Investment Strategies
Large Cap Quality Value Portfolio (Institutional)
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Large Cap Quality Value Portfolio (Institutional)

Managers

Richard Sherry, CFA Portfolio Manager and Senior Research Analyst
    Introduction
    Highlights
    Top Five Holdings
    Sector Diversification
    Portfolio Characteristics
    Historical Returns
    Performance Statistics

The KAR Large Cap Quality Value Portfolio is a domestic large-cap portfolio that invests in high-quality value companies purchased at attractive valuations. It is a high-conviction strategy that utilizes a bottom-up fundamental research approach to identify what we believe are the best companies at the most attractive prices within the high-quality universe.

Highlights

Asset Class: Large Cap Equity
Primary Index: Russell 1000 Value Index
Inception Date: October 1, 1994
Holdings Range: 25-40

 

Sector Constraint: Seek broad diversification, but no sector constraints
Non-U.S. Holdings: Up to 20%
Portfolio Turnover: 25% – 35%

Top Five Holdings

As of September 30, 2024

This report is based on the assumptions and analysis made and believed to be reasonable by Advisor. However, no assurance can be given that Advisor’s opinions or expectations will be correct. This report is intended for informational purposes only and should be not considered a recommendation or solicitation to purchase securities. Holdings are subject to change. Holdings and weightings are based on a representative portfolio. Individual Investors’ holdings may differ slightly. Data is obtained by FactSet Research Systems and is assumed to be reliable. Numbers may not always add up due to rounding. Past performance is no guarantee of future results.

Company

Percent of equity (%)
Oracle 6.4
Trane Technologies 6.0
PNC Financial Services Group 4.9
Linde 4.8
Lowe's Companies 3.9
Total 26.0

Sector Diversification

As of September 30, 2024
KAR Large Cap Quality Value
Russell 1000® Value Index

Holdings are subject to change. Holdings and weightings are based on a representative portfolio. Individual Investors’ holdings may differ slightly. The sector information represented above is based on GICS sector classifications. Data is obtained by FactSet Research Systems and is assumed to be reliable.

Portfolio Characteristics

As of September 30, 2024

*Free cash flow data is as of [quarter end date]. Prices are as of [quarter end date]. Excludes financials.

KAR utilizes the interquartile method when calculating Debt/EBITDA. The interquartile method excludes outliers from an aggregate statistic such as weighted average. The interquartile method does not assume that data from the top or bottom of the distribution are outliers—only the extreme ends are excluded—and that it can be applied consistently as a quantitative method for most fundamental characteristics. Debt/EBITDA utilizes net debt for the calculation.
This material is deemed supplemental and complements the performance and disclosure at the end of the Disclosure page of the KAR Large Cap Quality Value fact sheet. Data is obtained from FactSet Research Systems and BNY Mellon and is assumed to be reliable. Other principal consultant firms may use different algorithms to calculate selected statistics. Estimates are based on certain assumptions and historical information. Past performance is no guarantee of future results. Returns could be reduced, or losses incurred, due to currency fluctuations.
Concept

KAR Large
Cap Quality
Value

Russell 1000®
Value Index
Quality
Return on Equity-Past 5 Years 20.2% 17.1%
Debt/EBITDA 1.8x 2.1x
Earnings Variability-Past 10 Years 29.8% 50.8%
Growth
Earnings Per Share Growth-Past 5 Years 13.3% 11.9%
Earnings Per Share Growth-Past 10 Years 11.0% 8.8%
Dividend Per Share Growth-Past 5 Years 10.4% 7.4%
Dividend Per Share Growth-Past 10 Years 11.7% 8.3%
Capital Generation--[ROE x (1-Payout)] 12.1% 10.1%
Value
P/E Ratio-Trailing 12 Months 27.9x 23.8x
Dividend Yield 1.5% 2.0%
Free Cash Flow Yield* 3.2% 3.8%
Market Characteristics
$ Weighted Average Market Cap $136.1 B $172.4 B

Historical Returns (Institutional)

*Period from April 1, 2006 to [quarter end date]. This period delineates the period that Richard Sherry, CFA has managed the portfolio as the sole portfolio manager.

†All periods less than one year are total returns and are not annualized. Returns are final.

‡Net of all fees and expenses. Assumes a 0.60% annual fee. Fees presented on the Disclosure page of the KAR Large Cap Quality Value fact sheet could vary from the assumed fee in the net-of-fee calculation, as actual fees paid by a particular client account differ depending on a variety of factors including, but not limited to, business unit and size of mandate. The fee used on the Disclosure page of the KAR Large Cap Quality Value fact sheet utilizes an assumed maximum fee across the firm’s business units, which is further detailed on that page.

||Performance calculations are for the nine months ended December 31, 2006.
This material is deemed supplemental and complements the performance and disclosure on the Disclosure page of the KAR Large Cap Quality Value fact sheet. Returns of the Kayne Anderson Rudnick composite are final. For further details on the composite, please see the Disclosure page of the KAR Large Cap Quality Value fact sheet. Data is obtained from FactSet Research Systems and is assumed to be reliable. Past performance is no guarantee of future results. Returns could be reduced, or losses incurred, due to currency fluctuations.
Period KAR Large Cap
Quality Value (gross)		 KAR Large Cap
Quality Value (net)‡		 Russell 1000®
Value Index
Annualized Returns (%)† As of September 30, 2024
3rd Quarter9.71 9.55 9.43
Year to Date19.18 18.65 16.68
1 Year31.26 30.49 27.76
3 Year9.59 8.94 9.03
5 Year12.02 11.36 10.69
7 Year12.30 11.64 9.53
10 Year10.96 10.30 9.23
Inception*9.39 8.74 7.94
Annual Returns (%)
202311.69 11.03 11.46
2022(10.99)(11.53)(7.54)
202125.08 24.35 25.16
202013.14 12.47 2.80
201929.61 28.85 26.54
2018(3.90)(4.47)(8.27)
201718.58 17.88 13.66
201610.70 10.04 17.34
2015(3.09)(3.67)(3.83)
201413.88 13.20 13.45
201329.95 29.19 32.53
201213.63 12.96 17.51
20111.65 1.04 0.39
201014.30 13.62 15.51
200926.02 25.28 19.69
2008(30.58)(31.01)(36.85)
20071.45 0.84 (0.17)
2006||14.21 13.71 15.40

Performance Statistics (Institutional)

Tenure Period* through September 30, 2024

*Period from April 1, 2006 to [quarter end date]. This period delineates the period that Richard Sherry, CFA has managed the portfolio as the sole portfolio manager.

This material is deemed supplemental and complements the performance and disclosure on the Disclosure page of the KAR Large Cap Quality Value fact sheet. Returns of the Kayne Anderson Rudnick composite are final. For further details on the composite, please see the Disclosure page of the KAR Large Cap Quality Value fact sheet. Past performance is no guarantee of future results. Returns could be reduced, or losses incurred, due to currency fluctuations.
Concept

KAR Large Cap
Quality Value (gross)

KAR Large Cap
Quality Value (net)

Russell 1000®
Value Index
Annualized Standard Deviation 14.54 14.54 15.94
Alpha 2.06 1.45 0.00
Beta 0.88 0.88 1.00
Sharpe Ratio 0.54 0.50 0.41
R-Squared 92.59 92.59 100.00