||||||||||||||||
Total net increase (decrease) | — | — | 3,029 | 30,073 | (31,047 | ) | (380,637 | ) | (28,018 | ) | (350,564 | ) | |||||||||||||||||||||||
International Small Cap Diversified Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 439,500 | 4,395,000 | 9,711 | 120,245 | — | — | 449,211 | 4,515,245 | |||||||||||||||||||||||||||
Total net increase | 439,500 | 4,395,000 | 9,711 | 120,245 | — | — | 449,211 | 4,515,245 | |||||||||||||||||||||||||||
Value Opportunities Fund | |||||||||||||||||||||||||||||||||||
Class I | 4,392,877 | 136,803,581 | 137,703 | 4,054,081 | (11,859,433 | ) | (304,077,970 | ) | (7,328,853 | ) | (163,220,308 | ) | |||||||||||||||||||||||
Class A | 553,432 | 16,561,166 | 44,459 | 1,311,078 | (1,558,031 | ) | (47,688,345 | ) | (960,140 | ) | (29,816,101 | ) | |||||||||||||||||||||||
Class C | 68,900 | 2,124,274 | 18,303 | 496,749 | (589,010 | ) | (15,299,430 | ) | (501,807 | ) | (12,678,407 | ) | |||||||||||||||||||||||
Class Z | 482,089 | 11,850,275 | 31,409 | 924,361 | (57,415 | ) | (1,889,718 | ) | 456,083 | 10,884,918 | |||||||||||||||||||||||||
Total net increase (decrease) | 5,497,298 | 167,339,296 | 231,874 | 6,786,269 | �� | (14,063,889 | ) | (368,955,463 | ) | (8,334,717 | ) | (194,829,898 | ) | ||||||||||||||||||||||
High Yield Fund | |||||||||||||||||||||||||||||||||||
Class I | 26,682,118 | 295,880,004 | 3,585,419 | 39,484,060 | (51,926,052 | ) | (568,277,147 | ) | (21,658,515 | ) | (232,913,083 | ) | |||||||||||||||||||||||
Class A | 1,308,362 | 14,322,042 | 151,389 | 1,652,147 | (2,343,278 | ) | (25,304,609 | ) | (883,527 | ) | (9,330,420 | ) | |||||||||||||||||||||||
Class C | 20,286 | 221,602 | 7,151 | 78,592 | (128,763 | ) | (1,418,010 | ) | (101,326 | ) | (1,117,816 | ) | |||||||||||||||||||||||
Class Z | 4,297,840 | 47,212,468 | 994,609 | 10,912,278 | (38,336,219 | ) | (418,337,701 | )1 | (33,043,770 | ) | (360,212,955 | ) | |||||||||||||||||||||||
Total net increase (decrease) | 32,308,606 | 357,636,116 | 4,738,568 | 52,127,077 | (92,734,312 | ) | (1,013,337,467 | ) | (55,687,138 | ) | (603,574,274 | ) | |||||||||||||||||||||||
Year Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
Diversified Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 219,763 | $ | 3,303,517 | 53,943 | $ | 1,075,088 | (595,710 | ) | $ | (10,078,615 | ) | (322,004 | ) | $ | (5,700,010 | ) | |||||||||||||||||||
Class A | 54,755 | 906,556 | 11,172 | 223,673 | (328,804 | ) | (5,481,062 | ) | (262,877 | ) | (4,350,833 | ) | |||||||||||||||||||||||
Class C | 324 | 6,251 | 496 | 9,899 | (44,710 | ) | (755,936 | ) | (43,890 | ) | (739,786 | ) | |||||||||||||||||||||||
Total net increase (decrease) | 274,842 | 4,216,324 | 65,611 | 1,308,660 | (969,224 | ) | (16,315,613 | ) | (628,771 | ) | (10,790,629 | ) | |||||||||||||||||||||||
Large Cap Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 6,121,896 | 161,782,994 | 158,415 | 5,563,526 | (7,402,924 | ) | (208,291,964 | ) | (1,122,613 | ) | (40,945,444 | ) | |||||||||||||||||||||||
Class A (Note 10) | 2,372,019 | 68,849,583 | 35,625 | 1,246,516 | (1,663,508 | ) | (50,892,812 | ) | 744,136 | 19,203,287 | |||||||||||||||||||||||||
Class C | 20,111 | 578,041 | 1,905 | 65,888 | (116,395 | ) | (3,366,356 | ) | (94,379 | ) | (2,722,427 | ) | |||||||||||||||||||||||
Class R (Note 10) | 3,653 | 116,790 | — | — | (159,160 | ) | (5,081,991 | ) | (155,507 | ) | (4,965,201 | ) | |||||||||||||||||||||||
Class Z | 332,798 | 11,697,458 | 26 | 901 | (73,926 | ) | (2,029,700 | ) | 258,898 | 9,668,659 | |||||||||||||||||||||||||
Total net increase (decrease) | 8,850,477 | 243,024,866 | 195,971 | 6,876,831 | (9,415,913 | ) | (269,662,823 | ) | (369,465 | ) | (19,761,126 | ) |
75
Sales | Reinvestment of dividends and distributions | Redemptions | Net increase (decrease) | ||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||
Year Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
Mid-Cap Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 4,011,085 | $ | 108,674,041 | 384,208 | $ | 12,359,978 | (26,829,755 | ) | $ | (815,689,250 | ) | (22,434,462 | ) | $ | (694,655,231 | ) | |||||||||||||||||||
Class A (Note 10) | 832,752 | 22,329,973 | 29,051 | 921,797 | (2,492,169 | ) | (69,240,956 | ) | (1,630,366 | ) | (45,989,186 | ) | |||||||||||||||||||||||
Class C | 29,287 | 663,965 | 776 | 21,420 | (458,183 | ) | (10,762,109 | ) | (428,120 | ) | (10,076,724 | ) | |||||||||||||||||||||||
Class R (Note 10) | 4,076 | 126,658 | — | — | (128,982 | ) | (3,653,136 | ) | (124,906 | ) | (3,526,478 | ) | |||||||||||||||||||||||
Class Z | 8,256,491 | 260,030,548 | 28 | 908 | (7,538,961 | ) | (135,797,451 | ) | 717,558 | 124,234,005 | |||||||||||||||||||||||||
Total net increase (decrease) | 13,133,691 | 391,825,185 | 414,063 | 13,304,103 | (37,448,050 | ) | (1,035,142,902 | ) | (23,900,296 | ) | (630,013,614 | ) | |||||||||||||||||||||||
Small Cap Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 2,738,088 | 118,758,335 | 319,026 | 17,010,444 | (6,873,140 | ) | (334,008,550 | ) | (3,816,026 | ) | (198,239,771 | ) | |||||||||||||||||||||||
Class A | 202,719 | 8,073,450 | 21,584 | 1,146,521 | (374,947 | ) | (17,127,091 | ) | (150,644 | ) | (7,907,120 | ) | |||||||||||||||||||||||
Class C | 4,828 | 186,913 | 5,383 | 230,191 | (69,099 | ) | (2,605,952 | ) | (58,888 | ) | (2,188,848 | ) | |||||||||||||||||||||||
Class Z | 2,998,049 | 153,655,991 | 48 | 2,581 | (2,827,002 | ) | (87,972,042 | ) | 171,095 | 65,686,530 | |||||||||||||||||||||||||
Total net increase (decrease) | 5,943,684 | 280,674,689 | 346,041 | 18,389,737 | (10,144,188 | ) | (441,713,635 | ) | (3,854,463 | ) | (142,649,209 | ) | |||||||||||||||||||||||
Small Cap Diversified Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 15,343,798 | 128,242,330 | 101,881 | 1,088,093 | (6,698,417 | ) | (54,802,963 | ) | 8,747,262 | 74,527,460 | |||||||||||||||||||||||||
Class A | 113,996 | 1,129,591 | 1,352 | 14,382 | (206,106 | ) | (1,707,933 | ) | (90,758 | ) | (563,960 | ) | |||||||||||||||||||||||
Class Z | 4,990 | 50,000 | 45 | 478 | — | — | 5,035 | 50,478 | |||||||||||||||||||||||||||
Total net increase (decrease) | 15,462,784 | 129,421,921 | 103,278 | 1,102,953 | (6,904,523 | ) | (56,510,896 | ) | 8,661,539 | 74,013,978 | |||||||||||||||||||||||||
Global Value Fund | |||||||||||||||||||||||||||||||||||
Class I | 291,427 | 3,089,686 | 77,760 | 936,235 | (1,005,051 | ) | (9,516,983 | ) | (635,864 | ) | (5,491,062 | ) | |||||||||||||||||||||||
Class A | 20,589 | 164,431 | 354 | 4,267 | (22,803 | ) | (238,626 | ) | (1,860 | ) | (69,928 | ) | |||||||||||||||||||||||
Total net increase (decrease) | 312,016 | 3,254,117 | 78,114 | 940,502 | (1,027,854 | ) | (9,755,609 | ) | (637,724 | ) | (5,560,990 | ) | |||||||||||||||||||||||
International Value Fund | |||||||||||||||||||||||||||||||||||
Class I | — | — | 8,159 | 83,874 | — | — | 8,159 | 83,874 | |||||||||||||||||||||||||||
Total net increase | — | — | 8,159 | 83,874 | — | — | 8,159 | 83,874 | |||||||||||||||||||||||||||
Value Opportunities Fund | |||||||||||||||||||||||||||||||||||
Class I | 6,696,114 | 159,977,949 | 346,569 | 9,884,142 | (10,231,315 | ) | (231,108,023 | ) | (3,188,632 | ) | (61,245,932 | ) | |||||||||||||||||||||||
Class A | 715,935 | 17,569,480 | 64,990 | 1,860,010 | (2,256,535 | ) | (55,301,193 | ) | (1,475,610 | ) | (35,871,703 | ) | |||||||||||||||||||||||
Class C | 91,401 | 2,292,348 | 20,419 | 540,288 | (633,385 | ) | (14,705,190 | ) | (521,565 | ) | (11,872,554 | ) | |||||||||||||||||||||||
Class Z | 699,411 | 19,436,623 | 17,121 | 488,112 | — | — | 716,532 | 19,924,735 | |||||||||||||||||||||||||||
Total net increase (decrease) | 8,202,861 | 199,276,400 | 449,099 | 12,772,552 | (13,121,235 | ) | (301,114,406 | ) | (4,469,275 | ) | (89,065,454 | ) | |||||||||||||||||||||||
High Yield Fund | |||||||||||||||||||||||||||||||||||
Class I (Note 11) | 48,453,5862 | 520,235,4702 | 7,142,683 | 78,723,168 | (116,041,306 | ) | (1,272,201,377 | )3 | (60,445,037 | ) | (673,242,739 | ) | |||||||||||||||||||||||
Class A (Note 11) | 2,266,6092 | 23,886,4422 | 767,425 | 8,630,615 | (24,833,310 | ) | (280,107,700 | )3 | (21,799,276 | ) | (247,590,643 | ) | |||||||||||||||||||||||
Class C | 21,977 | 247,558 | 10,954 | 119,602 | (86,803 | ) | (970,751 | ) | (53,872 | ) | (603,591 | ) | |||||||||||||||||||||||
Class Z | 53,514,139 | 606,717,088 | 1,561,294 | 16,310,999 | (38,114,641 | ) | (390,872,098 | )3 | 16,960,792 | 232,155,989 | |||||||||||||||||||||||||
Total net increase (decrease) | 104,256,311 | 1,151,086,558 | 9,482,356 | 103,784,384 | (179,076,060 | ) | (1,944,151,926 | ) | (65,337,393 | ) | (689,280,984 | ) |
1 Includes in-kind redemptions which resulted in a realized loss of $(11,634,796).
2 Included within sales are shares issued in connection with the reorganization for Class I of 686,606 and amount of $7,072,381 and for Class A of 788,458 and amount of $8,047,794.
3 Net of redemption fees of $16,456 for Class I, $3,201 for Class A and $4,748 for Class Z. Effective September 30, 2019, the redemption fee was removed.
76
NOTE 6.
Investments in Affiliated Issuers. An issuer in which a Fund's holdings represent 5% or more of the outstanding voting securities of the issuer is an "affiliated" issuer as defined in the 1940 Act. A schedule of each Fund's investments in securities of affiliated issuers held during the year ended June 30, 2021, is set forth below:
Small Cap Value Fund
Issuer Name | Value at June 30, 2020 | Purchases | Sales | Net Realized Gains (Losses) | Net Change in Unrealized Appreciation/ Depreciation | Value at June 30, 2021 | Dividends | Shares Held at June 30, 2021 | |||||||||||||||||||||||||||
Hudson Global, Inc. | $ | 1,768,900 | $ | — | $ | (145,746 | ) | $ | (1,862,838 | ) | $ | 3,615,261 | $ | 3,375,577 | $ | — | 192,560 | ||||||||||||||||||
Noranda Aluminum Holding Corp. | 3,041 | — | — | — | 36,974 | 40,015 | — | 800,300 | |||||||||||||||||||||||||||
$ | 1,771,941 | $ | — | $ | (145,746 | ) | $ | (1,862,838 | ) | $ | 3,652,235 | $ | 3,415,592 | $ | — |
Value Opportunities Fund
Issuer Name | Value at June 30, 2020 | Purchases | Sales | Net Realized Gains (Losses) | Net Change in Unrealized Appreciation/ Depreciation | Value at June 30, 2021 | Dividends | Shares Held at June 30, 2021 | |||||||||||||||||||||||||||
Iracore Investments Holdings, Inc. | $ | 9,564,166 | $ | — | $ | — | $ | — | $ | 2,497,791 | $ | 12,061,957 | $ | 770,959 | 32,422 | ||||||||||||||||||||
Motors Liquidation Company GUC Trust+ | 2,450,881 | — | (3,339,050 | ) | 3,161,898 | (2,273,729 | ) | — | — | — | |||||||||||||||||||||||||
$ | 12,015,047 | $ | — | $ | (3,339,050 | ) | $ | 3,161,898 | $ | 224,062 | $ | 12,061,957 | $ | 770,959 |
+ Issuer was not an affiliate as of June 30, 2021.
High Yield Fund
Issuer Name | Value at June 30, 2020 | Purchases | Sales | Net Realized Gains (Losses) | Net Change in Unrealized Appreciation/ Depreciation | Value at June 30, 2021 | Dividends | Shares Held at June 30, 2021 | |||||||||||||||||||||||||||
American Zinc Recycling Corp. | $ | 25,790,712 | $ | — | $ | — | $ | (7 | ) | $ | 7,334,606 | $ | 33,125,311 | $ | — | 116,127 | |||||||||||||||||||
Iracore Investments Holdings, Inc. | 6,596,271 | — | — | — | 1,722,692 | 8,318,963 | 531,720 | 22,361 | |||||||||||||||||||||||||||
Lonestar Resources US, Inc. | — | 1,313,734 | * | (646,531 | ) | 459,962 | 4,427,372 | 5,554,537 | — | 541,906 | |||||||||||||||||||||||||
PetroQuest Energy, Inc. | 0 | 0 | * | — | — | — | 0 | — | 8,969,064 | ||||||||||||||||||||||||||
RA Parent, Inc. | 8,203,359 | — | — | (7 | ) | 4,599,172 | 12,802,524 | — | 291 | ||||||||||||||||||||||||||
$ | 40,590,342 | $ | 1,313,734 | $ | (646,531 | ) | $ | 459,948 | $ | 18,083,842 | $ | 59,801,335 | $ | 531,720 |
* Purchases reflect conversion from corporate bond to common stock.
NOTE 7.
Securities Lending. Effective December 2007, the Funds entered into a securities lending arrangement with Brown Brothers Harriman & Co. (the "Custodian"). Under the securities lending agreement, the Custodian is authorized to loan securities on behalf of the Funds to approved brokers. In exchange, the Funds receive cash collateral in the amount of at least 102% of the value of the securities loaned plus accrued interest. The total market value of securities on loan for each Fund is disclosed on the Schedule of Investments. The cash collateral is invested in short-term instruments as noted on the Schedule of Investments. The contractual maturity of the cash collateral received under the securities lending agreement is classified as overnight and continuous. Income earned from these investments is included in "Securities on loan, net" on the Statements of Operations and is allocated to each Fund based on each Fund's proportion of the total cash collateral received. Securities lending involves counterparty risks, including the risk that the loaned securities may not be returned in a timely manner or at all. Subject to certain conditions, the Custodian has agreed to indemnify the Funds from losses resulting from a borrower's failure to return a loaned security. In addition, the Funds bear the risk of loss associated with the investment of cash collateral received.
A portion of the income generated by the investment of the collateral, net of any rebates paid by the Custodian to borrowers, is remitted to the Custodian as lending agent, and the remainder is paid to the applicable Fund.
77
NOTE 8.
Commitments and Contingencies. Under the Trust's organizational documents and indemnification agreements between each independent Trustee and the Trust, its officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Trust. In addition, in the normal course of business the Trust enters into contracts that contain a variety of representations and warranties, which provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds.
Bridge loan commitments may obligate a Fund to furnish temporary financing to a borrower until permanent financing can be arranged. At June 30, 2021, the Funds did not have any outstanding bridge loan commitments.
Unfunded loan commitments are contractual obligations for funding to a borrower. At June 30, 2021, the High Yield Fund had an outstanding unfunded loan commitment of $622,645.
NOTE 9.
Risk Factors. Investing in a Fund may involve certain risks including, but not limited to, those described below.
Lower rated debt securities generally have higher rates of interest and involve greater risk of default or price changes due to changes in the issuer's creditworthiness than higher rated debt securities. The market prices of these securities may fluctuate more than higher quality securities and may decline significantly in periods of general economic difficulty. There may be little trading in the secondary market for particular debt securities, which may make them more difficult to value or sell.
The prices of, and the income generated by, most debt securities held by a Fund may be affected by changing interest rates and by changes in the effective maturities and credit ratings of these securities. For example, the prices of debt securities in a Fund's portfolio generally will decline when interest rates rise and increase when interest rates fall. In addition, falling interest rates may cause an issuer to redeem, "call" or refinance a security before its stated maturity, which may result in the Fund having to reinvest the proceeds in lower yielding securities. Debt securities are also subject to credit risk, which is the possibility that the credit strength of an issuer will weaken and/or an issuer of a debt security will fail to make timely payments of principal or interest and the security will go into default. Longer maturity debt securities generally have higher rates of interest and may be subject to greater price fluctuations than shorter maturity debt securities.
The United Kingdom's Financial Conduct Authority ("FCA") has announced plans to discontinue supporting LIBOR and transition away from LIBOR by the end of 2021. There is the risk that the transition away from LIBOR to alternative interest rate benchmarks is not orderly, occurs over various time periods or has unintended consequences. However, subsequent announcements by the FCA, the LIBOR administrator and other regulators indicate that it is possible that certain LIBOR tenors may continue beyond 2021 and the most widely used LIBOR tenors may continue until mid-2023. There remains uncertainty regarding the future use of LIBOR and the nature of any replacement rate, and any potential effects of the transition away from LIBOR on the Funds or on certain instruments in which the Funds invest are not known. Alternative reference rates, such as the Secured Overnight Financing Rate ("SOFR"), which measures the cost of overnight borrowings through repurchase agreement transactions collateralized with U.S. Treasury securities and is intended to replace U.S. dollar LIBOR, have been implemented for some instruments. The transition process may involve, among other things, increased volatility or illiquidity in markets for instruments that currently rely on LIBOR and may result in a reduction in value of certain instruments held by the Funds.
Certain Funds may invest in foreign (non-U.S.) securities and may experience more rapid and extreme changes in value than a fund that invests exclusively in securities of U.S. companies. The securities markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. Additionally, reporting, accounting and auditing standards of foreign countries differ, in some cases significantly, from U.S. standards. Also, nationalization, expropriation or confiscatory taxation, currency blockage, political changes or diplomatic developments could adversely affect a Fund's investments in a foreign country.
The Funds are subject to management risk because each Fund is an actively managed investment portfolio. Consequently, the Funds are subject to the risks that the methods and analysis employed by the Advisor may not produce the desired results and result in losses to the Funds.
The prices of, and the income generated by, the common stocks and other equity securities held by a Fund may decline in response to certain events taking place around the world, including those directly involving the issuers whose securities are owned by the Fund; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; governmental or governmental agency responses to economic conditions; and currency, interest rate and commodity price fluctuations.
An outbreak of infectious respiratory illness caused by a novel coronavirus known as COVID-19 has resulted in travel restrictions, closed international borders, enhanced health screenings at ports of entry and elsewhere, disruption of and delays in healthcare service preparation and delivery, prolonged quarantines, cancellations, supply chain disruptions, and changed consumer demand, as well as general concern and uncertainty. The impact of COVID-19, and other infectious illness outbreaks that may arise in the future, could further adversely affect the economies of many nations or the entire global economy, individual issuers and capital markets in ways that cannot necessarily be foreseen. In addition, the impact of infectious illnesses in emerging market countries may be greater due to generally less established healthcare systems. Public health crises caused by the COVID-19 outbreak may exacerbate other pre-existing political, social and economic risks in certain countries or globally. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty. The foregoing could impair the Funds' ability to maintain operational standards (such as with respect to satisfying redemption requests), disrupt the operations of the Funds' service providers, adversely affect the value and liquidity of the Funds' investments, and negatively impact the Funds' performance, and overall prevent the Funds from implementing their investment strategies and achieving their investment objectives.
Certain funds, accounts, individuals or affiliates may from time to time own (beneficially or of record) or control a significant percentage of a Fund's shares. Redemptions by these entities of their holdings in the Fund may impact the Fund's liquidity and net asset value ("NAV"). These redemptions may also force the Fund to sell securities.
78
NOTE 10.
Class R Shares. The Board approved closing the Class R shares of the Large Cap Value Fund and Mid-Cap Value Fund and converting Class R shares to Class A shares of each respective Fund effective on August 29, 2019 (the "Conversion"). The Conversion was accomplished by a tax-free exchange of Class R shares for Class A shares in the following amounts and at the following conversion ratios:
Class R Prior to Conversion | |||||||||||||||||||
Dollars | Shares | Conversion Ratio | Class A Shares | ||||||||||||||||
Large Cap Value | $ | 4,553,437 | 143,415 | 1.010825 | 144,968 | ||||||||||||||
Mid-Cap Value | 3,425,121 | 121,286 | 1.000354 | 121,329 |
NOTE 11.
Reorganization. As of the close of business on June 26, 2020, the High Yield Fund (the "Acquiring Fund") acquired the net assets of the Capital Income Fund (the "Acquired Fund") in exchange for shares of the Acquiring Fund pursuant to an Agreement and Plan of Reorganization approved by the Board. The reorganization qualified as a tax-free reorganization for federal income tax purposes and, accordingly, shareholders of the Acquired Fund will not recognize any gain or loss for federal income tax purposes as a direct result of the reorganization. Prior to the closing of reorganization, the Acquired Fund distributed all of its net investment income and net capital gains, if any. All or a portion of such distribution may be taxable to the Acquired Fund's shareholders for federal income tax purposes.
Investments
The cost, fair value and net unrealized appreciation/depreciation of the investments of the Acquired Fund as of the date of the reorganization were as follows:
Capital Income Fund | |||||||
Investments, at value | $ | 7,101,374 | |||||
Cost of investments | 9,002,107 | ||||||
Net unrealized appreciation/depreciation | (1,900,733 | ) | |||||
Capital loss carryovers available for potential utilization | 4,488,722 |
For financial reporting purposes, assets received and shares issued by the Acquiring Fund (listed below) were recorded at fair value; however, the cost basis of the investments received from the Acquired Fund was carried forward to align ongoing reporting of the Acquiring Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. The investments received by the Acquiring Fund were excluded from the portfolio turnover rate calculation.
Share Transactions
The net assets, shares outstanding and NAV per share immediately prior to and after the reorganization were as follows:
Net Assets | Shares Outstanding | NAV per Share | |||||||||||||
Acquired Fund — Prior to the Reorganization | |||||||||||||||
Class I | $ | 7,072,381 | 750,568 | $ | 9.4227 | ||||||||||
Class A | 8,047,794 | 816,157 | 9.8606 | ||||||||||||
Acquiring Fund — Prior to the Reorganization | |||||||||||||||
Class I | 976,740,795 | 94,824,693 | 10.3005 | ||||||||||||
Class A | 35,823,149 | 3,509,668 | 10.2070 | ||||||||||||
Acquiring Fund — After the Reorganization | |||||||||||||||
Class I | 983,813,176 | 95,511,299 | 10.3005 | ||||||||||||
Class A | 43,870,943 | 4,298,126 | 10.2070 |
Pro Forma Results of Operations
Assuming the reorganization had been completed on July 1, 2019, the beginning of the Acquiring Fund's fiscal year in which the reorganization took place, the pro forma results of operations for the year ended June 30, 2020, are as follows:
High Yield Fund | |||||||
Net investment income | $ | 129,237,856 | |||||
Net realized and unrealized gains (losses) | (301,016,780 | ) | |||||
Net decrease in net assets resulting from operations | $ | (171,778,924 | ) |
Because the combined investment portfolios have been managed as a single integrated portfolio since the reorganization was completed, it is not practicable to separate the amounts of revenue and earnings of the Acquired Fund that have been included in the Acquiring Fund's Statement of Operations since the reorganization was consummated.
79
NOTE 12.
New Accounting Pronouncements. In March 2020, FASB issued ASU No. 2020-04, Reference Rate Reform. The amendments in ASU No. 2020-04 provide optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In January 2021, the FASB issued ASU No. 2021-01, which clarifies that certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. The ASUs are effective for all entities as of March 12, 2020 through December 31, 2022. Management is currently evaluating the impact of the optional guidance on the Funds' financial statements and disclosures. The Funds did not utilize the optional expedients and exceptions provided by ASU No. 2020-04 and ASU No. 2021-01 during the year ended June 30, 2021.
NOTE 13.
Subsequent Events. On July 7, 2021, Foreside Financial Group, LLC ("Foreside"), the parent company of Quasar, announced that it had entered into a definitive purchase and sale agreement with Genstar Capital ("Genstar") such that Genstar would acquire a majority stake in Foreside. The transaction is expected to close at the end of the third quarter of 2021. On August 17, 2021, the Board approved Quasar to remain as the Funds' distributor at the close of the transaction.
Effective August 27, 2021, the Board approved an amendment to the Operating Expense Limitation Agreement, reducing the annual cap on expenses as noted below.
Mid-Cap Value | Small Cap Value | Value Opportunities | |||||||||||||
Annual cap on expenses — Class I | 1.05 | % | 1.15 | % | 1.15 | % | |||||||||
Annual cap on expenses — Class A | 1.30 | % | 1.40 | % | 1.40 | % | |||||||||
Annual cap on expenses — Class C | 2.05 | % | 2.15 | % | 2.15 | % | |||||||||
Annual cap on expenses — Class Z | 1.05 | % | 1.15 | % | 1.15 | % |
Management has evaluated subsequent events in the preparation of the Funds' financial statements and has determined that there are no additional events that require recognition or disclosure in the financial statements.
NOTE 14.(UNAUDITED)
Federal Tax Disclosure. The Funds designated as long-term capital gain dividends, pursuant to Internal Revenue Code Section 852(b)(3), the amount necessary to reduce the earnings and profits of the Funds related to net capital gains to zero for the tax year ended June 30, 2021.
For the year ended June 30, 2021, the following percentages of ordinary distributions paid qualify for the dividend received deduction available to corporate shareholders: Diversified Value Fund — 100.00%, Large Cap Value Fund — 100.00%, Mid-Cap Value Fund — 100.00%, Small Cap Value Fund — 100.00%, Small Cap Diversified Value Fund — 80.50%, Global Value Fund — 76.29%, International Value Fund — 2.30%, International Small Cap Diversified Value Fund — 0.00%, Value Opportunities Fund — 76.42%, High Yield Fund — 0.00%.
For the year ended June 30, 2021, the following percentages of ordinary distributions paid are designated as qualified dividend income under the Jobs and Growth Tax Relief Reconciliation Act of 2003: Diversified Value Fund — 100.00%, Large Cap Value Fund — 100.00%, Mid-Cap Value Fund — 100.00%, Small Cap Value Fund — 100.00%, Small Cap Diversified Value Fund — 82.89%, Global Value Fund — 100.00%, International Value Fund — 100.00%, International Small Cap Diversified Value Fund — 13.88%, Value Opportunities Fund — 96.49%, High Yield Fund — 0.00%. Shareholders should consult their tax advisors.
For the year ended June 30, 2021, the International Value Fund and International Small Cap Diversified Value Fund earned foreign source income of $65,714 and $184,037, respectively, and paid foreign taxes of $4,299 and $21,129, respectively, which each Fund intends to pass through to shareholders pursuant to Section 853 of the Internal Revenue Code.
Additional Information Applicable to Foreign Shareholders Only. For the year ended June 30, 2021, the Funds designate the following percentages of ordinary distributions paid as interest-related dividends under Internal Revenue Code Section 871(k)(1)(c): Diversified Value Fund — 0.00%, Large Cap Value Fund — 0.00%, Mid-Cap Value Fund — 1.14%, Small Cap Value Fund — 1.07%, Small Cap Diversified Value Fund — 0.00%, Global Value Fund — 1.06%, International Value Fund — 0.00%, International Small Cap Diversified Value Fund — 0.00%, Value Opportunities Fund — 28.93%, High Yield Fund — 91.72%.
For the year ended June 30, 2021, the following percentages of ordinary income distributions paid are designated as short-term capital gain distributions under Internal Revenue Code Section 871(k)(2)(c): Diversified Value Fund — 0.00%, Large Cap Value Fund — 0.00%, Mid-Cap Value Fund — 0.00%, Small Cap Value Fund — 0.00%, Small Cap Diversified Value Fund — 0.00%, Global Value Fund — 0.00%, International Value Fund — 0.00%, International Small Cap Diversified Value Fund — 71.80%, Value Opportunities Fund — 0.00%, High Yield Fund — 0.00%.
80
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees
of Hotchkis & Wiley Funds
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets & liabilities of Hotchkis & Wiley Funds (the "Funds") comprising the Diversified Value Fund, Large Cap Value Fund, Mid-Cap Value Fund, Small Cap Value Fund, Small Cap Diversified Value Fund, Global Value Fund, International Value Fund, International Small Cap Diversified Value Fund, Value Opportunities Fund, and High Yield Fund, including the schedules of investments, as of June 30, 2021, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, except International Small Cap Diversified Value Fund, the related statement of operations, changes in net assets, and financial highlights for the period from June 30, 2020 (commencement of operations) through June 30, 2021, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds constituting Hotchkis & Wiley Funds, except International Small Cap Diversified Value Fund, as of June 30, 2021, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of International Small Cap Diversified Value Fund as of June 30, 2021; the results of its operations, changes in net assets, and financial highlights for the period from June 30, 2020 (commencement of operations) through June 30, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on the Funds' financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of June 30, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Los Angeles, California
August 23, 2021
We have served as the auditor of one or more Hotchkis & Wiley Funds investment companies since 2012.
81
Fund Expense Examples (Unaudited)
As a mutual fund shareholder, you incur two types of costs: (1) transaction costs such as initial sales charges (loads) on purchase payments and contingent deferred sales charges and redemption fees on redemptions and (2) ongoing costs, including management fees, distribution and service (12b-1) fees and other fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 invested at the beginning of the most recent six-month period and held for the entire period (January 1, 2021 – June 30, 2021).
The table below illustrates the Funds' costs in two ways:
Based on actual fund returns. This section provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the section under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Based on hypothetical 5% yearly returns. This section provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads). Therefore, the second section is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions.
Based on Actual Fund Returns | Based on Hypothetical 5% Yearly Returns | ||||||||||||||||||||||||||||||
Beginning Account Value 1/1/21 | Ending Account Value 6/30/21 | Expenses Paid During Period* 1/1/21 - 6/30/21 | Beginning Account Value 1/1/21 | Ending Account Value 6/30/21 | Expenses Paid During Period* 1/1/21 - 6/30/21 | Annualized Expense Ratio | |||||||||||||||||||||||||
Diversified Value Fund | |||||||||||||||||||||||||||||||
Class I | $ | 1,000.00 | $ | 1,269.10 | $ | 4.50 | $ | 1,000.00 | $ | 1,020.83 | $ | 4.01 | 0.80 | % | |||||||||||||||||
Class A | 1,000.00 | 1,267.20 | 5.90 | 1,000.00 | 1,019.59 | 5.26 | 1.05 | ||||||||||||||||||||||||
Class C | 1,000.00 | 1,263.00 | 10.10 | 1,000.00 | 1,015.87 | 9.00 | 1.80 | ||||||||||||||||||||||||
Large Cap Value Fund | |||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,246.10 | 5.29 | 1,000.00 | 1,020.08 | 4.76 | 0.95 | ||||||||||||||||||||||||
Class A | 1,000.00 | 1,244.70 | 6.51 | 1,000.00 | 1,018.99 | 5.86 | 1.17 | ||||||||||||||||||||||||
Class C | 1,000.00 | 1,240.00 | 10.66 | 1,000.00 | 1,015.27 | 9.59 | 1.92 | ||||||||||||||||||||||||
Class Z | 1,000.00 | 1,246.80 | 4.68 | 1,000.00 | 1,020.63 | 4.21 | 0.84 | ||||||||||||||||||||||||
Mid-Cap Value Fund | |||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,310.70 | 5.67 | 1,000.00 | 1,019.89 | 4.96 | 0.99 | ||||||||||||||||||||||||
Class A | 1,000.00 | 1,309.40 | 6.81 | 1,000.00 | 1,018.89 | 5.96 | 1.19 | ||||||||||||||||||||||||
Class C | 1,000.00 | 1,304.20 | 11.25 | 1,000.00 | 1,015.03 | 9.84 | 1.97 | ||||||||||||||||||||||||
Class Z | 1,000.00 | 1,311.70 | 4.87 | 1,000.00 | 1,020.58 | 4.26 | 0.85 | ||||||||||||||||||||||||
Small Cap Value Fund | |||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,284.30 | 6.06 | 1,000.00 | 1,019.49 | 5.36 | 1.07 | ||||||||||||||||||||||||
Class A | 1,000.00 | 1,283.20 | 7.02 | 1,000.00 | 1,018.65 | 6.21 | 1.24 | ||||||||||||||||||||||||
Class C | 1,000.00 | 1,278.40 | 11.13 | 1,000.00 | 1,015.03 | 9.84 | 1.97 | ||||||||||||||||||||||||
Class Z | 1,000.00 | 1,285.50 | 4.87 | 1,000.00 | 1,020.53 | 4.31 | 0.86 | ||||||||||||||||||||||||
Small Cap Diversified Value Fund | |||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,295.40 | 4.55 | 1,000.00 | 1,020.83 | 4.01 | 0.80 | ||||||||||||||||||||||||
Class A | 1,000.00 | 1,294.00 | 5.97 | 1,000.00 | 1,019.59 | 5.26 | 1.05 | ||||||||||||||||||||||||
Class Z | 1,000.00 | 1,296.60 | 4.33 | 1,000.00 | 1,021.03 | 3.81 | 0.76 | ||||||||||||||||||||||||
Global Value Fund | |||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,213.40 | 5.21 | 1,000.00 | 1,020.08 | 4.76 | 0.95 | ||||||||||||||||||||||||
Class A | 1,000.00 | 1,212.60 | 6.58 | 1,000.00 | 1,018.84 | 6.01 | 1.20 |
82
Fund Expense Examples (Unaudited)
Based on Actual Fund Returns | Based on Hypothetical 5% Yearly Returns | ||||||||||||||||||||||||||||||
Beginning Account Value 1/1/21 | Ending Account Value 6/30/21 | Expenses Paid During Period* 1/1/21 - 6/30/21 | Beginning Account Value 1/1/21 | Ending Account Value 6/30/21 | Expenses Paid During Period* 1/1/21 - 6/30/21 | Annualized Expense Ratio | |||||||||||||||||||||||||
International Value Fund | |||||||||||||||||||||||||||||||
Class I | $ | 1,000.00 | $ | 1,156.90 | $ | 5.08 | $ | 1,000.00 | $ | 1,020.08 | $ | 4.76 | 0.95 | % | |||||||||||||||||
International Small Cap Diversified Value Fund | |||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,152.30 | 5.28 | 1,000.00 | 1,019.89 | 4.96 | 0.99 | ||||||||||||||||||||||||
Value Opportunities Fund | |||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,257.30 | 5.15 | 1,000.00 | 1,020.23 | 4.61 | 0.92 | ||||||||||||||||||||||||
Class A | 1,000.00 | 1,255.20 | 6.77 | 1,000.00 | 1,018.79 | 6.06 | 1.21 | ||||||||||||||||||||||||
Class C | 1,000.00 | 1,250.80 | 10.66 | 1,000.00 | 1,015.32 | 9.54 | 1.91 | ||||||||||||||||||||||||
Class Z | 1,000.00 | 1,257.70 | 4.70 | 1,000.00 | 1,020.63 | 4.21 | 0.84 | ||||||||||||||||||||||||
High Yield Fund | |||||||||||||||||||||||||||||||
Class I | 1,000.00 | 1,049.00 | 3.56 | 1,000.00 | 1,021.32 | 3.51 | 0.70 | ||||||||||||||||||||||||
Class A | 1,000.00 | 1,048.30 | 4.62 | 1,000.00 | 1,020.28 | 4.56 | 0.91 | ||||||||||||||||||||||||
Class C | 1,000.00 | 1,044.00 | 8.41 | 1,000.00 | 1,016.56 | 8.30 | 1.66 | ||||||||||||||||||||||||
Class Z | 1,000.00 | 1,049.60 | 3.05 | 1,000.00 | 1,021.82 | 3.01 | 0.60 |
* Expenses are equal to the Funds' annualized expense ratio by class multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year (181), then divided by the number of days in the most recent fiscal year (365).
83
Board Considerations In Approving Continuation of Investment Advisory Agreements
Background and Approval Process. Hotchkis and Wiley Capital Management, LLC (the "Advisor") serves as investment adviser to the Hotchkis and Wiley Diversified Value Fund, the Hotchkis and Wiley Large Cap Value Fund, the Hotchkis and Wiley Mid-Cap Value Fund, the Hotchkis and Wiley Small Cap Value Fund, the Hotchkis and Wiley Small Cap Diversified Value Fund, the Hotchkis and Wiley Global Value Fund, the Hotchkis and Wiley International Value Fund, the Hotchkis and Wiley International Small Cap Diversified Value Fund, the Hotchkis and Wiley Value Opportunities Fund and the Hotchkis and Wiley High Yield Fund (each a "Fund" and collectively, the "Funds") pursuant to separate investment advisory agreements (the "Advisory Agreements") with the Hotchkis and Wiley Funds (the "Trust"). The Advisory Agreements were initially approved by the Board of Trustees at the inception of each Fund and continue thereafter if approved annually by the Board of Trustees of the Trust, including a majority of the Trustees who are not "interested persons" (as defined in the Investment Company Act of 1940, as amended (the "1940 Act")) (the "Independent Trustees"). The Advisory Agreements for each Fund were renewed by the Board at a meeting held in May 2021.
As part of the annual contract review process, the Independent Trustees, through their independent legal counsel, requested and received extensive materials, including information relating to: (i) the nature, extent and quality of services provided by the Advisor, along with compliance with legal requirements, (ii) short-term and longer-term total return of each Fund relative to its respective peer groups and market indices, (iii) the costs of the services provided and the Advisor's estimated profitability with respect to the management of each Fund, (iv) the extent to which the Advisor has in the past or is likely in the future to experience economies of scale in connection with the investment advisory services it provides to each Fund, (v) the expense ratios of each Fund as compared with the expense ratios of funds in its peer group, and (vi) fall-out benefits to the Advisor and its affiliates from its relationship with the Funds. The Independent Trustees also requested and received information related to the Advisor's processes for measuring, managing and monitoring risk. The Independent Trustees noted that the information provided by the Advisor was thorough and responsive to their requests. The information provided in response to their request was in addition to information received by the Board throughout the year, both in writing and during meetings, regarding the Funds, including Fund performance, expense ratios, portfolio composition and regulatory compliance. The Independent Trustees also met with their independent legal counsel prior to the May 2021 Board meeting to review the materials provided by the Advisor and were advised regarding their fiduciary duties pertaining to renewal of investment advisory contracts and the factors they should consider in evaluating advisory agreements. The Independent Trustees, through their legal counsel, then provided follow-up questions to the Advisor which were addressed by the Advisor.
At the May 2021 Board meeting, representatives of the Advisor discussed the Independent Trustees' questions with the Board and responded to further questions. The Board determined that, given the totality of the information provided with respect to the Advisory Agreements, the Board had received sufficient information to renew each Advisory Agreement.
In deciding to approve the renewal of each Advisory Agreement, the Board did not identify any single factor or group of factors as all-important or controlling, and considered a variety of factors in its analysis including those discussed below. The Board did not allot a particular weight to any one factor or group of factors.
Nature, Extent and Quality of Services. As part of the Board's decision-making process, the Board noted that the Advisor and its predecessors have managed the Funds and their predecessors since their inception, and the Board believes that a long-term relationship with a capable, conscientious investment adviser is in the best interests of the Funds. The Board also considered that shareholders invest in a Fund specifically seeking the Advisor's investment expertise and style. The Board also noted that when shareholders invest in a Fund, they know the advisory fee that is paid by the Fund. In this connection, the Board considered, in particular, that each Fund is managed in accordance with its investment objective and policies as disclosed to shareholders.
The Board reviewed information regarding various services provided by the Advisor to the Funds, including an organizational chart and background information on personnel performing such services. The Board also reviewed each Fund's performance and information regarding the Advisor's investment approach, which is driven by team-oriented, in-depth, fundamental research. The Board considered the depth and quality of the Advisor's investment process, the low turnover rates of the Advisor's key personnel, the overall stability of the Advisor's organization, and the experience, capability and integrity of its senior management. The Board considered the portfolio managers' significant investments in the Funds. The Board reviewed the Trust's compliance program and the resultant compliance by the Funds and the Advisor with legal requirements.
The Board also considered other non-advisory services provided to the Funds, such as the services of Advisor employees as Trust officers and other personnel provided that are necessary for Fund operations. The Board noted that the Advisor organizes Board meetings and the preparation of Board meeting materials, and those Advisor employees serving as Trust officers oversee and manage the other Fund service providers.
Based on their review, the Board concluded that the nature, extent and quality of services provided to each Fund under its Advisory Agreement were satisfactory.
Investment Performance of the Funds and the Advisor. The Board noted that it reviews data on the short-term and longer-term total return of the Funds in connection with each quarterly Board meeting. For the contract review meeting, the Board reviewed a report prepared by the Trust's administrator (the "Report") using information provided by Morningstar, Inc., an independent provider of mutual fund data, that compared the total return of Class I shares of each Fund to that of a group of funds that are similar primarily in terms of investment style (each, a "Peer Group"), for the six-month, one-, three-, five- and ten-year periods, as applicable, ended December 31, 2020 and for the three- and six-month, one-, three-, five- and ten-year periods ended March 31, 2021. The Peer Groups were reviewed and selected by the Advisor based on its criteria to determine an appropriate group of competitor funds. In addition, data regarding performance of the Peer Group funds is provided at each quarterly Board meeting.
The Board noted all of the Funds outperformed the average returns of the respective Peer Groups and primary and secondary (for Funds that have secondary benchmarks) indexes for the three- and six-month periods ended March 31, 2021. The Board considered that given the Advisor's emphasis on a value investing style in managing the Funds' investment portfolios, the good short-term performance was expected in a market environment where the growth style had lost its performance advantage over the value style. The Board also considered that the Diversified Value, Large Cap Value, Mid-Cap
84
Value, Small Cap Value, Global Value, International Value and High Yield Funds had underperformed the average return of their respective Peer Groups and applicable primary benchmark (and secondary benchmark for applicable Funds) indexes for the three- and five-year periods ended December 31, 2020. The Board considered that the Small Cap Diversified Value Fund and Value Opportunities Fund had underperformed their respective Peer Group and primary and secondary benchmark indexes for the three-year period, outperformed the average return of their respective Peer Group and secondary benchmark and underperformed their respective primary benchmark for the five-year period ended December 31, 2020. The Board also considered that the International Small Cap Diversified Value Fund had been operational only since June 30, 2020. The Board considered that the Advisor had been consistent in its approach to managing portfolios and that they would expect the Funds to underperform in markets where the growth style outperformed the value style.
Fees, Expenses and Profitability. The Board reviewed expense data using information provided by Morningstar, Inc., contained in the Report, including information regarding applicable expense limitations for the Funds' share classes. The Board reviewed data in the Report showing how the Funds' advisory fees and expense ratios (adjusted to deduct 12b-1 expenses for Peer Group funds) compared to those in their respective Peer Groups. The Board also reviewed information provided by the Advisor on advisory fees charged by the Advisor for sub-advisory services it provides to other mutual funds and advisory fees it charges to its separate account clients with investment objectives and policies similar to those of the Funds. The Board considered a list of the many additional functions performed for the Funds that the Advisor does not perform for its separate account and sub-advisory clients and noted it is generally acknowledged that managing mutual funds subjects an investment adviser to more legal and regulatory risk than is the case with separate accounts.
With respect to the advisory fee for each Fund, the Board noted that the Report showed that the Diversified Value, Large Cap Value, Small Cap Diversified Value and Value Opportunities Funds' advisory fees were higher than the median of their respective Peer Groups, that the Small Cap Value, Global Value and International Small Cap Diversified Value Funds' advisory fees were lower than the median of their respective Peer Groups and that the Mid-Cap Value, International Value and High Yield Funds' advisory fees were the same as the median of their respective Peer Groups. The Board noted that the Advisor uses a fundamental research-intensive process. The Board considered the expense caps put in place by the Advisor (as further described below). The Board noted the quality of the Advisor's investment process and concluded that the advisory fee and expense ratios were fair and reasonable for each Fund.
The Board reviewed information concerning the estimated profitability to the Advisor of the Advisory Agreements, including information regarding the methodology for allocating expenses. The Board reviewed data regarding the Advisor's variable expenses and fixed expenses. The Board considered that in 2020, as in recent prior years, the Advisor had absorbed costs above expense caps for certain of the Funds for which it would not be reimbursed. The Board also noted that the annualized expense ratio was above the expense cap for the Diversified Value, Large Cap Value, Small Cap Diversified Value, Global Value, International Value, and High Yield Funds in 2020. The Board noted that the Advisor has agreed to continue the expense caps for the share classes of each Fund through at least August 31, 2022 and that the Advisor had agreed to improve the expense limitations for the Mid-Cap Value Fund's, Small Cap Value Fund's and Value Opportunities Fund's share classes. The Board also recognized that individual fund or product line profitability of other advisers is generally not publicly available, and that profitability may be affected by numerous factors, so that the comparability of profitability among advisory firms is limited. The Board noted the importance of the Advisor's profitability — which is derived solely from investment management fees — in maintaining its entrepreneurial environment in a private, primarily employee-owned structure. They noted that the Advisor's compensation/profit structure facilitates retention of its management and investment professionals. The Board concluded that the level of estimated profitability to the Advisor under the Advisory Agreements was not unreasonable.
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale. The Board considered information regarding the investment, compliance and client service personnel who have been hired by the Advisor, the Advisor's investment in technology resources and the back-office services outsourced by the Advisor. The Board concluded that the Funds' shareholders share in the additional services, investment in talented employees and technology improvements provided by the Advisor without an increase in advisory fees. The Board also noted that the breakpoints in the Diversified Value, Large Cap Value and Mid-Cap Value Funds' advisory fee schedules can enable shareholders to share in economies of scale.
Indirect Benefits to the Advisor from its Relationship to the Funds. The Board considered information regarding any indirect benefits to the Advisor that could be identified from its relationship to the Funds. In particular, the Board considered that the Advisor has the ability to use commission sharing arrangements that allow the Advisor to pay for third-party research with the equity Funds' soft dollars. The Board considered that the bundled research services and the use of commission sharing arrangements provides valuable information or service to the investment research process, which benefits the Funds (as well as the Advisor who uses (or can use) the research for the benefit of the Advisor's other clients). The Board noted that the ability to use the Funds' soft dollars to obtain third-party research is a fallout benefit to the Advisor.
* * * *
Based on their review, including their consideration of each of the factors referred to above, the Board, including all of the Independent Trustees, concluded that the terms of each Advisory Agreement are fair and reasonable and that the renewal of each Advisory Agreement is in the best interests of each Fund.
85
Statement Regarding Liquidity Risk Management Program
Consistent with Rule 22e-4 under the Investment Company Act of 1940, the Funds have established a liquidity risk management program to govern their approach to managing liquidity risk, i.e., the risk that a Fund could not meet redemption requests without significant dilution of remaining investors' interests in the Fund (the "Program"). The Program is overseen by the Liquidity Risk Management Committee (the "Committee"), a committee comprised of representatives of Hotchkis & Wiley Capital Management, LLC, the Funds' investment adviser. The Funds' Board of Trustees ("Board") has approved the designation of the Committee to oversee the Program. The Program's principal objectives include supporting each Fund's compliance with limits on investments in illiquid assets and mitigating the risk that a Fund will be unable to meet its redemption obligations timely. The Program also includes a number of elements that support the management and assessment of liquidity risk, including an annual assessment of factors that influence a Fund's liquidity and the periodic classification and re-classification of a Fund's investments into groupings that reflect the Committee's assessment of their relative liquidity under current market conditions. At a meeting of the Board on May 18, 2021, the Committee provided a written report to the Board addressing the operation, adequacy, and effectiveness of implementation of the Program for the period of April 1, 2020 through March 31, 2021 (the "Review Period").
During the Review Period, there were no liquidity events that impacted the Funds or their respective ability to timely meet redemptions without dilution to existing shareholders, no Fund breached the 15% limit on illiquid investments, and no material changes were made to the Program. The report concluded that the process for classifying the Funds' portfolio investments is working effectively, each Fund primarily holds assets that are highly liquid, each Fund's liquidity risk is low and the liquidity of each Fund is sufficient to meet anticipated redemptions. The Committee determined, and reported to the Board, that the Program had been implemented and operated in an adequate and effective manner.
There can be no assurance that the Program will achieve its objectives in the future. Please refer to the Funds' Prospectus or Statement of Additional Information for more information regarding a Fund's exposure to liquidity risk and other principal risks to which an investment in a Fund may be subject.
86
Management (Unaudited)
INDEPENDENT TRUSTEES
Name and Year of Birth | Position Held with the Trust | Term of Office* and Length of Time Served | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee During Past Five Years | ||||||||||||||||||
Randall H. Breitenbach (born 1960) | Trustee Chairman | Since 2001 Since 2018 | Founder, Chief Executive Officer and Chairman of Bridge Energy LLC (2017 — present); Chairman Emeritus of Stanford University PIC Endowment (1999 — present); Formerly, Founder, Chief Executive Officer and Chairman of Pacific Coast Energy Company, LP (1988 — 2019); Founder, Chief Executive Officer and Chairman of BreitBurn Energy Company (1988 — 2012). | Ten | BreitBurn Energy Partners, L.P.; Pacific Coast Energy Company, LP | ||||||||||||||||||
Alejandra C. Edwards, Ph.D. (born 1954) | Trustee(a) | Since 2007 | President of Chilean Association of Pension Fund Administrators (2021 — present); Member of Queens Care's Investment Committee (2017 — present); Formerly, California State University — Long Beach: Professor of Economics (1994 – 2015). | Ten | None | ||||||||||||||||||
Marcy Elkind, Ph.D. (born 1947) | Trustee Vice Chair | Since 2005 Since 2018 | President, Elkind Economics, Inc. (1980 — present). | Ten | None | ||||||||||||||||||
Robert Fitzgerald (born 1952) | Trustee(b) | Since 2005 | Retired. Formerly, Chief Financial Officer of National Retirement Partners, Inc. (2005 — 2007); Executive Vice President and Chief Financial Officer of PIMCO Advisors L.P. (1995 — 2001). | Ten | Independent Trustee, Brandes Investment Trust (7 portfolios) | ||||||||||||||||||
H. Thomas Hicks (born 1950) | Trustee(c) | Since 2017 | Retired. Formerly, Chief Financial Officer, URS Corporation (2005 — 2015). | Ten | Aptim Corp. |
* Each Independent Trustee serves until his or her successor is elected and qualified or until his or her death or resignation or removal as provided in the Trust's Agreement and Declaration of Trust.
(a) Chair of the Nominating and Governance Committee.
(b) Chair of the Audit Committee.
(c) Vice Chair of the Audit Committee.
INTERESTED TRUSTEE
Name and Year of Birth | Position Held with the Trust | Term of Office** and Length of Time Served | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee During Past Five Years | ||||||||||||||||||
George H. Davis, Jr.* (born 1961) | Trustee | Since 2007 | Chief Executive Officer and Portfolio Manager of Hotchkis & Wiley Capital Management, LLC (the "Advisor") (2001 — present). | Ten | None |
* Mr. Davis is an "interested person," as defined in the 1940 Act, of the Trust based on his position as Chief Executive Officer and Portfolio Manager of the Advisor.
** As Trustee, Mr. Davis serves until his successor is elected and qualified or until his death or resignation or removal as provided in the Trust's Agreement and Declaration of Trust.
OFFICERS
Name and Year of Birth | Position Held with the Trust | Term of Office* and Length of Time Served | Principal Occupation(s) During Past Five Years | ||||||||||||
Anna Marie Lopez (born 1967) | President | Since 2007 | Chief Operating Officer of the Advisor (2007 — present). | ||||||||||||
Mark McMahon (born 1968) | Vice President and Secretary | Since 2006 | Managing Director, Mutual Fund Operations of the Advisor (2006 — present). | ||||||||||||
James Menvielle (born 1972) | Vice President and Treasurer | Since 2007 | Chief Financial Officer of the Advisor (2006 — present). | ||||||||||||
Stacey Gillespie (born 1974) | Chief Compliance Officer | Since 2021 | Director and Chief Compliance Officer of Cipperman Compliance Services (2015 — present). |
* Each officer is appointed by and serves at the pleasure of the Board of Trustees of the Trust.
The Statement of Additional Information includes additional information about the Trust's Trustees and officers, and is available without charge upon request by calling the transfer agent at 1-866-HW-FUNDS (1-866-493-8637). The address for all Trustees and officers of the Trust, except Stacey Gillespie, is c/o Hotchkis & Wiley Capital Management, LLC, 601 South Figueroa Street, 39th Floor, Los Angeles, CA 90017, attention: Trust Secretary. The address for Stacey Gillespie is c/o Cipperman Compliance Services, 480 East Swedesford Road, Suite 220, Wayne, PA 19087.
87
Information about the Funds
ADVISOR
Hotchkis & Wiley Capital Management, LLC
601 South Figueroa Street, 39th Floor
Los Angeles, California 90017
LEGAL COUNSEL
Vedder Price P.C.
222 North LaSalle Street, Suite 2600
Chicago, Illinois 60601
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
555 West 5th Street, Suite 2700
Los Angeles, California 90013
DISTRIBUTOR
Quasar Distributors, LLC
111 East Kilbourn Avenue, Suite 2200
Milwaukee, Wisconsin 53202
ADMINISTRATOR AND TRANSFER AGENT
U.S. Bancorp Fund Services, LLC
615 East Michigan Street, 3rd Floor
Milwaukee, Wisconsin 53202
CUSTODIAN
Brown Brothers Harriman & Co.
50 Post Office Square
Boston, Massachusetts 02110
This report is for the information of shareholders of the Hotchkis & Wiley Funds, but may also be used as sales literature when preceded or accompanied by a current prospectus, which gives details about charges, expenses, investment objectives and operating policies of the Funds.
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is included in the Statement of Additional Information, which is available without charge, upon request, by calling 1-866-HW-FUNDS (1-866-493-8637) and on the Securities and Exchange Commission's ("SEC") website at http://www.sec.gov.
Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge on the Funds' website at www.hwcm.com and on the SEC's website at http://www.sec.gov.
Hotchkis & Wiley Funds files a complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT. The Funds' Forms N-PORT are available free of charge on the Funds' website at www.hwcm.com and on the SEC's website at http://www.sec.gov.
601 SOUTH FIGUEROA STREET, 39th Floor
LOS ANGELES, CALIFORNIA 90017-5704
www.hwcm.com
1.866.HW.FUNDS (1.866.493.8637)
CODE #HWF-AR-0621-0821
JUNE 30, 2021
ANNUAL REPORT
(b) | Not applicable. |
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any substantive amendments to its code of ethics during the period covered by this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report. A copy of the code of ethics is available without charge, upon request, by calling toll-free at 1-800-796-5606.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees (the “Board”) has determined that Robert Fitzgerald, a member of the registrant’s Audit Committee, is an “audit committee financial expert” and “independent,” as such terms are defined in this Item. This designation will not increase the designee’s duties, obligations or liability as compared to his duties, obligations and liability as a member of the Audit Committee and of the Board; nor will it reduce the responsibility of the other Audit Committee members. The Board believes each member of the Audit Committee contributes significantly to the effective oversight of the registrant’s financial statements and condition.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. The principal accountant did not provide any other services. The following table details the aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
FYE 6/30/2021 | FYE 6/30/2020 | |||||||
(a) Audit Fees | $ | 209,500 | $ | 208,682 | ||||
(b) Audit-Related Fees | $ | 0 | $ | 5,000 | ||||
(c) Tax Fees | $ | 0 | $ | 0 | ||||
(d) All Other Fees | $ | 0 | $ | 0 |
(e)(1) The registrant’s Audit Committee (the “Committee”) has adopted policies and procedures with regard to the pre-approval of services. The Committee shall pre-approve any engagements of the independent auditors to provide any non-prohibited services to the registrant, including the fees and other compensation to be paid to the independent auditors. The Chairman of the Committee may grant the pre-approval of services to the registrant for non-prohibited services for engagements of less than $5,000. The Committee shall also pre-approve any engagement of the independent auditors, including the fees and other compensation to be paid to the independent auditors, to provide any non-audit services to the registrant’s investment adviser, Hotchkis & Wiley Capital Management, LLC (the “Advisor”) (or any “control affiliate” of the Advisor providing ongoing services to the registrant), if the engagement relates directly to the operations and financial reporting of the registrant. The Chairman of the Committee may grant the pre-approval for non-prohibited services to the Advisor for engagements of less than $5,000. All such delegated pre-approvals shall be presented to the Committee no later than the next Committee meeting.
(e)(2) The percentage of fees billed by Deloitte & Touche LLP (“D&T”) applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
FYE 6/30/2021 | FYE 6/30/2020 | |||||||
Audit-Related Fees | 0 | % | 0 | % | ||||
Tax Fees | 0 | % | 0 | % | ||||
All Other Fees | 0 | % | 0 | % |
(f) All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full-time permanent employees of the principal accountant.
(g) During the last two fiscal years, D&T has served as the auditor to the Advisor and/or affiliates of the Advisor, and has rendered non-audit services to the Advisor and/or affiliates of the Advisor. The non-audit services that D&T provided to the Advisor and/or affiliates of the Advisor in 2021 and 2020 consisted of preparing state and federal tax returns. D&T charged $162,000 and $135,050 for such non-audit services to the Advisor and/or affiliates of the Advisor for 2021 and 2020, respectively. None of the non-audit services provided by D&T to the Advisor and/or affiliates of the Advisor directly related to the operations or financial reporting of the registrant.
(h) The Committee has considered whether the provision of audit and non-audit services that were rendered to the Advisor and any entity controlling, controlled by or under common control with the Advisor is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.
(i) The registrant has not been identified by the U.S. Securities and Exchange Commission as having filed an annual report issued by a registered public accounting firm branch or office that is located in a foreign jurisdiction where the Public Company Accounting Oversight Board is unable to inspect or completely investigate because of a position taken by an authority in that jurisdiction.
(j) The registrant is not a foreign issuer.
Item 5. Audit Committee of Listed Registrants.
Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
Item 6. Investments.
(a) | Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form. |
(b) | Not applicable. |
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
The identification and recommendation of individuals for Board membership is the responsibility of the Nominating and Governance Committee. Shareholders may submit suggestions for candidates by forwarding their correspondence by U.S. mail or other courier service to the registrant’s Secretary for the attention of the Chair of the Nominating and Governance Committee, 601 South Figueroa Street, 39th Floor, Los Angeles, CA 90017-5704.
Item 11. Controls and Procedures.
(a) | The registrant’s President / Principal Executive Officer and Treasurer / Principal Financial Officer have reviewed the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to them by others within the registrant and by the registrant’s service provider. |
(b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. |
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Exhibits.
(a) | (1) Any code of ethics or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy Item 2 requirements through filing an exhibit. Available without charge, upon request, by calling toll-free at 1-800-796-5606. |
(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable to open-end investment companies.
(4) Change in the registrant’s independent public accountant. There was no change in the registrant’s independent public accountant for the period covered by this report.
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) | Hotchkis & Wiley Funds |
By (Signature and Title) | /s/ Anna Marie Lopez |
Anna Marie Lopez, President / Principal Executive Officer |
Date | August 25, 2021 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By (Signature and Title) | /s/ Anna Marie Lopez |
Anna Marie Lopez, President / Principal Executive Officer |
Date | August 25, 2021 |
By (Signature and Title) | /s/ James Menvielle |
James Menvielle, Treasurer / Principal Financial Officer |
Date | August 25, 2021 |