Small Cap Core Portfolio (Institutional)

Managers

Todd Beiley, CFA Head of Research, Portfolio Manager and Senior Research Analyst

Jon K. Christensen, CFA Portfolio Manager and Senior Research Analyst

Introduction

Highlights

Top Five Holdings

Sector Diversification

Portfolio Characteristics

Historical Returns

Performance Statistics

The KAR Small Cap Core Portfolio is a domestic small-cap portfolio that invests in high-quality 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: Small Cap Equity
Primary Index: Russell 2000 Index
Inception Date: April 1, 1992
Holdings Range: 20-40
Sector Constraint: Seek broad diversification, but no sector constraints

Non-U.S. Holdings: Up to 20%
Portfolio Turnover: 25% – 35%

Listen to the latest episode of our stock market podcast, KayneCast, for more insights on our Small Cap Core portfolio.

Top Five Holdings

As of March 31, 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 (%)
EMCOR Group	10.1
Simpson Manufacturing	8.6
FTI Consulting	6.6
Primerica	6.2
CorVel	4.4
Total	36.0

Sector Diversification

As of March 31, 2024

Communication Services

Consumer Discretionary

Consumer Staples

Energy

Financials

Health Care

Industrials

Information Technology

Materials

Real Estate

Utilities

15%

30%

45%

60%

75%

KAR Small Cap Core

Russell 2000^® 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 March 31, 2024

*Free cash flow data is as of [prior 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 Small Cap Core 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 Small Cap Core	Russell 2000^® Index
Quality
Return on Equity-Past 5 Years	25.1%	9.9%
Debt/EBITDA	0.5x	2.1x
Earnings Variability-Past 10 Years	30.6%	85.2%
Growth
Earnings Per Share Growth-Past 10 Years	14.6%	11.2%
Dividend Per Share Growth-Past 10 Years	13.2%	5.3%
Capital Generation--[ROE x (1-Payout)]	18.6%	8.3%
Value
P/E Ratio-Trailing 12 Months	27.0x	40.3x
Dividend Yield	1.1%	1.3%
Free Cash Flow Yield*	4.5%	2.6%
Market Characteristics
$ Weighted Average Market Cap-3 Year Avg	$7.0 B	$3.1 B
Largest Market Cap-3 Year Avg	$19.6 B	$16.8 B

Historical Returns (Institutional)

*April 1, 1992

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

‡Net of all fees and expenses. Assumes a 0.90% annual fee. Fees presented on the Disclosure page of the KAR Small Cap Core 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 Small Cap Core 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, 1992.

This material is deemed supplemental and complements the performance and disclosure on the Disclosure page of the KAR Small Cap Core 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 Small Cap Core 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 Small Cap Core (gross)	KAR Small Cap Core (net)^‡	Russell 2000^® Index
Annualized Returns (%)^† As of March 31, 2024
1st Quarter	8.30	8.06	5.18
1 Year	31.00	29.85	19.71
3 Year	13.47	12.46	(0.10)
5 Year	17.43	16.39	8.10
7 Year	19.38	18.32	7.73
10 Year	17.28	16.24	7.58
Inception*	14.14	13.12	9.09
Annual Returns (%)
2023	33.95	32.77	16.93
2022	(9.92)	(10.74)	(20.44)
2021	19.24	18.18	14.82
2020	23.17	22.08	19.96
2019	40.88	39.65	25.52
2018	(0.83)	(1.72)	(11.01)
2017	36.61	35.42	14.65
2016	19.10	18.05	21.31
2015	2.37	1.45	(4.41)
2014	7.51	6.55	4.89
2013	30.10	28.96	38.82
2012	13.42	12.42	16.35
2011	10.14	9.16	(4.18)
2010	25.00	23.90	26.85
2009	32.09	30.93	27.17
2008	(27.64)	(28.30)	(33.79)
2007	3.16	2.24	(1.57)
2006	13.43	12.43	18.37
2005	7.78	6.82	4.55
2004	23.37	22.28	18.33
2003	34.34	33.17	47.25
2002	(12.74)	(13.53)	(20.48)
2001	6.16	5.21	2.49
2000	21.38	20.30	(3.02)
1999	6.09	5.15	21.26
1998	21.39	20.32	(2.55)
1997	20.82	19.76	22.36
1996	27.00	25.89	16.49
1995	17.47	16.43	28.45
1994	2.75	1.83	(1.82)
1993	20.00	18.94	18.88
1992^\|\|	9.65	8.92	10.16

Performance Statistics (Institutional)

Inception^* to March 31, 2024

*April 1, 1992

This material is deemed supplemental and complements the performance and disclosure on the Disclosure page of the KAR Small Cap Core 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 Small Cap Core fact sheet. **Past performance is no guarantee of future results.** Returns could be reduced, or losses incurred, due to currency fluctuations.
Concept	KAR Small Cap Core (gross)	KAR Small Cap Core (net)	Russell 2000^® Index
Alpha	6.53	5.58	0.00
Sharpe Ratio	0.76	0.69	0.34
Information Ratio	0.53	0.43	N/A
Beta	0.70	0.70	1.00
Downside Capture	55.98	57.55	100.00
Tracking Error	9.46	9.46	N/A

Small Cap Core Portfolio (Institutional)

Managers

Top Five Holdings

Company

Percent of equity (%)

Sector Diversification

Portfolio Characteristics

KAR SmallCap Core

Russell 2000®Index

Historical Returns (Institutional)

KAR Small CapCore (gross)

KAR Small CapCore (net)‡

Russell 2000®Index

Performance Statistics (Institutional)

KAR SmallCap Core (gross)

KAR SmallCap Core (net)

Russell 2000®Index

KAR Small
Cap Core

Russell 2000^®
Index

KAR Small Cap
Core (gross)

KAR Small Cap
Core (net)^‡

Russell 2000^®
Index

KAR Small
Cap Core (gross)

KAR Small
Cap Core (net)

Russell 2000^®
Index