Small-Mid Cap Core Portfolio (Institutional)

Small-Mid Cap Core Portfolio (Institutional)

    Introduction
    Highlights
    Top Five Holdings
    Sector Diversification
    Portfolio Characteristics
    Historical Returns
    Performance Statistics

The KAR Small-Mid Cap Core Portfolio is a domestic small and mid-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-Mid Cap Equity

Primary Index: Russell 2500 Index

Inception Date: April 1, 1992

Holdings Range: 25-35

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 December 31, 2023

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 (%)

Bentley Systems 5.2
POOLCORP 4.8
Cooper Companies 4.4
Lennox International 4.4
Nordson 4.1
Total 23.0

Sector Diversification

As of December 31, 2023
KAR Small-Mid Cap Core
Russell 2500TM 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 December 31, 2023

*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-Mid 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-
Mid Cap
Core

Russell
2500TM
Index

Quality
Return on Equity-Past 5 Years 21.8% 13.3%
Debt/EBITDA 1.6x 2.3x
Earnings Variability-Past 10 Years 43.0% 72.8%
Growth
Earnings Per Share Growth-Past 5 Years 16.4% 14.2%
Earnings Per Share Growth-Past 10 Years 12.9% 10.3%
Capital Generation--[ROE x (1-Payout)] 17.4% 10.4%
Value
P/E Ratio-Trailing 12 Months 35.9x 31.5x
Dividend Yield 0.7% 1.5%
Free Cash Flow Yield* 3.5% 3.4%
Market Characteristics
$ Weighted Average Market Cap-3 Year Avg $14.7 B $6.7 B
Largest Market Cap-3 Year Avg $35.1 B $26.6 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 0.85% annual fee. Fees presented on the Disclosure page of the KAR Small-Mid 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-Mid 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-Mid Cap Core fact sheet. Returns of the Kayne Anderson Rudnick composite are final. For periods prior to July 1, 2000, the Small-Mid Cap Core composite calculations have been linked to the firm’s Small Cap Core composite performance, which represents all taxable and nontaxable, fully discretionary Small Cap Core Portfolios (including cash) under management for at least one full quarter. Beginning on July 1, 2000, only Small-Mid Cap Core Portfolios are included in the composite. For further details on the composite, please see the disclosure statement in this presentation. For further details on the composite, please see the Disclosure page of the KAR Small-Mid 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-Mid Cap
Core
(gross)
KAR Small-Mid Cap
Core
(net)
Russell 2500TM
Index
Annualized Returns (%) As of December 31, 2023
4th Quarter12.1811.9513.35
1 Year24.9323.8917.42
3 Year5.074.194.24
5 Year17.3616.3811.67
7 Year14.3513.398.98
10 Year13.3312.388.36
Inception*11.7410.8010.29
Annual Returns (%)
202324.9323.8917.42
2022(23.14)(23.80)(18.37)
202120.8119.8018.18
202036.3435.2119.99
201940.7739.6127.77
2018(4.17)(4.98)(10.00)
201719.8418.8416.81
201617.3016.3217.59
20156.165.27(2.90)
20149.748.817.07
201331.6130.5236.80
20128.827.9017.88
20118.457.54(2.51)
201020.4619.4526.71
200930.5829.5034.39
2008(30.20)(30.81)(36.79)
20070.35(0.50)1.38
200613.8312.8816.17
20053.132.268.11
200414.1913.2318.29
200324.8123.7845.51
2002(16.98)(17.69)(17.80)
20015.064.171.22
200023.8022.774.27
19996.095.2024.14
199821.3920.380.38
199720.8219.8224.36
199627.0025.9519.03
199517.4716.4931.70
19942.751.88(1.05)
199320.0019.0016.55
1992||9.658.9611.36

Performance Statistics (Institutional)

Ten Years Ending December 31, 2023

This material is deemed supplemental and complements the performance and disclosure on the Disclosure page of the KAR Small-Mid 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-Mid 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-Mid
Cap Core (gross)

KAR Small-Mid
Cap Core (net)

Russell 2500TM
Index

Alpha 5.52 4.63 0.00
Sharpe Ratio 0.68 0.63 0.38
Information Ratio 0.73 0.59 N/A
Beta 0.87 0.87 1.00
Downside Capture 79.06 80.62 100.00
Tracking Error 6.81 6.81 N/A