Investment Strategies
Thematic Quality Portfolio (Institutional)
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Thematic Quality Fact Sheet

Thematic Quality Portfolio (Institutional)

Managers

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

The KAR Thematic Quality Portfolio is a thematic quality 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: Thematic Quality
Primary Index: S&P 500 Index
Inception Date: January 1, 2023
Holdings Range: 20-35
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, 2025

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 (%)
Celsius Holdings 11.7
Cloudflare 11.6
Tesla 9.7
Confluent 7.9
Microsoft 7.3
Total 48.2

Sector Diversification

As of March 31, 2025
KAR Thematic Quality
S&P 500® 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, 2025

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 Thematic Quality 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
Thematic
Quality

S&P® 500
Index
Gross Margin—Past 5 Years 50.9% 50.0%
Capital Expenditures (as % of Sales) 6.2% 8.0%
Sales Per Share Growth—Past 2 Years 21.1% 9.4%
Sales Per Share Growth—Past 5 Years 21.9% 11.5%
Debt/EBITDA 0.5x 1.1x

Historical Returns (Institutional)

*January 1, 2023

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

‡Net of all fees and expenses. Assumes a 0.75% annual fee. Fees presented on the Disclosure page of the KAR Thematic Quality 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 Thematic Quality 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 Thematic Quality 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 Thematic Quality 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 Thematic
Quality (gross)		 KAR Thematic
Quality (net)‡		 S&P® 500 Index
Annualized Returns (%)† As of March 31, 2025
1st Quarter(10.82)(11.00)(4.27)
1 Year(7.16)(7.86)8.25
Inception*16.2015.3420.15
Annual Returns (%)
202410.9010.0725.02
202341.7740.7326.29

Performance Statistics (Institutional)

Inception*  to March 31, 2025

*January 1, 2023

This material is deemed supplemental and complements the performance and disclosure on the Disclosure page of the KAR Thematic Quality 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 Thematic Quality fact sheet. Past performance is no guarantee of future results. Returns could be reduced, or losses incurred, due to currency fluctuations.
Concept

KAR Thematic
Quality (gross)

KAR Thematic
Quality (net)

S&P® 500
Index
Alpha (6.31) (7.01) 0.00
Sharpe Ratio 0.42 0.38 1.16
Information Ratio (0.20) (0.24) N/A
Beta 1.39 1.39 1.00
Downside Capture 131.59 133.82 100.00
Tracking Error 20.04 20.04 N/A