Investment Strategies
Small-Mid Cap Quality Value Portfolio (Institutional)
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Small-Mid Cap Quality Value Fact Sheet

Small-Mid Cap Quality Value Portfolio (Institutional)

Managers

Julie Kutasov Portfolio Manager and Senior Research Analyst
Craig Stone Co-Chief Investment Officer, Portfolio Manager and Senior Research Analyst
    Introduction
    Highlights
    Top Five Holdings
    Sector Diversification
    Portfolio Characteristics
    Historical Returns
    Performance Statistics

The KAR Small-Mid Cap Quality Value Portfolio is a domestic small and mid-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: Small-Mid Cap Equity
Primary Index: Russell 2500 Value Index
Inception Date: January 1, 2008
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 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 (%)
W. R. Berkley 5.7
Lennox International 4.8
TransUnion 4.6
Broadridge Financial Solutions 4.4
Graco 4.2
Total 23.7

Sector Diversification

As of March 31, 2024
KAR Small-Mid Cap Quality Value
Russell 2500TM 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 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-Mid 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
Small-Mid
Cap Quality
Value

Russell 2500TM
Value Index
Quality
Return on Equity-Past 5 Years 25.3% 12.8%
Debt/EBITDA 1.5x 2.5x
Earnings Variability-Past 10 Years 36.2% 76.3%
Growth
Earnings Per Share Growth-Past 5 Years 7.2% 11.6%
Earnings Per Share Growth-Past 10 Years 11.2% 9.4%
Dividend Per Share Growth-Past 5 Years 8.9% 6.6%
Dividend Per Share Growth-Past 10 Years 12.7% 7.3%
Capital Generation--[ROE x (1-Payout)] 18.1% 9.4%
Value
P/E Ratio-Trailing 12 Months 33.6x 26.7x
Dividend Yield 1.0% 1.8%
Free Cash Flow Yield* 3.7% 4.3%
Market Characteristics
$ Weighted Average Market Cap-3 Year Avg $10.3 B $6.8 B
Largest Market Cap-3 Year Avg $32.7 B $25.0 B

Historical Returns (Institutional)

*January 1, 2008

†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 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 Small-Mid Cap Quality Value fact sheet utilizes an assumed maximum fee across the firm’s business units, which is further detailed on that page.

This material is deemed supplemental and complements the performance and disclosure on the Disclosure page of the KAR Small-Mid 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 Small-Mid 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 Small-Mid Cap
Quality Value (gross)		 KAR Small-Mid Cap
Quality Value
(net)‡		 Russell 2500TM
Value Index
Annualized Returns (%)† As of March 31, 2024
1st Quarter6.736.516.07
1 Year20.4119.4021.33
3 Year2.942.075.36
5 Year12.3111.369.38
7 Year10.589.657.74
10 Year10.739.807.68
Inception*11.7110.778.23
Annual Returns (%)
202317.6816.6915.98
2022(19.94)(20.63)(13.08)
202122.1821.1627.78
202024.6923.654.88
201933.2032.0923.56
2018(11.97)(12.73)(12.36)
201718.4317.4410.36
201619.6918.6925.20
2015(0.58)(1.42)(5.49)
20148.887.967.11
201336.3035.1733.32
201211.0110.0719.21
20117.406.49(3.36)
201025.8324.7924.82
200932.5131.4127.68
2008(18.99)(19.69)(31.99)

Performance Statistics (Institutional)

Inception*  to March 31, 2024

*January 1, 2008

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

KAR Small-Mid
Cap Quality
Value (net)

Russell 2500TM
Value Index
Alpha 4.25 3.37 0.00
Sharpe Ratio 0.60 0.55 0.36
Information Ratio 0.53 0.38 N/A
Beta 0.84 0.84 1.00
Downside Capture 76.99 78.40 100.00
Tracking Error 6.62 6.62 N/A