PROSPECTUS
PZENA MID CAP VALUE
FUND
Investor
Class PZVMX
Institutional
Class PZIMX
PZENA SMALL CAP VALUE
FUND
Investor
Class PZVSX
Institutional
Class PZISX
PZENA EMERGING MARKETS
VALUE FUND
Investor
Class PZVEX
Institutional
Class PZIEX
PZENA INTERNATIONAL SMALL
CAP VALUE FUND
Investor
Class PZVIX
Institutional
Class PZIIX
PZENA INTERNATIONAL VALUE
FUND
Investor
Class PZVNX
Institutional
Class PZINX
June
28, 2024
The
U.S. Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy or adequacy of this Prospectus. Any
representation to the contrary is a criminal offense.
TABLE
OF CONTENTS
Investment
Objective
The
Pzena Mid Cap Value Fund (the “Mid Cap Fund” or “Fund”)
seeks to achieve long-term capital appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund. You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the table
and example below.
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Investor Class |
Institutional Class |
SHAREHOLDER
FEES
(fees
paid directly from your investment)
|
None |
None |
ANNUAL
FUND OPERATING EXPENSES
(expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
0.80 |
% |
0.80 |
% |
Distribution
and Service (Rule 12b-1) Fees |
0.25 |
% |
None |
Other
Expenses (includes Shareholder Servicing Plan Fee) |
0.29 |
% |
0.19 |
% |
Shareholder
Servicing Plan Fee |
0.10% |
None |
Total
Annual Fund Operating Expenses(1) |
1.34 |
% |
0.99 |
% |
Less:
Fee Waiver and/or Expense Reimbursement(2) |
-0.09 |
% |
-0.09 |
% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
1.25 |
% |
0.90 |
% |
(1)Total
Annual Fund Operating Expenses reflect the maximum Rule 12b-1 fee and/or
Shareholder Servicing Plan fee allowed, while the Expense Ratios in the
Financial Highlights section of the statutory prospectus reflect actual
operating expenses of the Mid Cap Fund.
(2)Pzena
Investment Management, LLC (the “Adviser”) has contractually agreed to waive a
portion or all of its management fees and pay Mid Cap Fund expenses to ensure
that Total Annual Fund Operating Expenses (excluding AFFE, interest expense,
taxes, dividends on securities sold short, extraordinary expenses, Rule 12b-1
fees, shareholder servicing fees and any other class-specific expenses) do not
exceed 0.90% of average daily net assets of the Fund (the “Expense Cap”). The
Expense Cap will remain in effect through at least June 28,
2025, and may be terminated only by the Fund’s Board of Trustees
(the “Board”). The Adviser may request recoupment of previously waived fees and
paid expenses from the Fund for 36 months from the date they were waived and
paid, subject to the Expense Cap.
Example. This Example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same (taking into account the Expense Cap only in
the first year). Although your actual costs may be higher
or lower, based on these assumptions your costs would be:
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| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class |
$127 |
$416 |
$725 |
$1,605 |
Institutional
Class |
$92 |
$306 |
$538 |
$1,205 |
Portfolio
Turnover. The
Mid Cap Fund pays transaction costs, such as commissions, when it buys and sells
securities (or “turns over” its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in
annual fund operating expenses or in the Example, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was
39% of the average
value of its portfolio.
Principal Investment
Strategies
Under normal
market conditions, the Mid Cap Fund invests at least 80% of its net assets (plus
any borrowings for investment purposes) in stocks of “mid-cap”
companies. The Fund defines a “mid-cap” company as an issuer
whose market capitalization at the time of initial purchase, is in the range of
those found in the Russell Midcap®
Index
(“mid cap companies”). As of May 31, 2024, the market capitalization of
companies in the Russell Midcap®
Index ranged from $351 million to $91.26 billion. The Fund may continue to hold
a company with a market capitalization that appreciates above or depreciates
below the market capitalization threshold and thus may from time to time hold
less than 80% of its net assets in equity securities of mid-cap companies.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 30 to 80 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in mid cap company
stocks that, in the opinion of the Adviser, sell at a substantial discount to
their intrinsic value but have solid long-term prospects. Though the Fund
primarily invests in U.S. listed companies, it may also invest up to 20% of its
net assets in shares of foreign companies, through American Depositary Receipts
(“ADRs”) or dollar-denominated foreign securities. The Fund’s investments in
foreign securities may include investments in emerging markets securities. The
Fund may also invest in real estate investment trusts (“REITs”). The Fund may
also invest up to 10% of its net assets in limited partnerships and master
limited partnerships (“MLPs”). From time to time, the Fund may invest, to a
significant extent, in securities of companies in the same economic sector. As
of February 29, 2024, 25.81% of the Fund’s total investments were invested in
the financial services sector.
In
evaluating an investment for purchase by the Mid Cap Fund, the Adviser conducts
a thorough fundamental assessment of the business, with a focus on those
challenges that have created the value opportunity. The Adviser examines
material issues that can influence the company’s long-term performance and risk
profile. As a part of this process, the Adviser speaks with competitors,
customers, and suppliers; conducts field research such as site visits to plants,
stores, or other facilities; analyzes the financials and public filings of the
company and its competitors; focuses on the company’s underlying financial
condition and business prospects considering estimated earnings, economic
conditions, degree
of
competitive or pricing pressures, the experience and competence of management;
and integrates environmental, social and governance (“ESG”) considerations,
which can vary across companies and industries (ESG considerations may include,
but are not limited to, environmental impact, corporate governance and ethical
business practices). The Adviser believes that assessing the potential impact of
ESG issues on a company is critical to the investment process, both in terms of
downside risk analysis and assessing future earnings upside potential.
While
ESG-related issues are analyzed for each company before and during ownership,
the evaluation of all key investment considerations, including ESG issues, is
company-specific. Each is analyzed internally, discussed with company management
and industry experts and monitored. The Adviser evaluates all issues head-on,
takes a view as to whether the company can remediate them, and will actively
engage management, if necessary, if it decides to become shareholders. The
Adviser believes that investing in times of controversy can result in
significant future upside, assuming the risks and turnaround potential are
appropriately analyzed and, where possible, priced in at the point of
investment. Consequently, no one issue, ESG-related or otherwise, necessarily
disqualifies a company from investment, and no individual characteristic must be
present prior to investment.
Each
step of this process contributes to the Adviser’s determination of whether to
invest and at what position size. Once an investment has been made, the Adviser
continues to engage with the company on an ongoing basis to exert a
constructive, long-term oriented influence on the trajectory of the company.
The
Adviser’s sell discipline is guided by the same process with which the Adviser
originally screens the investment universe. The Adviser typically sells a
security when it reaches what the Adviser judges to be fair value, there are
more attractive opportunities or there is a change in company
fundamentals.
Principal
Risks
By
itself, the Fund is not a complete, balanced investment plan. The Fund cannot
guarantee that it will achieve its investment objectives. Losing all or a portion
of your investment is a risk of investing in the Mid Cap Fund.
The following additional risks could affect the value of your
investment:
•General
Market Risk.
Economies and financial markets throughout the world are becoming
increasingly interconnected, which increases the likelihood that events or
conditions in one country or region will adversely impact markets or issuers in
other countries or regions. Securities in the Fund’s portfolio may underperform
in comparison to securities in general financial markets, a particular financial
market or other asset classes due to a number of factors, including: inflation
(or expectations for inflation); interest rates; global demand for particular
products or resources; natural disasters or events; pandemic diseases;
terrorism; regulatory events; and government controls. U.S. and international
markets have experienced significant periods of volatility in recent years and
months due to a number of economic, political and global macro factors, which
has resulted in disruptions to business operations and supply chains, stress on
the global healthcare system, growth concerns in the U.S. and overseas, staffing
shortages and the inability to meet consumer demand, and widespread concern and
uncertainty. Continuing uncertainties regarding interest rates, rising
inflation, political events, rising government debt in the U.S. and trade
tensions also contribute to market volatility. Conflict, loss of life and
disaster connected to ongoing armed conflict between Ukraine and Russia in
Europe and Israel and Hamas in the Middle East could have severe adverse effects
on the region, including significant adverse effects on the regional or global
economies and the markets for certain securities. The U.S. and the European
Union imposed sanctions on certain Russian individuals and companies, including
certain financial institutions, and have limited certain exports and imports to
and from Russia. The war has contributed to recent market volatility and may
continue to do so.
•Management
Risk. The
Mid Cap Fund is an actively managed investment portfolio and the Fund relies on
the Adviser’s ability to pursue the Fund’s goal. The Adviser will apply its
investment techniques and risk analyses in making investment decisions for the
Fund, but there can be no guarantee that its decisions will produce the desired
results.
•Equity
Securities Risk. The
price of equity securities may rise or fall because of economic or political
changes or changes in a company’s financial condition, sometimes rapidly or
unpredictably. These price movements may result from factors affecting
individual companies, sectors or industries selected for the Fund’s portfolio or
the securities market as a whole, such as changes in economic or political
conditions.
•Value
Style Investing Risk. The
Fund emphasizes a “value” style of investing, which targets undervalued
companies with characteristics for improved valuations. This style of investing
is subject to the risk that the valuations never improve or that the returns on
“value” securities may not move in tandem with the returns on other styles of
investing or the stock market in general.
•Mid
Cap Company Risk.
A mid cap company may be more vulnerable to adverse business or economic events
than stocks of larger companies. These stocks present greater risks than
securities of larger, more diversified companies.
•Sector
Emphasis Risk. The
securities of companies in the same or related businesses, if comprising a
significant portion of the Mid Cap Fund’s portfolio, could react in some
circumstances negatively to market conditions, interest rates and economic,
regulatory or financial developments and adversely affect the value of the
portfolio to a greater extent than if such business comprised a lesser portion
of the Fund’s portfolio.
◦Financial
Services Sector Risk. Risks of investing in the financial
services sector include: (i) systemic risk: factors outside the control of a
particular financial institution may adversely affect the ability of the
financial institution to operate normally or may impair its financial condition;
(ii) regulatory actions: financial services companies may suffer setbacks if
regulators change the rules under which they operate; (iii) changes in interest
rates: unstable and/or rising interest rates may have a disproportionate effect
on companies in the financial services sector; (iv) non-diversified loan
portfolios: financial services companies may have concentrated portfolios that
make them vulnerable to economic conditions that affect an industry; (v) credit:
financial services companies may have exposure to investments or agreements that
may lead to losses; and (vi) competition: the financial services sector has
become increasingly competitive.
•Liquidity
Risk.
Low or lack of trading volume may make it difficult to sell securities held by
the Mid Cap Fund at quoted market prices.
•Real
Estate Investment Trust (REIT) Risk.
Investments in REITs are subject to the same risks as direct investments in real
estate and mortgages which include, but are not limited to, sensitivity to
changes in real estate values and property taxes, interest rate risk, tax and
regulatory risk, fluctuations in rent schedules and operating expenses, adverse
changes in local, regional or general economic conditions, deterioration of the
real estate market and the financial circumstances of tenants and sellers,
unfavorable changes in zoning, building, environmental and other laws, the need
for unanticipated renovations, unexpected increases in the cost of energy and
environmental factors. In addition, the underlying mortgage loans may be subject
to the risks of default or of prepayments that occur earlier or later than
expected, and such loans may also include so-called “sub-prime” mortgages. The
value of REITs will also rise and fall in response to the management skill and
creditworthiness of the issuer. In particular, the value of these securities may
decline when interest rates rise and will also be affected by the real estate
market and by the management of the underlying properties. REITs may be more
volatile and/or more illiquid than other types of equity securities. The
Fund
will indirectly bear its proportionate share of expenses, including management
fees, paid by each REIT in which it invests in addition to the expenses of the
Fund.
•Depositary
Receipt Risk. Depositary receipts are subject to many of the risks associated with
investing directly in foreign securities, including, among other things,
political, social and economic developments abroad, currency movements and
different legal, regulatory and tax environments. In addition, holders of
depositary receipts may have limited voting rights, may not have the same rights
afforded to stockholders of a typical company in the event of a corporate
action, such as an acquisition, merger or rights offering, and may experience
difficulty in receiving company stockholder communications. There is no
guarantee that a financial institution will continue to sponsor a depositary
receipt, or that the depositary receipts will continue to trade on an exchange,
either of which could adversely affect the liquidity, availability and pricing
of the depositary receipt. Changes in foreign currency exchange rates will
affect the value of depositary receipts and, therefore, may affect the value of
your investment in the Fund.
•Limited
Partnership and MLP Risk.
Investments in securities (units) of partnerships, including MLPs, involve risks
that differ from an investment in common stock. Holders of the units
of limited partnerships have more limited control and limited rights to vote on
matters affecting the partnership. Certain tax risks are associated
with an investment in units of limited partnerships. In addition,
conflicts of interest may exist between common unit holders, subordinated unit
holders and the general partner of a limited partnership, including a conflict
arising as a result of incentive distribution payments. In addition, investments
in certain investment vehicles, such as limited partnerships and MLPs, may be
illiquid. Such partnership investments may also not provide daily pricing
information to their investors, which will require the Fund to employ fair value
procedures to value its holdings in such
investments.
•Foreign
Securities Risk. Investing
in foreign securities typically involves more risks than investing in U.S.
securities, and includes risks associated with: (i) internal and external
political and economic developments – e.g.,
the political, economic and social policies and structures of some foreign
countries may be less stable and more volatile than those in the U.S. or some
foreign countries may be subject to trading restrictions or economic sanctions;
(ii) trading practices – e.g.,
government supervision and regulation of foreign securities and currency
markets, trading systems and brokers may be less than in the U.S.; (iii)
availability of information – e.g.,
foreign issuers may not be subject to the same disclosure, accounting and
financial reporting standards and practices as U.S. issuers; (iv) limited
markets – e.g.,
the securities of certain foreign issuers may be less liquid (harder to sell)
and more volatile; and (v) currency exchange rate fluctuations and
policies.
•Emerging
Markets Risk.
In addition to the risks of foreign securities in general, investments in
emerging markets may be riskier than investments in or exposure to investments
in the U.S. and other developed markets for many reasons, including smaller
market capitalizations, greater price volatility, less liquidity, a higher
degree of political and economic instability (which can freeze, restrict or
suspend transactions in those investments, including cash), the impact of
economic sanctions, less governmental regulation and supervision of the
financial industry and markets, and less stringent financial reporting and
accounting standards and controls.
•Currency
Risk.
Changes in foreign currency exchange rates will affect the value of what the
Fund owns and the Fund’s share price. Generally, when the U.S. dollar rises in
value against a foreign currency, an investment in that country loses value
because that currency is worth fewer U.S. dollars. Devaluation of a currency by
a country’s government or banking authority also will have a significant impact
on the value of any investments denominated in that currency. Currency markets
generally are not as regulated as securities markets and the risk may be higher
in emerging markets.
Performance
The following
information provides some indication of the risks of investing in the Mid Cap
Fund. The bar chart shows the annual returns for the Fund’s
Institutional Class shares from year to year. The table shows how the Fund’s
average annual returns for 1-year, 5-years and since inception periods compare
with those of a broad measure of market performance. The Fund’s past
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future. Updated performance information
is available on the Fund’s website at www.pzenafunds.com
or by calling the Fund toll-free at 1-844-796-1996
(844-PZN-1996).
Calendar Year Total Returns
as of December 31 – Institutional Class
The
Fund’s calendar year-to-date return as of
March 31, 2024 was
7.48%. During the
period of time shown in the bar chart, the highest
return for a calendar quarter was 37.60% (quarter ended December 31, 2020)
and the lowest return for a
calendar quarter was -42.23% (quarter ended March 31,
2020).
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Average
Annual Total Returns (For
the period ended December 31, 2023) |
1
Year |
5
Years |
Since
Inception (3/31/2014) |
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Institutional
Class |
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Return Before
Taxes |
21.35% |
15.65% |
9.25% |
Return After
Taxes on Distributions |
18.90% |
13.70% |
7.87% |
Return After
Taxes on Distributions and Sale of Fund Shares |
14.39% |
12.41% |
7.26% |
Investor
Class |
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Return Before
Taxes |
20.91% |
15.24% |
8.89% |
Russell
Midcap®
Value Index
(reflects no deduction for
fees, expenses or taxes) |
12.71% |
11.16% |
7.92% |
The
after-tax returns were calculated using the historical highest individual
federal marginal income tax rates and do not reflect the impact of state and
local taxes. Actual
after-tax returns depend on an
investor’s tax situation and may differ
from those shown, and after-tax returns are not relevant to investors who hold
shares of the Mid Cap Fund through tax-deferred arrangements, such as 401(k)
plans or individual retirement accounts
(“IRAs”).
Management
Investment
Adviser. Pzena
Investment Management, LLC is the Mid Cap Fund’s investment adviser.
Portfolio
Managers. Mr.
John Flynn (Principal and Portfolio Manager), Mr. Benjamin Silver (Principal and
Portfolio Manager), and Mr. Evan Fox (Principal and Portfolio Manager) are the
portfolio managers primarily responsible for the day-to-day management of the
Mid Cap Fund’s portfolio. Mr. Flynn has managed the Fund since August 2015, Mr.
Silver has managed the Fund since July 2017 and Mr. Fox has managed the Fund
since January 2024.
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Mid Cap Fund shares on any business day by
written request via mail (Pzena Mid Cap Value Fund, c/o U.S. Bank Global Fund
Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701), by telephone at
1-844-796-1996 (844-PZN-1996), or through a financial intermediary. You may also
purchase or redeem Fund shares by wire transfer. Investors who wish to purchase,
exchange or redeem Fund shares through a financial intermediary should contact
the financial intermediary directly. The minimum initial and subsequent
investment amounts are shown below.
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Type
of Account |
To
Open Your Account |
To
Add to Your Account |
Investor
Class |
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Regular |
$5,000 |
$100 |
Retirement
Accounts |
$1,000 |
$100 |
Institutional
Class |
$1,000,000 |
Any
Amount |
Tax
Information
The
Mid Cap Fund’s distributions are taxable, and will be taxed as ordinary income
or capital gains, unless you invest through a tax-deferred arrangement, such as
a 401(k) plan or an IRA. Distributions on investments made through tax-deferred
arrangements may be taxed later upon withdrawal of assets from those accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Mid Cap Fund shares through a broker-dealer or other financial
intermediary, the Fund and/or the Adviser may pay the intermediary for the sale
of Fund shares and related services. These payments may create conflicts of
interest by influencing the broker-dealer or other intermediary and your
salesperson to recommend the Fund over another investment. Ask your salesperson
or visit your financial intermediary’s website for more information.
SUMMARY
SECTION
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Pzena
Small Cap Value Fund |
Investment
Objective
The
Pzena Small Cap Value Fund (the “Small Cap Fund”)
seeks to achieve long-term capital appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund. You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the table
and example below.
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Investor Class |
Institutional Class |
SHAREHOLDER
FEES
(fees
paid directly from your investment) |
None |
None |
ANNUAL
FUND OPERATING EXPENSES
(expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
0.95 |
% |
0.95 |
% |
Distribution
and Service (Rule 12b-1) Fees |
0.25 |
% |
None |
Other
Expenses (includes Shareholder Servicing Plan Fee) |
0.61 |
% |
0.51 |
% |
Shareholder
Servicing Plan Fee |
0.10% |
None |
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Total
Annual Fund Operating Expenses(1) |
1.81 |
% |
1.46 |
% |
Less:
Fee Waiver and/or Expense Reimbursement(2) |
-0.46 |
% |
-0.46 |
% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
1.35 |
% |
1.00 |
% |
(1)Total
Annual Fund Operating Expenses reflect the maximum Rule 12b-1 fee and/or
Shareholder Servicing Plan fee allowed, while the Expense Ratios in the
Financial Highlights section of the statutory prospectus reflect actual
operating expenses of the Small Cap Fund.
(2)Pzena
Investment Management, LLC (the “Adviser”) has contractually agreed to waive a
portion or all of its management fees and pay Small Cap Fund expenses to ensure
that Total Annual Fund Operating Expenses (excluding AFFE, interest expense,
taxes, dividends on securities sold short, extraordinary expenses, Rule 12b-1
fees, shareholder servicing fees and any other class-specific expenses) do not
exceed 1.00% of average daily net assets of the Fund (the “Expense Cap”). The
Expense Cap will remain in effect through at least June 28,
2025, and may be terminated only by the Fund’s Board of Trustees
(the “Board”). The Adviser may request recoupment of previously waived fees and
paid expenses from the Fund for 36 months from the date they were waived and
paid, subject to the Expense Cap.
Example. This Example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same (taking into account the Expense Cap only in
the first year). Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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Year |
3
Years |
5
Years |
10
Years |
Investor
Class |
$137 |
$525 |
$937 |
$2,089 |
Institutional
Class |
$102 |
$417 |
$754 |
$1,707 |
Portfolio
Turnover. The
Small Cap Fund pays transaction costs, such as commissions, when it buys and
sells securities (or “turns over” its portfolio). A higher portfolio turnover
rate may indicate higher transaction costs and may result in higher taxes when
Fund shares are held in a taxable account. These costs, which are not reflected
in annual fund operating expenses or in the Example, affect the Fund’s
performance. During the most recent fiscal year, the Fund’s portfolio turnover
rate was 25% of the average value of its
portfolio.
Principal Investment
Strategies
Under normal
market conditions, the Small Cap Fund invests at least 80% of its net assets
(plus any borrowings for investment purposes) in stocks of “small-cap”
companies. The Fund defines a “small-cap” company as an issuer
whose market capitalization at the time of initial purchase, is in the range of
those found in the Russell 2000®
Index during the most recent 11-month period (based on month-end data) plus the
most recent data during the current month (“small cap companies”). As of May 31,
2024, the market capitalization of companies in the Russell 2000®
Index ranged from $10.79 million to $45.94 billion. The Fund may continue
to hold a company with a market capitalization that appreciates above or
depreciates below the market capitalization threshold and thus may from time to
time hold less than 80% of its net assets in equity securities of small-cap
companies.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 40 to 90 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in small-cap company
stocks that, in the opinion of the Adviser, sell at a substantial discount to
their intrinsic value but have solid long-term prospects. Though the Fund
primarily invests in U.S. listed companies, it may also invest up to 20% of its
net assets in shares of foreign securities, through American Depositary Receipts
(“ADRs”)
or
dollar-denominated foreign securities. The Fund’s investments in foreign
securities may include investments in emerging market securities. The Fund may
also invest in real estate investment trusts (“REITs”). The Fund may also invest
up to 10% of its net assets in limited partnerships and master limited
partnerships (“MLPs”). From time to time, the Fund may invest, to a significant
extent, in securities of companies in the same economic sector. As of February
29, 2024, 30.34% of the Fund’s total investments were invested in the industrial
sector.
In
evaluating an investment for purchase by the Small Cap Fund, the Adviser
conducts a thorough fundamental assessment of the business, with a focus on
those challenges that have created the value opportunity. The Adviser examines
material issues that can influence the company’s long-term performance and risk
profile. As a part of this process, the Adviser speaks with competitors,
customers, and suppliers; conducts field research such as site visits to plants,
stores, or other facilities; analyzes the financials and public filings of the
company and its competitors; focuses on the company’s underlying financial
condition and business prospects considering estimated earnings, economic
conditions, degree of competitive or pricing pressures, the experience and
competence of management; and integrates environmental, social and governance
(“ESG”) considerations, which can vary across companies and industries (ESG
considerations may include, but are not limited to, environmental impact,
corporate governance and ethical business practices). The Adviser believes that
assessing the potential impact of ESG issues on a company is critical to the
investment process, both in terms of downside risk analysis and assessing future
earnings upside potential.
While
ESG-related issues are analyzed for each company before and during ownership,
the evaluation of all key investment considerations, including ESG issues, is
company-specific. Each is analyzed internally, discussed with company management
and industry experts and monitored. The Adviser evaluates all
issues
head-on, takes a view as to whether the company can remediate them, and will
actively engage management, if necessary, if it decides to become shareholders.
The Adviser believes that investing in times of controversy can result in
significant future upside, assuming the risks and turnaround potential are
appropriately analyzed and, where possible, priced in at the point of
investment. Consequently, no one issue, ESG-related or otherwise, necessarily
disqualifies a company from investment, and no individual characteristic must be
present prior to investment.
Each
step of this process contributes to the Adviser’s determination of whether to
invest and at what position size. Once an investment has been made, the Adviser
continues to engage with the company on an ongoing basis to exert a
constructive, long-term oriented influence on the trajectory of the company.
The
Adviser’s sell discipline is guided by the same process with which the Adviser
originally screens the investment universe. The Adviser typically sells a
security when it reaches what the Adviser judges to be fair value, there are
more attractive opportunities or there is a change in company
fundamentals.
Principal Risks
By
itself, the Fund is not a complete, balanced investment plan. The Fund cannot
guarantee that it will achieve its investment objectives. Losing all or a
portion of your investment is a risk of investing in the Small Cap
Fund. The following additional risks could affect the value of
your investment:
•General
Market Risk.
Economies and financial markets throughout the world are becoming
increasingly interconnected, which increases the likelihood that events or
conditions in one country or region will adversely impact markets or issuers in
other countries or regions. Securities in the Fund’s portfolio may underperform
in comparison to securities in general financial markets, a particular financial
market or other asset classes due to a number of factors, including: inflation
(or expectations for inflation); interest rates; global demand for particular
products or resources; natural disasters or events; pandemic diseases;
terrorism; regulatory events; and government controls. U.S. and international
markets have experienced significant periods of volatility in recent years and
months due to a number of economic, political and global macro factors, which
has resulted in disruptions to business operations and supply chains, stress on
the global healthcare system, growth concerns in the U.S. and overseas, staffing
shortages and the inability to meet consumer demand, and widespread concern and
uncertainty. Continuing uncertainties regarding interest rates, rising
inflation, political events, rising government debt in the U.S. and trade
tensions also contribute to market volatility. Conflict, loss of life and
disaster connected to ongoing armed conflict between Ukraine and Russia in
Europe and Israel and Hamas in the Middle East could have severe adverse effects
on the region, including significant adverse effects on the regional or global
economies and the markets for certain securities. The U.S. and the European
Union imposed sanctions on certain Russian individuals and companies, including
certain financial institutions, and have limited certain exports and imports to
and from Russia. The war has contributed to recent market volatility and may
continue to do so.
•Management
Risk. The Small Cap Fund is an actively managed investment portfolio and
the Fund relies on the Adviser’s ability to pursue the Fund’s goal. The Adviser
will apply its investment techniques and risk analyses in making investment
decisions for the Fund, but there can be no guarantee that its decisions will
produce the desired results.
•Equity
Securities Risk. The price of equity securities may rise or fall because of economic
or political changes or changes in a company’s financial condition, sometimes
rapidly or unpredictably. These price movements may result from factors
affecting individual companies, sectors or industries selected for the Fund’s
portfolio or the securities market as a whole, such as changes in economic or
political conditions.
•Value
Style Investing Risk. The Fund emphasizes a “value” style of investing, which targets
undervalued companies with characteristics for improved valuations. This style
of investing is subject to the risk that the valuations never improve or that
the returns on “value” securities may not move in tandem with the returns on
other styles of investing or the stock market in general.
•Small
Cap Company Risk. Securities of companies with smaller market capitalizations tend to
be more volatile and less liquid than larger company stocks. Smaller companies
may have no or relatively short operating histories, or be newly public
companies.
•Liquidity
Risk. Low or lack of trading volume may make it difficult to sell
securities held by the Small Cap Fund at quoted market prices.
•Sector
Emphasis Risk. The
securities of companies in the same or related businesses, if comprising a
significant portion of the Small Cap Fund’s portfolio, could react in some
circumstances negatively to market conditions, interest rates and economic,
regulatory or financial developments and adversely affect the value of the
portfolio to a greater extent than if such business comprised a lesser portion
of the Fund’s portfolio.
◦Industrials
Sector Risk.
The industrials sector includes companies
that provide transportation services such as airlines, air freight and
logistics, railroads, marine, and trucking. It also includes manufacturers and
distributors of capital goods such as aerospace & defense, building
products, electrical equipment and machinery and companies that offer
construction & engineering services. It further includes providers of
commercial & professional services including printing, environmental and
facilities services, office services & supplies, security & alarm
services, human resource & employment services, research & consulting
services. The stock prices of companies in the industrials sector are affected
by supply and demand both for their specific product or service and for
industrials sector products in general. The products of manufacturing companies
may face product obsolescence due to rapid technological developments and
frequent new product introduction. Government regulation, world events and
economic conditions may affect the performance of companies in the industrials
sector. Companies in the industrials sector may be at risk for environmental
damage and product liability claims.
•Real
Estate Investment Trust (REIT) Risk. Investments in REITs are subject to the same risks as direct
investments in real estate and mortgages which include, but are not limited to,
sensitivity to changes in real estate values and property taxes, interest rate
risk, tax and regulatory risk, fluctuations in rent schedules and operating
expenses, adverse changes in local, regional or general economic conditions,
deterioration of the real estate market and the financial circumstances of
tenants and sellers, unfavorable changes in zoning, building, environmental and
other laws, the need for unanticipated renovations, unexpected increases in the
cost of energy and environmental factors. In addition, the underlying mortgage
loans may be subject to the risks of default or of prepayments that occur
earlier or later than expected, and such loans may also include so-called
“sub-prime” mortgages. The value of REITs will also rise and fall in response to
the management skill and creditworthiness of the issuer. In particular, the
value of these securities may decline when interest rates rise and will also be
affected by the real estate market and by the management of the underlying
properties. REITs may be more volatile and/or more illiquid than other types of
equity securities. The Fund will indirectly bear its proportionate share of
expenses, including management fees, paid by each REIT in which it invests in
addition to the expenses of the Fund.
•Depositary
Receipt Risk.
Depositary receipts are subject to many of the risks associated with investing
directly in foreign securities, including, among other things, political, social
and economic developments abroad, currency movements and different legal,
regulatory and tax environments. In addition, holders of depositary receipts may
have limited voting rights, may not have the same rights
afforded to stockholders of a typical company in the event of a
corporate action, such as an acquisition, merger or rights offering, and may
experience difficulty in receiving company stockholder communications. There is
no guarantee that a financial institution will continue to sponsor a depositary
receipt, or that the depositary receipts will continue to trade on an exchange,
either of which could adversely affect the liquidity, availability and pricing
of the depositary receipt. Changes in foreign currency exchange rates will
affect the value of depositary receipts and, therefore, may affect the value of
your investment in the Fund.
•Limited
Partnership and MLP Risk. Investments in securities (units) of partnerships, including MLPs,
involve risks that differ from an investment in common stock. Holders
of the units of limited partnerships have more limited control and limited
rights to vote on matters affecting the partnership. Certain tax
risks are associated with an investment in units of limited
partnerships. In addition, conflicts of interest may exist between
common unit holders, subordinated unit holders and the general partner of a
limited partnership, including a conflict arising as a result of incentive
distribution payments. In addition, investments in certain investment vehicles,
such as limited partnerships and MLPs, may be illiquid. Such partnership
investments may also not provide daily pricing information to their investors,
which will require the Fund to employ fair value procedures to value its
holdings in such investments.
•Foreign
Securities Risk. Investing
in foreign securities typically involves more risks than investing in U.S.
securities, and includes risks associated with: (i) internal and external
political and economic developments – e.g.,
the political, economic and social policies and structures of some foreign
countries may be less stable and more volatile than those in the U.S. or some
foreign countries may be subject to trading restrictions or economic sanctions;
(ii) trading practices – e.g.,
government supervision and regulation of foreign securities and currency
markets, trading systems and brokers may be less than in the U.S.; (iii)
availability of information – e.g.,
foreign issuers may not be subject to the same disclosure, accounting and
financial reporting standards and practices as U.S. issuers; (iv) limited
markets – e.g., the securities of certain foreign issuers may be less liquid
(harder to sell) and more volatile; and (v) currency exchange rate fluctuations
and policies.
•Emerging
Markets Risk. In addition to the risks of foreign securities in
general, investments in emerging markets may be riskier than investments in or
exposure to investments in the U.S. and other developed markets for many
reasons, including smaller market capitalizations, greater price volatility,
less liquidity, a higher degree of political and economic instability (which can
freeze, restrict or suspend transactions in those investments, including cash),
the impact of economic sanctions, less governmental regulation and supervision
of the financial industry and markets, and less stringent financial reporting
and accounting standards and controls.
•Currency
Risk. Changes in foreign currency exchange rates will affect the value of
what the Fund owns and the Fund’s share price. Generally, when the U.S. dollar
rises in value against a foreign currency, an investment in that country loses
value because that currency is worth fewer U.S. dollars. Devaluation of a
currency by a country’s government or banking authority also will have a
significant impact on the value of any investments denominated in that currency.
Currency markets generally are not as regulated as securities markets and the
risk may be higher in emerging markets.
Performance
The following
information provides some indication of the risks of investing in the Small Cap
Fund. The bar chart shows the annual returns for the Fund’s
Institutional Class shares from year to year. The table shows how the Fund’s
average annual returns for 1-year, 5-years and since inception periods compare
with those of a broad measure of market performance. The Fund’s past
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future. Updated performance
information is available on the Fund’s website at www.pzenafunds.com
or by calling the Fund toll-free at 1-844-796-1996
(844-PZN-1996).
Calendar Year Total Returns
as of December 31 – Institutional Class
The
Fund’s calendar year-to-date return as of
March 31, 2024 was
5.42%. During the
period of time shown in the bar chart, the highest
return for a calendar quarter was 39.95% (quarter ended December 31, 2020)
and the lowest return for a
calendar quarter was -42.61% (quarter ended March 31,
2020).
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| |
Average
Annual Total Returns (For
the period ended December 31, 2023) |
1
Year |
5
Years |
Since
Inception (4/27/2016) |
|
|
| |
Institutional
Class |
|
| |
Return Before
Taxes |
26.04% |
13.98% |
9.65% |
Return After
Taxes on Distributions |
25.88% |
12.95% |
8.50% |
Return After
Taxes on Distributions and Sale of Fund Shares |
15.51% |
11.07% |
7.47% |
Investor
Class |
|
| |
Return Before
Taxes |
25.61% |
13.69% |
9.34% |
Russell
2000®
Value Index
(reflects no deduction for
fees, expenses or taxes) |
14.65% |
10.00% |
8.65% |
The after-tax returns were
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns are not relevant to investors who hold shares of the Small Cap
Fund through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts (“IRAs”).
Management
Investment
Adviser. Pzena
Investment Management, LLC is the Small Cap Fund’s investment adviser.
Portfolio
Managers. Mr.
Evan Fox (Principal and Portfolio Manager), Mr. John Flynn (Principal and
Portfolio Manager) and Mr. Benjamin S. Silver (Principal and Portfolio Manager)
are the portfolio
managers
primarily responsible for the day-to-day management of the Small Cap Fund’s
portfolio. Messrs. Fox, Flynn and Silver have managed the Fund since its
inception in April 2016.
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Small Cap Fund shares on any business day by
written request via mail (Pzena Small Cap Value Fund, c/o U.S. Bank Global Fund
Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701), by telephone at
1-844-796-1996 (844-PZN-1996), or through a financial intermediary. You may also
purchase or redeem Fund shares by wire transfer. Investors who wish to purchase,
exchange or redeem Fund shares through a financial intermediary should contact
the financial intermediary directly. The minimum initial and subsequent
investment amounts are shown below.
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|
| |
Type
of Account |
To
Open Your Account |
To
Add to Your Account |
Investor
Class |
| |
Regular |
$5,000 |
$100 |
Retirement
Accounts |
$1,000 |
$100 |
Institutional
Class |
$1,000,000 |
Any
Amount |
Tax
Information
The
Small Cap Fund’s distributions are taxable, and will be taxed as ordinary income
or capital gains, unless you invest through a tax-deferred arrangement, such as
a 401(k) plan or an individual retirement account (“IRA”). Distributions on
investments made through tax-deferred arrangements may be taxed later upon
withdrawal of assets from those accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Small Cap Fund shares through a broker-dealer or other financial
intermediary, the Fund and/or the Adviser may pay the intermediary for the sale
of Fund shares and related services. These payments may create conflicts of
interest by influencing the broker-dealer or other intermediary and your
salesperson to recommend the Fund over another investment. Ask your salesperson
or visit your financial intermediary’s website for more information.
SUMMARY
SECTION
|
| |
Pzena
Emerging Markets Value Fund |
Investment
Objective
The
Pzena Emerging Markets Value Fund
(the “Emerging Markets Fund”) seeks to achieve long-term capital
appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund. You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the table
and example below.
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| |
|
Investor Class |
Institutional Class |
SHAREHOLDER
FEES
(fees
paid directly from your investment) |
None |
None |
ANNUAL
FUND OPERATING EXPENSES
(expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
1.00 |
% |
1.00 |
% |
Distribution
and Service (Rule 12b-1) Fees |
0.25 |
% |
None |
Other
Expenses (includes Shareholder Servicing Plan Fee)
|
0.26 |
% |
0.16 |
% |
Shareholder
Servicing Plan Fee |
0.10% |
None |
Total
Annual Fund Operating Expenses(1) |
1.51 |
% |
1.16 |
% |
Less:
Fee Waiver and/or Expense Reimbursement(2) |
-0.07 |
% |
-0.07 |
% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
1.44 |
% |
1.09 |
% |
(1)Total Annual Fund
Operating Expenses reflect the maximum Rule 12b-1 fee and/or Shareholder
Servicing Plan fee allowed and do not correlate to the Expense Ratios in the
Financial Highlights section of the statutory prospectus, which reflect the
actual operating expenses of the Emerging Markets Fund and do not include 0.01%
that is attributed to acquired fund fees and expenses (“AFFE”).
(2)Pzena
Investment Management, LLC (the “Adviser”) has contractually agreed to waive a
portion or all of its management fees and pay Emerging Markets Fund expenses to
ensure that Total Annual Fund Operating Expenses (excluding AFFE, interest
expense, taxes, dividends on securities sold short, extraordinary expenses, Rule
12b-1 fees, shareholder servicing fees, and any other class-specific expenses)
do not exceed 1.08% of average daily net assets of the Fund (the “Expense Cap”).
The Expense Cap will remain in effect through at least June 28,
2025, and may be terminated only by the Fund’s Board of Trustees
(the “Board”). The Adviser may request recoupment of previously waived fees and
paid expenses from the Fund for 36 months from the date they were waived and
paid, subject to the Expense Cap.
Example. This Example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same (taking into account the Expense Cap only in
the first year). Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class |
$147 |
$470 |
$817 |
$1,796 |
Institutional
Class |
$111 |
$362 |
$632 |
$1,403 |
Portfolio
Turnover. The
Emerging Markets Fund pays transaction costs, such as commissions, when it buys
and sells securities (or “turns over” its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the Example, affect the Fund’s
performance. During the most recent fiscal year, the Fund’s portfolio turnover
rate was 38%
of the average value of its portfolio.
Principal Investment
Strategies
Under normal
market conditions, the Emerging Markets Fund invests at least 80% of its net
assets (plus any borrowings for investment purposes) in stocks of companies
located in emerging market countries. Emerging market companies
are generally located in, or operating within, newly industrialized countries or
countries in the beginning stages of development, such as most countries in
Africa, Asia, Latin America, the Middle East and Eastern Europe. The Fund may
also invest in “frontier” markets, which are considered pre-emerging market
countries. This includes companies located in, or primarily operating from,
countries in the Morgan Stanley Capital International (“MSCI”) Emerging Markets
Index and/or MSCI Frontier Emerging Markets Index.
The
Adviser determines a company’s country by referring to: its stock exchange
listing; where it is registered, organized or incorporated; where its
headquarters are located; its MSCI country classification; where it derives at
least 50% of its revenues or profits from goods produced or sold, investments
made, or services performed; or where at least 50% of its assets are
located.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 40 to 80 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in stocks that, in the
opinion of the Adviser, sell at a substantial discount to their intrinsic value
but have solid long-term prospects. The
Fund may gain exposure to emerging market companies by purchasing equity
securities in the form of depositary receipts, such as American Depositary
Receipts (“ADRs”), European Depositary Receipts (“EDRs) and Global Depositary
Receipts (“GDRs”).
The Fund may also invest in real estate investment trusts (“REITs”), including
foreign real estate companies operating in emerging markets. From time to time,
the Fund may invest, to a significant extent, in securities of companies in the
same economic sector. As of February 29, 2024, 29.27% of the Fund’s total
investments were invested in the financial services sector.
In
evaluating an investment for purchase by the Emerging Markets Fund, the Adviser
conducts a thorough fundamental assessment of the business, with a focus on
those challenges that have created the value opportunity. The Adviser examines
material issues that can influence the company’s long-term performance and risk
profile. As a part of this process, the Adviser speaks with competitors,
customers, and suppliers; conducts field research such as site visits to plants,
stores, or other facilities; analyzes the financials and public filings of the
company and its competitors; focuses on the company’s underlying financial
condition and business prospects considering estimated earnings, economic
conditions, degree of competitive or pricing pressures, the experience and
competence of management; and integrates environmental, social and governance
(“ESG”) considerations, which can vary across companies and industries (ESG
considerations may include, but are not limited to, environmental impact,
corporate governance and ethical business practices). The Adviser believes that
assessing the potential impact of
ESG
issues on a company is critical to the investment process, both in terms of
downside risk analysis and assessing future earnings upside potential.
While
ESG-related issues are analyzed for each company before and during ownership,
the evaluation of all key investment considerations, including ESG issues, is
company-specific. Each is analyzed internally, discussed with company management
and industry experts and monitored. The Adviser evaluates all issues head-on,
takes a view as to whether the company can remediate them, and will actively
engage management, if necessary, if it decides to become shareholders. The
Adviser believes that investing in times of controversy can result in
significant future upside, assuming the risks and turnaround potential are
appropriately analyzed and, where possible, priced in at the point of
investment. Consequently, no one issue, ESG-related or otherwise, necessarily
disqualifies a company from investment, and no individual characteristic must be
present prior to investment.
Each
step of this process contributes to the Adviser’s determination of whether to
invest and at what position size. Once an investment has been made, the Adviser
continues to engage with the company on an ongoing basis to exert a
constructive, long-term oriented influence on the trajectory of the company.
The
Adviser’s sell discipline is guided by the same process with which the Adviser
originally screens the investment universe. The Adviser typically sells a
security when it reaches what the Adviser judges to be fair value, there are
more attractive opportunities or there is a change in company
fundamentals.
Principal
Risks
By
itself, the Fund is not a complete, balanced investment plan. The Fund cannot
guarantee that it will achieve its investment objectives. Losing all or a
portion of your investment is a risk of investing in the Emerging Markets
Fund. The following additional risks could affect the value of
your investment:
•General
Market Risk.
Economies and financial markets throughout the world are becoming
increasingly interconnected, which increases the likelihood that events or
conditions in one country or region will adversely impact markets or issuers in
other countries or regions. Securities in the Fund’s portfolio may underperform
in comparison to securities in general financial markets, a particular financial
market or other asset classes due to a number of factors, including: inflation
(or expectations for inflation); interest rates; global demand for particular
products or resources; natural disasters or events; pandemic diseases;
terrorism; regulatory events; and government controls. U.S. and international
markets have experienced significant periods of volatility in recent years and
months due to a number of economic, political and global macro factors, which
has resulted in disruptions to business operations and supply chains, stress on
the global healthcare system, growth concerns in the U.S. and overseas, staffing
shortages and the inability to meet consumer demand, and widespread concern and
uncertainty. Continuing uncertainties regarding interest rates, rising
inflation, political events, rising government debt in the U.S. and trade
tensions also contribute to market volatility. Conflict, loss of life and
disaster connected to ongoing armed conflict between Ukraine and Russia in
Europe and Israel and Hamas in the Middle East could have severe adverse effects
on the region, including significant adverse effects on the regional or global
economies and the markets for certain securities. The U.S. and the European
Union imposed sanctions on certain Russian individuals and companies, including
certain financial institutions, and have limited certain exports and imports to
and from Russia. The war has contributed to recent market volatility and may
continue to do so.
•Management
Risk. The
Emerging Markets Fund is an actively managed investment portfolio and the Fund
relies on the Adviser’s ability to pursue the Fund’s goal. The Adviser will
apply its investment techniques and risk analyses in making investment decisions
for the Fund, but there can be no guarantee that its decisions will produce the
desired results.
•Equity
Securities Risk. The
price of equity securities may rise or fall because of economic or political
changes or changes in a company’s financial condition, sometimes rapidly or
unpredictably. These price movements may result from factors affecting
individual companies, sectors or industries selected for the Fund’s portfolio or
the securities market as a whole, such as changes in economic or political
conditions.
•Value
Style Investing Risk. The
Fund emphasizes a “value” style of investing, which targets undervalued
companies with characteristics for improved valuations. This style of investing
is subject to the risk that the valuations never improve or that the returns on
“value” securities may not move in tandem with the returns on other styles of
investing or the stock market in general.
•Foreign
Securities Risk. Foreign
securities are subject to special risks in addition to those of issuers located
in the U.S. Foreign securities can be more volatile than domestic (U.S.)
securities. Securities markets of other countries are generally smaller than
U.S. securities markets. Many foreign securities may be less liquid and more
volatile than U.S. securities, which could affect the Emerging Markets Fund’s
investments.
•Emerging
Markets Risk.
In addition to the risks of foreign securities in general, investments in
emerging markets may be riskier than investments in or exposure to investments
in the U.S. and other developed markets for many reasons, including smaller
market capitalizations, greater price volatility, less liquidity, a higher
degree of political and economic instability (which can freeze, restrict or
suspend transactions in those investments, including cash), the impact of
economic sanctions, less governmental regulation and supervision of the
financial industry and markets, and less stringent financial reporting and
accounting standards and controls.
•Frontier
Markets Risk.
There is an additional increased risk of price volatility associated with
frontier market countries (pre-emerging markets), which may be further magnified
by currency fluctuations relative to the U.S. dollar. Frontier market countries
generally have smaller economies or less developed capital markets than more
advanced emerging markets and, as a result, the risks of investing in emerging
market countries may be magnified in frontier market
countries.
•Depositary
Receipt Risk. Depositary receipts are subject to many of the risks associated with
investing directly in foreign securities, including, among other things,
political, social and economic developments abroad, currency movements and
different legal, regulatory and tax environments. In addition, holders of
depositary receipts may have limited voting rights, may not have the same rights
afforded to stockholders of a typical company in the event of a corporate
action, such as an acquisition, merger or rights offering, and may experience
difficulty in receiving company stockholder communications. There is no
guarantee that a financial institution will continue to sponsor a depositary
receipt, or that the depositary receipts will continue to trade on an exchange,
either of which could adversely affect the liquidity, availability and pricing
of the depositary receipt. Changes in foreign currency exchange rates will
affect the value of depositary receipts and, therefore, may affect the value of
your investment in the Fund.
•Currency
Risk. Changes in foreign currency exchange rates will affect the value of
what the Emerging Markets Fund owns and the Fund’s share price. Generally, when
the U.S. dollar rises in value against a foreign currency, an investment in that
country loses value because that currency is worth fewer U.S. dollars.
Devaluation of a currency by a country’s government or banking authority also
will have a significant impact on the value of any investments denominated in
that currency. Currency markets generally are not as regulated as securities
markets and the risk is especially high in emerging markets.
•Sector
Emphasis Risk. The
securities of companies in the same or related businesses, if comprising a
significant portion of the Emerging Markets Fund’s portfolio, could react
negatively to market
conditions,
interest rates and economic, regulatory or financial developments and adversely
affect the value of the portfolio to a greater extent than if such business
comprised a lesser portion of the Fund’s
portfolio.
◦Financial
Services Sector Risk. Risks of investing in the financial
services sector include: (i) systemic risk: factors outside the control of a
particular financial institution may adversely affect the ability of the
financial institution to operate normally or may impair its financial condition;
(ii) regulatory actions: financial services companies may suffer setbacks if
regulators change the rules under which they operate; (iii) changes in interest
rates: unstable and/or rising interest rates may have a disproportionate effect
on companies in the financial services sector; (iv) non-diversified loan
portfolios: financial services companies may have concentrated portfolios that
make them vulnerable to economic conditions that affect an industry; (v) credit:
financial services companies may have exposure to investments or agreements that
may lead to losses; and (vi) competition: the financial services sector has
become increasingly competitive.
•Liquidity
Risk.
Low or lack of trading volume may make it difficult to sell securities held by
the Emerging Markets Fund at quoted market prices.
•Real
Estate Investment Trust (REIT) and Foreign Real Estate Company Risk.
Investments
in REITs and foreign real estate companies are subject to the same risks as
direct investments in real estate and mortgages which include, but are not
limited to, sensitivity to changes in real estate values and property taxes,
interest rate risk, tax and regulatory risk, fluctuations in rent schedules and
operating expenses, adverse changes in local, regional or general economic
conditions, deterioration of the real estate market and the financial
circumstances of tenants and sellers, unfavorable changes in zoning, building,
environmental and other laws, the need for unanticipated renovations, unexpected
increases in the cost of energy and environmental factors. In addition, the
underlying mortgage loans may be subject to the risks of default or of
prepayments that occur earlier or later than expected, and such loans may also
include so-called “sub-prime” mortgages. The value of REITs and foreign real
estate companies will also rise and fall in response to the management skill and
creditworthiness of the issuer. In particular, the value of these securities may
decline when interest rates rise and will also be affected by the real estate
market and by the management of the underlying properties. REITs and foreign
real estate companies may be more volatile and/or more illiquid than other types
of equity securities. The Fund will indirectly bear its proportionate share of
expenses, including management fees, paid by each REIT or foreign real estate
company in which it invests in addition to the expenses of the
Fund.
Performance
The following
information provides some indication of the risks of investing in the Emerging
Markets Fund. The bar chart shows the annual returns for the
Fund’s Institutional Class shares from year to year. The table shows how the
Fund’s average annual returns for 1-year, 5-years and since inception periods
compare with those of a broad measure of market performance. The
Fund’s past performance, before and after taxes, is not necessarily an
indication of how the Fund will perform in the future. Updated
performance information is available on the Fund’s website at www.pzenafunds.com
or by calling the Fund toll-free at 1-844-796-1996
(844-PZN-1996).
Calendar Year Total Returns
as of December 31 – Institutional Class
The
Fund’s calendar year-to-date return as of
March 31, 2024 was
2.95%. During the
period of time shown in the bar chart, the highest
return for a calendar quarter was 29.41% (quarter ended December 31, 2020)
and the lowest return for a
calendar quarter was -32.89% (quarter ended March 31,
2020).
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Average
Annual Total Returns (For
the period ended December 31, 2023) |
1
Year |
5
Years |
Since
Inception (3/31/2014) |
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|
| |
Institutional
Class |
|
| |
Return
Before Taxes |
20.71% |
7.84% |
4.43% |
Return After
Taxes on Distributions |
18.79% |
7.10% |
4.00% |
Return After
Taxes on Distributions and Sale of Fund Shares |
13.05% |
6.15% |
3.54% |
Investor
Class |
|
| |
Return Before
Taxes |
20.30% |
7.48% |
4.11% |
MSCI
Emerging Markets Index (Net USD)
(reflects no deduction for
fees, expenses or taxes) |
9.83% |
3.68% |
2.78% |
MSCI
Emerging Markets Value (Net USD)
(reflects no deduction for
fees, expenses or taxes) |
14.21% |
3.37% |
2.07% |
The after-tax returns were
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns are not relevant to investors who hold shares of the Emerging
Markets Fund through tax-deferred arrangements, such as 401(k) plans or
individual retirement accounts (“IRAs”).
Management
Investment
Adviser. Pzena
Investment Management, LLC is the Emerging Markets Fund’s investment adviser.
Portfolio
Managers. Ms. Allison
Fisch (Managing Principal, President and Portfolio Manager), Ms. Caroline Cai
(Managing Principal, Chief Executive Officer and Portfolio Manager),
Mr. Rakesh Bordia (Principal and Portfolio Manager) and Mr. Akhil
Subramanian (Principal and Portfolio Manager) are the portfolio managers
primarily responsible for the day-to-day management of the Emerging Markets
Fund’s portfolio. Ms. Fisch and Ms. Cai have managed the Fund since
its inception in March 2014, Mr. Bordia has managed the Fund since April 2015,
and Mr. Subramanian has managed the Fund since January 2023.
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem Emerging Markets Fund shares on any business
day by written request via mail (Pzena Emerging Markets Value Fund, c/o U.S.
Bank Global Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701),
by telephone at 1-844-796-1996 (844-PZN-1996), or through a financial
intermediary. You may also purchase or redeem Fund shares by wire transfer.
Investors who wish to purchase, exchange or redeem Fund shares through a
financial intermediary should contact the financial intermediary directly. The
minimum initial and subsequent investment amounts are shown below.
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Type
of Account |
To
Open Your Account |
To
Add to Your Account |
Investor
Class |
| |
Regular |
$5,000 |
$100 |
Retirement
Accounts |
$1,000 |
$100 |
Institutional
Class |
$1,000,000 |
Any
Amount |
Tax
Information
The
Emerging Markets Fund’s distributions are taxable, and will be taxed as ordinary
income or capital gains, unless you invest through a tax-deferred arrangement,
such as a 401(k) plan or an IRA. Distributions on investments made through
tax-deferred arrangements may be taxed later upon withdrawal of assets from
those accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase Emerging Markets Fund shares through a broker-dealer or other
financial intermediary, the Fund and/or the Adviser may pay the intermediary for
the sale of Fund shares and related services. These payments may create
conflicts of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more information.
SUMMARY
SECTION
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| |
Pzena
International Small Cap Value Fund |
Investment
Objective
The
Pzena International Small Cap Value Fund (the “International Small Cap
Fund”)
seeks
to achieve long-term capital appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund. You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the table
and example below.
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| |
|
Investor Class |
Institutional Class |
SHAREHOLDER
FEES
(fees
paid directly from your investment) |
None |
None |
ANNUAL
FUND OPERATING EXPENSES
(expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
1.00 |
% |
1.00 |
% |
Distribution
and Service (Rule 12b-1) Fees |
0.25 |
% |
None |
Other
Expenses (includes Shareholder Servicing Plan Fee) |
1.20 |
% |
1.10 |
% |
Shareholder
Servicing Plan Fee |
0.10% |
None |
Total
Annual Fund Operating Expenses(1) |
2.45 |
% |
2.10 |
% |
Less:
Fee Waiver and/or Expense Reimbursement(2) |
-0.92 |
% |
-0.92 |
% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
1.53 |
% |
1.18 |
% |
(1)Total Annual Fund
Operating Expenses reflect the maximum Rule 12b-1 fee and/or Shareholder
Servicing Plan fee allowed and do not correlate to the Expense Ratios in the
Financial Highlights section of the statutory prospectus, which reflect the
actual operating expenses of the International Small Cap Fund and do not include
0.01% that is attributed to acquired fund fees and expenses
(“AFFE”).
(2) Pzena
Investment Management, LLC (the “Adviser”) has contractually agreed to waive a
portion or all of its management fees and pay International Small Cap Fund
expenses to ensure that Total Annual Fund Operating Expenses (excluding AFFE,
interest expense, taxes, dividends on securities sold short, extraordinary
expenses, Rule 12b-1 fees, shareholder servicing fees, and any other
class-specific expenses) do not exceed 1.17% of average daily net assets of the
Fund (the “Expense Cap”). The Expense Cap will remain in effect through at least
June 28,
2025, and may be terminated only by the Fund’s Board of Trustees
(the “Board”). The Adviser may request recoupment of previously waived fees and
paid expenses from the Fund for 36 months from the date they were waived and
paid, subject to the Expense Cap.
Example. This Example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same (taking into account the Expense Cap only in
the first year). Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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| |
| 1
Year |
3
Years |
5
Years |
10
Years |
Investor
Class |
$156 |
$676 |
$1,223 |
$2,717 |
Institutional
Class |
$120 |
$569 |
$1,044 |
$2,358 |
Portfolio
Turnover. The
International Small Cap Fund pays transaction costs, such as commissions, when
it buys and sells securities (or “turns over” its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the Example, affect the Fund’s
performance. During the most recent fiscal year, the Fund’s portfolio turnover
rate was 43% of the average value of its
portfolio.
Principal Investment
Strategies
Under normal
market conditions the International Small Cap Fund invests at least 80% of its
net assets (plus any borrowings for investment purposes) in common stocks of
small-cap companies located in Developed Markets outside the
U.S. The Fund defines a “small-cap” company as an issuer whose
market capitalization at the time of initial purchase is in the range of those
found in the MSCI World ex USA Small Cap Index (the “Small Cap Index”), during
the most recent 11-month period (based on month-end data) plus the most recent
data during the current month (“small cap companies”). As of May 31, 2024, the
market capitalization of companies in the MSCI World ex USA Small Cap Index
ranged from $158.50 million to $11.45 billion. The Fund may continue to hold a
company with a market capitalization that appreciates above or depreciates below
the market capitalization threshold and thus may from time to time hold less
than 80% of its total assets in equity securities of small-cap companies. The
Fund defines “Developed Markets” primarily as those classified as developed by
Morgan Stanley Capital International (“MSCI”). The Adviser determines a
company’s country by referring to: its stock exchange listing; where it is
registered, organized or incorporated; where its headquarters are located; its
MSCI country classification; where it derives at least 50% of its revenues or
profits from goods produced or sold, investments made, or services performed; or
where at least 50% of its assets are located.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 40 to 90 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in stocks that, in the
opinion of the Adviser, sell at a substantial discount to their intrinsic value
but have solid long-term prospects. The Fund may gain exposure to Developed
Markets, emerging market, and frontier market companies by purchasing equity
securities in the form of depositary receipts, such as American Depositary
Receipts (“ADRs”), European Depositary Receipts (“EDRs) and Global Depositary
Receipts (“GDRs”). The Fund may also invest in real estate investment trusts
(“REITs”), foreign real estate companies, emerging market and frontier market
securities, limited partnerships, and master limited partnerships (“MLPs”)
(limited partnerships in which the ownership units are publicly traded). The
Fund may invest in a wide range of industries. However, from time to time, the
Fund may invest, to a significant extent, in securities of companies in the same
economic sector. As of February 29, 2024, 27.58% of the Fund’s total investments
were invested in the industrials sector.
In
evaluating an investment for purchase by the International Small Cap Fund, the
Adviser conducts a thorough fundamental assessment of the business, with a focus
on those challenges that have created the value opportunity. The Adviser
examines material issues that can influence the company’s long-term performance
and risk profile. As a part of this process, the Adviser speaks with
competitors, customers, and suppliers; conducts field research such as site
visits to plants, stores, or other facilities; analyzes the financials and
public filings of the company and its competitors; focuses on the company’s
underlying financial condition and business prospects considering estimated
earnings, economic conditions, degree of competitive or pricing pressures, the
experience and competence of management; and integrates environmental, social
and governance (“ESG”) considerations, which can vary across companies and
industries (ESG considerations may include, but are not limited to,
environmental impact, corporate governance and ethical business practices). The
Adviser believes that assessing the potential impact of ESG issues on a company
is critical to the investment process, both in terms of downside risk analysis
and assessing future earnings upside potential.
While
ESG-related issues are analyzed for each company before and during ownership,
the evaluation of all key investment considerations, including ESG issues, is
company-specific. Each is analyzed internally, discussed with company management
and industry experts and monitored. The Adviser evaluates all issues head-on,
takes a view as to whether the company can remediate them, and will actively
engage management, if necessary, if it decides to become shareholders. The
Adviser believes that investing in times of controversy can result in
significant future upside, assuming the risks and turnaround potential are
appropriately analyzed and, where possible, priced in at the point of
investment. Consequently, no one issue, ESG-related or otherwise, necessarily
disqualifies a company from investment, and no individual characteristic must be
present prior to investment.
Each
step of this process contributes to the Adviser’s determination of whether to
invest and at what position size. Once an investment has been made, the Adviser
continues to engage with the company on an ongoing basis to exert a
constructive, long-term oriented influence on the trajectory of the company.
The
Adviser’s sell discipline is guided by the same process with which the Adviser
originally screens the investment universe. The Adviser typically sells a
security when it reaches what the Adviser judges to be fair value, there are
more attractive opportunities or there is a change in company
fundamentals.
Principal
Risks
By
itself, the Fund is not a complete, balanced investment plan. The Fund cannot
guarantee that it will achieve its investment objectives. Losing all or a
portion of your investment is a risk of investing in the International Small Cap
Fund. The following additional risks could affect the value of
your investment:
•General
Market Risk.
Economies
and financial markets throughout the world are becoming increasingly
interconnected, which increases the likelihood that events or conditions in one
country or region will adversely impact markets or issuers in other countries or
regions. Securities in the Fund’s portfolio may underperform in comparison to
securities in general financial markets, a particular financial market or other
asset classes due to a number of factors, including: inflation (or expectations
for inflation); interest rates; global demand for particular products or
resources; natural disasters or events; pandemic diseases; terrorism; regulatory
events; and government controls. U.S. and international markets have experienced
significant periods of volatility in recent years and months due to a number of
economic, political and global macro factors, which has resulted in disruptions
to business operations and supply chains, stress on the global healthcare
system, growth concerns in the U.S. and overseas, staffing shortages and the
inability to meet consumer demand, and widespread
concern and uncertainty. Continuing uncertainties regarding interest
rates, rising inflation, political events, rising government debt in the U.S.
and trade tensions also contribute to market volatility. Conflict, loss of life
and disaster connected to ongoing armed conflict between Ukraine and Russia in
Europe and Israel and Hamas in the Middle East could have severe adverse effects
on the region, including significant adverse effects on the regional or global
economies and the markets for certain securities. The U.S. and the European
Union imposed sanctions on certain Russian individuals and companies, including
certain financial institutions, and have limited certain exports and imports to
and from Russia. The war has contributed to recent market volatility and may
continue to do so.
•Management
Risk. The
International Small Cap Fund is an actively managed investment portfolio and the
Fund relies on the Adviser’s ability to pursue the Fund’s goal. The Adviser will
apply its investment techniques and risk analyses in making investment decisions
for the Fund, but there can be no guarantee that its decisions will produce the
desired results.
•Equity
Securities Risk. The price of equity securities may rise or fall because of economic
or political changes or changes in a company’s financial condition, sometimes
rapidly or unpredictably. These price movements may result from factors
affecting individual companies, sectors or industries selected for the Fund’s
portfolio or the securities market as a whole, such as changes in economic or
political conditions.
•Value
Style Investing Risk. The
Fund emphasizes a “value” style of investing, which targets undervalued
companies with characteristics for improved valuations. This style of investing
is subject to the risk that the valuations never improve or that the returns on
“value” securities may not move in tandem with the returns on other styles of
investing or the stock market in general.
•Small
Cap Company Risk.
Securities of companies with smaller market capitalizations tend to be more
volatile and less liquid than larger company stocks. Smaller companies may have
no or relatively short operating histories, or be newly public
companies.
•Liquidity
Risk.
Low or lack of trading volume may make it difficult to sell securities held by
the International Small Cap Fund at quoted market
prices.
•Sector
Emphasis Risk. The
securities of companies in the same or related businesses, if comprising a
significant portion of the International Small Cap Fund’s portfolio, could react
in some circumstances negatively to market conditions, interest rates and
economic, regulatory or financial developments and adversely affect the value of
the portfolio to a greater extent than if such business comprised a lesser
portion of the Fund’s portfolio.
◦Industrials
Sector Risk.
The industrials sector includes companies
that provide transportation services such as airlines, air freight and
logistics, railroads, marine, and trucking. It also includes manufacturers and
distributors of capital goods such as aerospace & defense, building
products, electrical equipment and machinery and companies that offer
construction & engineering services. It further includes providers of
commercial & professional services including printing, environmental and
facilities services, office services & supplies, security & alarm
services, human resource & employment services, research & consulting
services. The stock prices of companies in the industrials sector are affected
by supply and demand both for their specific product or service and for
industrials sector products in general. The products of manufacturing companies
may face product obsolescence due to rapid technological developments and
frequent new product introduction. Government regulation, world events and
economic conditions may affect the performance of companies in the industrials
sector. Companies in the industrials sector may be at risk for environmental
damage and product liability claims.
•Foreign
Securities Risk. Foreign
securities are subject to special risks in addition to those of issuers located
in the U.S. Foreign securities can be more volatile than domestic (U.S.)
securities. Securities markets of other countries are generally smaller than
U.S. securities markets. Many foreign securities may be less liquid than U.S.
securities, which could affect the International Small Cap Fund’s investments.
Foreign securities may be adversely affected by political instability; changes
in currency exchange rates; inefficient markets and higher transaction costs;
foreign economic conditions; or inadequate or different regulatory and
accounting standards.
•Emerging
Markets Risk. In
addition to the risks of foreign securities in general, investments in emerging
markets may be riskier than investments in or exposure to investments in the
U.S. and other developed markets for many reasons, including smaller market
capitalizations, greater price volatility, less liquidity, a higher degree of
political and economic instability (which can freeze, restrict or suspend
transactions in those investments, including cash), the impact of economic
sanctions, less governmental regulation and supervision of the financial
industry and markets, and less stringent financial reporting and accounting
standards and controls.
•Frontier
Markets Risk.
There is an additional increased risk of price volatility associated with
frontier market countries (pre-emerging markets), which may be further magnified
by currency fluctuations relative to the U.S. dollar. Frontier market
countries generally have smaller economies or less developed capital markets
than in more advanced emerging markets and, as a result, the risks of investing
in emerging market countries may be magnified in frontier market
countries.
•Depositary
Receipt Risk. Depositary receipts are subject to many of the risks associated with
investing directly in foreign securities, including, among other things,
political, social and economic developments abroad, currency movements and
different legal, regulatory and tax environments. In addition, holders of
depositary receipts may have limited voting rights, may not have the same rights
afforded to stockholders of a typical company in the event of a corporate
action, such as an acquisition, merger or rights offering, and may experience
difficulty in receiving company stockholder communications. There is no
guarantee that a financial institution will continue to sponsor a depositary
receipt, or that the depositary receipts will continue to trade on an exchange,
either of which could adversely affect the liquidity, availability and pricing
of the depositary receipt. Changes in foreign currency exchange rates will
affect the value of depositary receipts and, therefore, may affect the value of
your investment in the Fund.
•Currency
Risk.
Changes in foreign currency exchange rates will affect the value of what the
Fund owns and the Fund’s share price. Generally, when the U.S. dollar rises in
value against a foreign currency, an investment in that country loses value
because that currency is worth fewer U.S. dollars. Devaluation of a currency by
a country’s government or banking authority also will have a significant impact
on the value of any investments denominated in that currency. Currency markets
generally are not as regulated as securities markets and the risk may be higher
in emerging markets.
•Real
Estate Investment Trust (REIT) and Foreign Real Estate Company Risk.
Investments
in REITs and foreign real estate companies are subject to the same risks as
direct investments in real estate and mortgages which include, but are not
limited to, sensitivity to changes in real estate values and property taxes,
interest rate risk, tax and regulatory risk, fluctuations in rent schedules and
operating expenses, adverse changes in local, regional or general economic
conditions, deterioration of the real estate market and the financial
circumstances of tenants and sellers, unfavorable changes in zoning, building,
environmental and other laws, the need for unanticipated renovations, unexpected
increases in the cost of energy and environmental factors. In addition, the
underlying mortgage loans may be subject to the risks of default or of
prepayments that occur earlier or later than expected, and such loans may also
include so-called “sub-prime” mortgages. The value of REITs and foreign real
estate companies will also rise and fall in response to the management skill and
creditworthiness of the
issuer.
In particular, the value of these securities may decline when interest rates
rise and will also be affected by the real estate market and by the management
of the underlying properties. REITs and foreign real estate companies may be
more volatile and/or more illiquid than other types of equity securities. The
Fund will indirectly bear its proportionate share of expenses, including
management fees, paid by each REIT or foreign real estate company in which it
invests in addition to the expenses of the Fund.
•Limited
Partnership and MLP Risk.
Investments in securities (units) of partnerships, including MLPs, involve risks
that differ from an investment in common stock. Holders of the units
of limited partnerships have more limited control and limited rights to vote on
matters affecting the partnership. Certain tax risks are associated
with an investment in units of limited partnerships. In addition,
conflicts of interest may exist between common unit holders, subordinated unit
holders and the general partner of a limited partnership, including a conflict
arising as a result of incentive distribution payments. In addition, investments
in certain investment vehicles, such as limited partnerships and MLPs, may be
illiquid. Such partnership investments may also not provide daily pricing
information to their investors, which will require the Fund to employ fair value
procedures to value its holdings in such
investments.
Performance
The following
information provides some indication of the risks of investing in the
International Small Cap Fund. The bar chart shows the annual
returns for the Fund’s Institutional Class shares from year to year. The table
shows how the Fund’s average annual returns for 1-year, 5-years, and since
inception periods compare with those of a broad measure of market performance.
The Fund’s past performance,
before and after taxes, is not necessarily an indication of how the Fund will
perform in the future. Updated performance information is
available on the Fund’s website at www.pzenafunds.com
or by calling the Fund toll-free at 1-844-796-1996
(844-PZN-1996).
Calendar Year Total Returns
as of December 31 – Institutional Class
The
Fund’s calendar year-to-date return as of
March 31, 2024 was
3.11%. During the
period of time shown in the bar chart, the highest
return for a calendar quarter was 27.26% (quarter ended December 31, 2020)
and the lowest return for a
calendar quarter was -42.15% (quarter ended March 31,
2020).
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Average
Annual Total Returns (For
the period ended December 31, 2023) |
1
Year |
5
Years |
Since
Inception (7/02/2018) |
|
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| |
Institutional
Class |
|
| |
Return
Before Taxes |
22.66% |
9.18% |
5.16% |
Return After
Taxes on Distributions |
21.64% |
8.67% |
4.59% |
Return After
Taxes on Distributions and Sale of Fund Shares |
14.49% |
7.36% |
4.06% |
Investor
Class |
|
| |
Return
Before Taxes |
22.34% |
8.89% |
4.87% |
MSCI
WORLD ex USA Small Cap Index (reflects no deduction for
fees, expenses or taxes) |
12.62% |
7.05% |
3.17% |
MSCI
WORLD ex USA Small Cap Value Index Net (reflects no deduction for
fees, expenses or taxes) |
14.70% |
7.08% |
3.57% |
The after-tax returns were
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns are not relevant to investors who hold shares of the
International Small Cap Fund through tax-deferred arrangements, such as 401(k)
plans or individual retirement accounts
(“IRAs”).
Management
Investment
Adviser. Pzena
Investment Management, LLC is the International Small Cap Fund’s investment
adviser.
Portfolio
Managers. Mr.
Matthew J. Ring (Principal and Portfolio Manager) and Mr. Jason Doctor
(Principal and Portfolio Manager) are the portfolio managers primarily
responsible for the day-to-day management of the International Small Cap Fund’s
portfolio. Mr. Ring has managed the Fund since its inception in July 2018,
and Mr. Doctor has managed the Fund since January 2023.
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem International Small Cap Fund shares on any
business day by written request via mail (Pzena International Small Cap Value
Fund, c/o U.S. Bank Global Fund Services, P.O. Box 701, Milwaukee,
Wisconsin 53201-0701), by telephone at 1-844-796-1996 (844-PZN-1996), or through
a financial intermediary. You may also purchase or redeem Fund shares by wire
transfer. Investors who wish to purchase, exchange or redeem Fund shares through
a financial intermediary should contact the financial intermediary directly. The
minimum initial and subsequent investment amounts are shown below.
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Type
of Account |
To
Open Your Account |
To
Add to Your Account |
Investor
Class |
| |
Regular |
$5,000 |
$100 |
Retirement
Accounts |
$1,000 |
$100 |
Institutional
Class |
$1,000,000 |
Any
Amount |
Tax
Information
The
International Small Cap Fund’s distributions are taxable, and will be taxed as
ordinary income or capital gains, unless you invest through a tax-deferred
arrangement, such as a 401(k) plan or an individual retirement account (“IRA”).
Distributions on investments made through tax-deferred arrangements may be taxed
later upon withdrawal of assets from those accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase International Small Cap Fund shares through a broker-dealer or
other financial intermediary, the Fund and/or the Adviser may pay the
intermediary for the sale of Fund shares and related services. These payments
may create conflicts of interest by influencing the broker-dealer or other
intermediary and your salesperson to recommend the Fund over another investment.
Ask your salesperson or visit your financial intermediary’s website for more
information.
SUMMARY
SECTION
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Pzena
International Value Fund |
Investment
Objective
The
Pzena International Value Fund (the “International Value Fund” or
“Fund”)
seeks
to achieve long-term capital appreciation.
Fees and Expenses of the
Fund
This
table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund. You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the table
and example below.
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| Investor Class |
Institutional Class |
SHAREHOLDER
FEES
(fees
paid directly from your investment) |
None |
None |
ANNUAL
FUND OPERATING EXPENSES
(expenses
that you pay each year as a percentage of the value of your
investment) |
Management
Fees |
0.65 |
% |
0.65 |
% |
Distribution
and Service (Rule 12b-1) Fees |
0.25 |
% |
None |
Other
Expenses (includes Shareholder Servicing Plan Fee) |
0.57 |
% |
0.47 |
% |
Shareholder
Servicing Plan Fee |
0.10% |
None |
Total
Annual Fund Operating Expenses(1) |
1.47 |
% |
1.12 |
% |
Less:
Fee Waiver and/or Expense Reimbursement(2) |
-0.37 |
% |
-0.37 |
% |
Total
Annual Fund Operating Expenses After Fee Waiver and/or Expense
Reimbursement |
1.10 |
% |
0.75 |
% |
(1)Total
Annual Fund Operating Expenses reflect the maximum Rule 12b-1 fee and/or
Shareholder Servicing Plan fee allowed, while the Expense Ratios in the
Financial Highlights section of the statutory prospectus reflect actual
operating expenses of the International Value Fund and do not include 0.01% that
is attributed to acquired fund fees and expenses (“AFFE”).
(2)Pzena
Investment Management, LLC (the “Adviser”) has contractually agreed to waive a
portion or all of its management fees and pay International Value Fund expenses
in order to limit Total Annual Fund Operating Expenses After Fee Waiver
(excluding AFFE, interest, taxes, extraordinary expenses and class specific
expenses, such as the distribution (12b-1) fee of 0.25% or shareholder servicing
plan fee of 0.10%), to 0.74% of average daily net assets of the Fund (the
“Expense Cap”). The Expense Cap will remain in effect through at least
June 28,
2025. The Adviser may request recoupment of previously waived
fees and paid expenses from the Fund for 36 months from the date they were
waived or paid, subject to the Expense Cap at the time such amounts were waived
or at the time of recoupment, whichever is lower.
Example. This Example is intended to help you compare the cost of investing
in the Fund with the cost of investing in other mutual funds. The Example
assumes that you invest $10,000 in the Fund for the time periods indicated and
then redeem all of your shares at the end of those periods. The Example also
assumes that your investment has a 5% return each year and that the Fund’s
operating expenses remain the same (taking into account the Expense Cap only in
the first year). Although your actual costs may be higher
or lower, based on these assumptions your costs would
be:
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1
Year |
3
Years |
5
Years |
10
Years |
| |
Investor
Class |
$112 |
$428 |
$768 |
$1,726 |
| |
Institutional
Class |
$77 |
$319 |
$581 |
$1,330 |
| |
Portfolio
Turnover.
The Fund pays transaction costs, such as commissions, when it buys
and sells securities (or “turns over” its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the Example, affect the Fund’s
performance. During the most recent fiscal year, the Fund’s portfolio turnover
rate was 16% of the average value of its
portfolio.
Principal Investment
Strategies
Under normal
market conditions the International Value Fund invests at least 80% of its net
assets (plus any borrowings for investment purposes) in common stocks of
Developed Market companies, not including U.S. companies. The
Fund defines “Developed Markets” primarily as those classified as developed by
Morgan Stanley Capital International (“MSCI”). The Adviser determines a
company’s country by referring to: its stock exchange listing; where it is
registered, organized or incorporated; where its headquarters are located; its
MSCI country classification; where it derives at least 50% of its revenues or
profits from goods produced or sold, investments made, or services performed; or
where at least 50% of its assets are located.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 60 to 80 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in stocks that, in the
opinion of the Adviser, sell at a substantial discount to their intrinsic value
but have solid long-term prospects. The Fund may gain exposure to Developed
Markets and emerging market companies by purchasing equity securities directly
or in the form of depositary receipts, such as American Depositary Receipts
(“ADRs”), European Depositary Receipts (“EDRs) and Global Depositary Receipts
(“GDRs”). The Fund may invest up to 15% of its net assets in emerging market and
frontier market securities. The Fund may also invest in real estate investment
trusts (“REITs”), foreign real estate companies, and up to 10% of its net assets
in limited partnerships, and master limited partnerships (“MLPs”) (limited
partnerships in which the ownership units are publicly traded). The Fund may
invest in a wide range of industries. However, from time to time, the Fund may
invest, to a significant extent, in securities of companies in the same economic
sector. As of February 29, 2024, 25.61% of the Fund’s total investments were
invested in the financial services sector.
In
evaluating an investment for purchase by the International Value Fund, the
Adviser conducts a thorough fundamental assessment of the business, with a focus
on those challenges that have created the value opportunity. The Adviser
examines material issues that can influence the company’s long-term performance
and risk profile. As a part of this process, the Adviser speaks with
competitors, customers, and suppliers; conducts field research such as site
visits to plants, stores, or other facilities; analyzes the financials and
public filings of the company and its competitors; focuses on the company’s
underlying financial condition and business prospects considering estimated
earnings, economic conditions, degree of competitive or pricing pressures, the
experience and competence of management; and integrates environmental, social
and governance (“ESG”) considerations, which can vary across companies and
industries (ESG considerations may include, but are not limited to,
environmental impact, corporate governance and ethical business practices). The
Adviser believes that assessing the potential impact of ESG issues on a company
is critical to the investment process, both in terms of downside risk analysis
and assessing future earnings upside potential.
While
ESG-related issues are analyzed for each company before and during ownership,
the evaluation of all key investment considerations, including ESG issues, is
company-specific. Each is analyzed internally, discussed with company management
and industry experts and monitored. The Adviser evaluates all issues head-on,
takes a view as to whether the company can remediate them, and will actively
engage management, if necessary, if it decides to become shareholders. The
Adviser believes that investing in times of controversy can result in
significant future upside, assuming the risks and turnaround potential are
appropriately analyzed and, where possible, priced in at the point of
investment. Consequently, no one issue, ESG-related or otherwise, necessarily
disqualifies a company from investment, and no individual characteristic must be
present prior to investment.
Each
step of this process contributes to the Adviser’s determination of whether to
invest and at what position size. Once an investment has been made, the Adviser
continues to engage with the company on an ongoing basis to exert a
constructive, long-term oriented influence on the trajectory of the company.
The
Adviser’s sell discipline is guided by the same process with which the Adviser
originally screens the investment universe. The Adviser typically sells a
security when it reaches what the Adviser judges to be fair value, there are
more attractive opportunities or there is a change in company
fundamentals.
Principal
Risks
The
Fund cannot guarantee that it will achieve its investment objectives.
Losing all or a portion of your investment is a risk of investing
in the Fund. The following risks are considered principal and
could affect the value of your investment in the Fund:
•General
Market Risk.
Economies and financial markets throughout the world are becoming
increasingly interconnected, which increases the likelihood that events or
conditions in one country or region will adversely impact markets or issuers in
other countries or regions. Securities in the Fund’s portfolio may underperform
in comparison to securities in general financial markets, a particular financial
market or other asset classes due to a number of factors, including: inflation
(or expectations for inflation); interest rates; global demand for particular
products or resources; natural disasters or events; pandemic diseases;
terrorism; regulatory events; and government controls. U.S. and international
markets have experienced significant periods of volatility in recent years and
months due to a number of economic, political and global macro factors, which
has resulted in disruptions to business operations and supply chains, stress on
the global healthcare system, growth concerns in the U.S. and overseas, staffing
shortages and the inability to meet consumer demand, and widespread concern and
uncertainty. Continuing uncertainties regarding interest rates, rising
inflation, political events, rising government debt in the U.S. and trade
tensions also contribute to market volatility. Conflict, loss of life and
disaster connected to ongoing armed conflict between Ukraine and Russia in
Europe and Israel and Hamas in the Middle East could have severe adverse effects
on the region, including significant adverse effects on the regional or global
economies and the markets for certain securities. The U.S. and the European
Union imposed sanctions on certain Russian individuals and companies, including
certain financial institutions, and have limited certain exports and imports to
and from Russia. The war has contributed to recent market volatility and may
continue to do so.
•Management
Risk.
The International Value Fund is an actively managed investment portfolio and the
Fund relies on the Adviser’s ability to pursue the Fund’s goal. The Adviser will
apply its investment techniques and risk analyses in making investment decisions
for the Fund, but there can be no guarantee that its decisions will produce the
desired results.
•Equity
Securities Risk. The
price of equity securities may rise or fall because of economic or political
changes or changes in a company’s financial condition, sometimes rapidly or
unpredictably. These
price
movements may result from factors affecting individual companies, sectors or
industries selected for the Fund’s portfolio or the securities market as a
whole, such as changes in economic or political
conditions.
•Value
Style Investing Risk.
The Fund emphasizes a “value” style of investing, which targets undervalued
companies with characteristics for improved valuations. This style of investing
is subject to the risk that the valuations never improve or that the returns on
“value” securities may not move in tandem with the returns on other styles of
investing or the stock market in general.
•Foreign
Securities Risk. Foreign
securities are subject to special risks in addition to those of issuers located
in the U.S. Foreign securities can be more volatile than domestic (U.S.)
securities. Securities markets of other countries are generally smaller than
U.S. securities markets. Many foreign securities may be less liquid than U.S.
securities, which could affect the International Value Fund’s investments.
Foreign securities may be adversely affected by political instability; changes
in currency exchange rates; inefficient markets and higher transaction costs;
foreign economic conditions; or inadequate or different regulatory and
accounting standards.
•Depositary
Receipt Risk. Depositary receipts are subject to many of the risks associated with
investing directly in foreign securities, including, among other things,
political, social and economic developments abroad, currency movements and
different legal, regulatory and tax environments. In addition, holders of
depositary receipts may have limited voting rights, may not have the same rights
afforded to stockholders of a typical company in the event of a corporate
action, such as an acquisition, merger or rights offering, and may experience
difficulty in receiving company stockholder communications. There is no
guarantee that a financial institution will continue to sponsor a depositary
receipt, or that the depositary receipts will continue to trade on an exchange,
either of which could adversely affect the liquidity, availability and pricing
of the depositary receipt. Changes in foreign currency exchange rates will
affect the value of depositary receipts and, therefore, may affect the value of
your investment in the Fund.
•Emerging
Markets Risk. In
addition to the risks of foreign securities in general, investments in emerging
markets may be riskier than investments in or exposure to investments in the
U.S. and other developed markets for many reasons, including smaller market
capitalizations, greater price volatility, less liquidity, a higher degree of
political and economic instability (which can freeze, restrict or suspend
transactions in those investments, including cash), the impact of economic
sanctions, less governmental regulation and supervision of the financial
industry and markets, and less stringent financial reporting and accounting
standards and controls.
•Frontier
Markets Risk.
There is an additional increased risk of price volatility associated with
frontier market countries (pre-emerging markets), which may be further magnified
by currency fluctuations relative to the U.S. dollar. Frontier market countries
generally have smaller economies or less developed capital markets than in more
advanced emerging markets and, as a result, the risks of investing in emerging
market countries may be magnified in frontier market
countries.
•Currency
Risk.
Changes in foreign currency exchange rates will affect the value of what the
Fund owns and the Fund’s share price. Generally, when the U.S. dollar rises in
value against a foreign currency, an investment in that country loses value
because that currency is worth fewer U.S. dollars. Devaluation of a currency by
a country’s government or banking authority also will have a significant impact
on the value of any investments denominated in that currency. Currency markets
generally are not as regulated as securities markets and the risk may be higher
in emerging markets.
•Sector
Emphasis Risk.
The securities of companies in the same or related businesses, if comprising a
significant portion of the International Value Fund’s portfolio, could react in
some circumstances negatively to market conditions, interest rates and economic,
regulatory or financial developments
and
adversely affect the value of the portfolio to a greater extent than if such
business comprised a lesser portion of the Fund’s
portfolio.
◦Financial
Services Sector Risk. Risks of investing in the
financial services sector include: (i) systemic risk: factors outside the
control of a particular financial institution may adversely affect the ability
of the financial institution to operate normally or may impair its financial
condition; (ii) regulatory actions: financial services companies may suffer
setbacks if regulators change the rules under which they operate; (iii) changes
in interest rates: unstable and/or rising interest rates may have a
disproportionate effect on companies in the financial services sector; (iv)
non-diversified loan portfolios: financial services companies may have
concentrated portfolios that make them vulnerable to economic conditions that
affect an industry; (v) credit: financial services companies may have exposure
to investments or agreements that may lead to losses; and (vi) competition: the
financial services sector has become increasingly
competitive.
•Liquidity
Risk. Low or lack of trading volume may make it difficult to sell
securities held by the International Value Fund at quoted market
prices.
•Newer
Fund Risk.
The International Value Fund is newer with limited operating history and there
can be no assurance that the Fund will grow to or maintain an economically
viable size, in which case the Board may determine to liquidate the
Fund.
•Real
Estate Investment Trust (REIT) and Foreign Real Estate Company Risk.
Investments in REITs and foreign real estate companies are subject to the same
risks as direct investments in real estate and mortgages which include, but are
not limited to, sensitivity to changes in real estate values and property taxes,
interest rate risk, tax and regulatory risk, fluctuations in rent schedules and
operating expenses, adverse changes in local, regional or general economic
conditions, deterioration of the real estate market and the financial
circumstances of tenants and sellers, unfavorable changes in zoning, building,
environmental and other laws, the need for unanticipated renovations, unexpected
increases in the cost of energy and environmental factors. In addition, the
underlying mortgage loans may be subject to the risks of default or of
prepayments that occur earlier or later than expected, and such loans may also
include so-called “sub-prime” mortgages. The value of REITs and foreign real
estate companies will also rise and fall in response to the management skill and
creditworthiness of the issuer. In particular, the value of these securities may
decline when interest rates rise and will also be affected by the real estate
market and by the management of the underlying properties. REITs and foreign
real estate companies may be more volatile and/or more illiquid than other types
of equity securities. The Fund will indirectly bear its proportionate share of
expenses, including management fees, paid by each REIT or foreign real estate
company in which it invests in addition to the expenses of the
Fund.
•Limited
Partnership and MLP Risk. Investments
in securities (units) of partnerships, including MLPs, involve risks that differ
from an investment in common stock. Holders of the units of limited partnerships
have more limited control and limited rights to vote on matters affecting the
partnership. Certain tax risks are associated with an investment in units of
limited partnerships. In addition, conflicts of interest may exist between
common unit holders, subordinated unit holders and the general partner of a
limited partnership, including a conflict arising as a result of incentive
distribution payments. In addition, investments in certain investment vehicles,
such as limited partnerships and MLPs, may be illiquid. Such partnership
investments may also not provide daily pricing information to their investors,
which will require the Fund to employ fair value procedures to value its
holdings in such investments.
Performance
The following
information provides some indication of the risks of investing in the
International Value Fund. The bar chart shows the annual returns
for the Fund’s Institutional Class shares from year to year. The table shows how
the Fund’s average annual returns for 1-year and since inception periods compare
with those of a broad measure of market performance. The Fund’s past
performance, before and after taxes, is not necessarily an indication of how the
Fund will perform in the future. Updated performance information
is available on the Fund’s website at www.pzenafunds.com
or by calling the Fund toll-free at 1-844-796-1996
(844-PZN-1996).
Calendar Year Total Returns
as of December 31 – Institutional Class
The
Fund’s calendar year-to-date return as of
March 31, 2024 was
2.08%. During the
period of time shown in the bar chart, the highest
return for a calendar quarter was 21.56% (quarter ended December 31, 2022) and
the lowest return for a
calendar quarter was -12.50% (quarter ended June 30,
2022).
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Average
Annual Total Returns (For
the period ended December 31, 2023) |
1
Year |
Since
Inception (6/28/2021) |
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Institutional
Class |
| |
Return
Before Taxes |
18.15% |
2.17% |
Return
After Taxes on Distributions |
17.84% |
1.94% |
Return
After Taxes on Distributions and Sale of Fund
Shares |
11.37% |
1.83% |
Investor
Class |
| |
Return
Before Taxes |
17.88% |
1.94% |
MSCI
EAFE Index Net (reflects no deduction for
fees, expenses or taxes) |
18.24% |
0.93% |
MSCI
EAFE Value Index Net (reflects no deduction for
fees, expenses or taxes) |
18.95% |
4.30% |
The after-tax returns were
calculated using the historical highest individual federal marginal income tax
rates and do not reflect the impact of state and local taxes.
Actual after-tax returns
depend on an investor’s tax situation and may differ from those shown, and
after-tax returns are not relevant to investors who hold shares of the
International Value Fund through tax-deferred arrangements, such as 401(k) plans
or individual retirement accounts (“IRAs”).
Management
Investment
Adviser. Pzena
Investment Management, LLC is the International Value Fund’s investment
adviser.
Portfolio
Managers. Ms.
Caroline Cai (Managing Principal, Chief Executive Officer and Portfolio
Manager), Mr. John P. Goetz (Managing Principal, Co-Chief Investment Officer and
Portfolio Manager), Ms. Allison Fisch (Managing Principal, President and
Portfolio Manager) and Mr. Rakesh Bordia (Principal and Portfolio Manager) are
the portfolio managers primarily responsible for the day-to-day management of
the International Value Fund’s portfolio. Ms. Cai, Mr. Goetz and Ms. Fisch have
managed the Fund since its inception in June 2021, and Mr. Bordia has managed
the Fund since January 2023.
Purchase
and Sale of Fund Shares
You
may purchase, exchange or redeem International Value Fund shares on any business
day by written request via mail (Pzena International Value Fund, c/o U.S. Bank
Global Fund Services, P.O. Box 701, Milwaukee, Wisconsin 53201-0701), by
telephone at 1-844-796-1996 (844-PZN-1996), or through a financial intermediary.
You may also purchase or redeem Fund shares by wire transfer. Investors who wish
to purchase, exchange or redeem Fund shares through a financial intermediary
should contact the financial intermediary directly. The minimum initial and
subsequent investment amounts are shown below.
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Type
of Account |
To
Open Your Account |
To
Add to Your Account |
Investor
Class |
| |
Regular |
$5,000 |
$100 |
Retirement
Accounts |
$1,000 |
$100 |
Institutional
Class |
$1,000,000 |
Any
Amount |
Tax
Information
The
International Value Fund’s distributions are taxable, and will be taxed as
ordinary income or capital gains, unless you invest through a tax-deferred
arrangement, such as a 401(k) plan or an individual retirement account (“IRA”).
Distributions on investments made through tax-deferred arrangements may be taxed
later upon withdrawal of assets from those accounts.
Payments
to Broker-Dealers and Other Financial Intermediaries
If
you purchase International Value Fund shares through a broker-dealer or other
financial intermediary, the Fund and/or the Adviser may pay the intermediary for
the sale of Fund shares and related services. These payments may create
conflicts of interest by influencing the broker-dealer or other intermediary and
your salesperson to recommend the Fund over another investment. Ask your
salesperson or visit your financial intermediary’s website for more
information.
PRINCIPAL
INVESTMENT STRATEGIES, RELATED RISKS, AND
DISCLOSURE
OF PORTFOLIO HOLDINGS
Principal
Investment Objectives
Each
Fund’s investment objective described in the respective Summary Section is
non-fundamental and may be changed without shareholder approval upon 60 days’
written notice to shareholders. There is no assurance that each Fund will
achieve its investment objective.
Principal
Investment Strategies
Mid
Cap Fund
Under
normal market conditions, the Mid Cap Fund invests at least 80% of its net
assets (plus any borrowings for investment purposes) in stocks of “mid-cap”
companies. The Fund defines a “mid-cap” company as an issuer whose market
capitalization at the time of initial purchase, is in the range of those found
within the market capitalization range of the companies in the Russell
Midcap®
Index (“mid-cap companies”). As of May 31, 2024, the market capitalization of
companies in the Russell Midcap®
Index ranged from $351 million to $91.26 billion. The Fund may continue to hold
a company with a market capitalization that appreciates above or depreciates
below the market capitalization threshold and thus may from time to time hold
less than 80% of its net assets in equity securities of mid-cap
companies.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 30 to 80 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in mid cap company
stocks that, in the opinion of the Adviser, sell at a substantial discount to
their intrinsic value but have solid long-term prospects. Though the Fund
primarily invests in U.S. listed companies, it may also invest up to 20% of its
net assets in shares of foreign companies, through ADRs or dollar-denominated
foreign securities. The Fund’s investments in foreign securities may include
investments in emerging markets securities. The Fund may also invest in REITs.
The Fund may also invest up to 10% of its net assets in limited partnerships and
MLPs. From time to time, the Fund may invest, to a significant extent, in
securities of companies in the same economic sector. As of February 29, 2024,
25.81% of the Fund’s total investments were invested in the financial services
sector.
In
evaluating an investment by the Mid Cap Fund, the Adviser focuses on the
company’s underlying financial condition and business prospects considering
estimated earnings, economic conditions, degree of competitive of pricing
pressures, the potential impacts of material ESG factors, and the experience and
competence of management, among other factors. No one issue, ESG-related or
otherwise, necessarily disqualifies a company from investment, and no individual
characteristic must be present prior to investment. The Adviser’s sell
discipline is guided by the same process with which the Adviser originally
screens the investment universe. The Adviser typically sells a security when it
reaches fair value, there are more attractive opportunities or there is a change
in company fundamentals.
In
the Adviser’s opinion, normal earnings provide the most accurate measure for
evaluating a company’s prospects by smoothing out extreme high and low periods
of earnings, and thus this is the measure on which the Adviser focuses. The
Adviser considers normal earnings to be a five-year estimate of what the company
should earn in a normal environment, based on research of the company’s history
and the history of its industry. Securities considered for investment will
typically include companies undergoing temporary stress in the present business
environment but where the Adviser judges there is a management
plan
or other mechanism by which earnings can be restored to the normal level.
Furthermore, the Adviser seeks companies with attributes that provide downside
valuation protection such as trough levels of cash flow and liquidation value.
The decision to add, sell or hold a security is determined by the stock’s
relative rank in the investment universe based on the price-to-normalized
earnings ratio relative to other companies in the universe and in the portfolio.
The weighting of the security in the portfolio is dependent on the security’s
valuation ranking, its volatility and liquidity, and the diversification it adds
to the current portfolio.
The
Mid Cap Fund will provide at least 60 days’ prior written notice to shareholders
of a change in the Fund’s non-fundamental policy of investing at least 80% of
its net assets (plus any borrowings for investment purposes) in the type of
investments suggested by the Fund’s name.
Small
Cap Fund
Under
normal market conditions, the Small Cap Fund invests at least 80% of its net
assets (plus any borrowings for investment purposes) in stocks of “small-cap”
companies. The Fund defines a “small-cap” company as an issuer whose market
capitalization at the time of initial purchase, is in the range of those found
in the Russell 2000®
Index during the most recent 11-month period (based on month-end data) plus the
most recent data during the current month (“small-cap companies”). As of May 31,
2024, the market capitalization of companies in the Russell 2000®
Index ranged from $10.79 million to $45.94 billion. The Fund may continue
to hold a company with a market capitalization that appreciates above or
depreciates below the market capitalization threshold and thus may from time to
time hold less than 80% of its net assets in equity securities of small-cap
companies.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 40 to 90 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in small-cap company
stocks that, in the opinion of the Adviser, sell at a substantial discount to
their intrinsic value but have solid long-term prospects. Though the Fund
primarily invests in U.S. listed companies, it may also invest up to 20% of its
net assets in shares of foreign securities,
through
ADRs or dollar-denominated foreign securities. The Fund’s investments in foreign
securities may include investments in emerging market securities. The Fund may
also invest in REITs. The Fund may also invest up to 10% of its net assets in
limited partnerships and MLPs. From time to time, the Fund may invest, to a
significant extent, in securities of companies in the same economic sector. As
of February 29, 2024, 30.34% of the Fund’s total investments were invested in
the industrial sector.
In
evaluating an investment by the Small Cap Fund, the Adviser focuses on the
company’s underlying financial condition and business prospects considering
estimated earnings, economic conditions, degree of competitive of pricing
pressures, the potential impacts of material ESG factors, and the experience and
competence of management, among other factors. No one issue, ESG-related or
otherwise, necessarily disqualifies a company from investment, and no individual
characteristic must be present prior to investment. The Adviser’s sell
discipline is guided by the same process with which the Adviser originally
screens the investment universe. The Adviser typically sells a security when it
reaches fair value, there are more attractive opportunities or there is a change
in company fundamentals.
In
the Adviser’s opinion, normal earnings provide the most accurate measure for
evaluating a company’s prospects by smoothing out extreme high and low periods
of earnings, and thus this is the measure on which the Adviser focuses. The
Adviser considers normal earnings to be a five-year estimate of what the company
should earn in a normal environment, based on research of the company’s history
and the
history
of its industry. Securities considered for investment will typically
include companies undergoing temporary stress in the present business
environment but where the Adviser judges there is a management plan or other
mechanism by which earnings can be restored to the normal level. Furthermore,
the Adviser seeks companies with attributes that provide downside valuation
protection such as trough levels of cash flow and liquidation value. The
decision to add, sell or hold a security is determined by the stock’s relative
rank in the investment universe based on the price-to-normalized earnings ratio
relative to other companies in the universe and in the portfolio. The weighting
of the security in the portfolio is dependent on the security’s valuation
ranking, its volatility and liquidity, and the diversification it adds to the
current portfolio.
The
Small Cap Fund will provide at least 60 days’ prior written notice to
shareholders of a change in the Fund’s non-fundamental policy of investing at
least 80% of its net assets (plus any borrowings for investment purposes) in the
type of investments suggested by the Fund’s name.
Emerging
Markets Fund
Under
normal market conditions, the Emerging Markets Fund invests at least 80% of its
net assets (plus any borrowings for investment purposes) in stocks of companies
located in emerging market countries. Emerging market companies are generally
located in, or operating within, newly industrialized countries or countries in
the beginning stages of development, such as most countries in Africa, Asia,
Latin America, the Middle East and Eastern Europe. This includes companies
located in, or primarily operating from, countries in the MSCI Emerging Markets
Index and/or MSCI Frontier Markets Index. The Adviser determines a company’s
country by referring to: its stock exchange listing; where it is registered,
organized or incorporated; where its headquarters are located; its MSCI country
classification; where it derives at least 50% of its revenues or profits from
goods produced or sold, investments made, or services performed; or where at
least 50% of its assets are located. In managing the Emerging Markets Fund’s
assets, the Adviser will look to invest in companies whose market capitalization
is primarily among the 1,500 largest companies as determined by the Adviser from
publicly available data sources at the time of purchase.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 40 to 80 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in stocks that, in the
opinion of the Adviser, sell at a substantial discount to their intrinsic value
but have solid long-term prospects. The Fund may gain exposure to emerging
market companies by purchasing equity securities in the form of depositary
receipts, such as ADRs, EDRs and GDRs. The Fund may also invest in REITs,
including foreign real estate companies operating in emerging markets. From time
to time, the Fund may invest, to a significant extent, in securities of
companies in the same economic sector. As of February 29, 2024, 29.27% of the
Fund’s total investments were invested in the financial services sector.
In
evaluating an investment by the Fund, the Adviser focuses on the company’s
underlying financial condition and business prospects considering estimated
earnings, economic conditions, degree of competitive or pricing pressures, the
potential impacts of material ESG factors, and the experience and competence of
management, among other factors. No one issue, ESG-related or otherwise,
necessarily disqualifies a company from investment, and no individual
characteristic must be present prior to investment.
In
the Adviser’s opinion, normal earnings provide the most accurate measure for
evaluating a company’s prospects by smoothing out extreme high and low periods
of earnings, and thus this is the measure on
which
the Adviser focuses. The Adviser considers normal earnings to be a five-year
estimate of what the company should earn in a normal environment, based on
research of the company’s history and the history of its industry. Securities
considered for investment will typically include companies undergoing temporary
stress in the present business environment but where the Adviser judges there is
a management plan or other mechanism by which earnings can be restored to the
normal level. Furthermore, the Adviser seeks companies with attributes that
provide downside valuation protection such as trough levels of cash flow and
liquidation value. The decision to add, sell or hold a security is determined by
the stock’s relative rank in the investment universe based on the
price-to-normalized earnings ratio relative to other companies in the universe
and in the portfolio. The weighting of the security in the portfolio is
dependent on the security’s valuation ranking, its volatility and liquidity, and
the diversification it adds to the current portfolio.
The
Emerging Markets Fund will provide at least 60 days’ prior written notice to
shareholders of a change in the Fund’s non-fundamental policy of investing at
least 80% of its net assets (plus any borrowings for investment purposes) in the
type of investments suggested by the Fund’s name.
International
Small Cap Fund
Under
normal market conditions the International Small Cap Fund invests at least 80%
of its net assets (plus any borrowings for investment purposes) in common stocks
of small-cap companies located in Developed Markets outside the U.S. The Fund
defines a “small-cap” company as an issuer whose market capitalization at the
time of initial purchase is in the range of those found in the MSCI World ex USA
Small Cap Index (the “Small Cap Index”), during the most recent 11-month period
(based on month-end data) plus the most recent data during the current month
(“small cap companies”). As of May 31, 2024, the market capitalization of
companies in the MSCI World ex USA Small Cap Index ranged from $158.50 million
to $11.45 billion. The Fund may continue to hold a company with a market
capitalization that appreciates above or depreciates below the market
capitalization threshold and thus may from time to time hold less than 80% of
its total assets in equity securities of small-cap companies. The Fund defines
“Developed Markets” primarily as those classified as developed by Morgan Stanley
Capital International (“MSCI”). The Adviser determines a company’s country by
referring to: its stock exchange listing; where it is registered, organized or
incorporated; where its headquarters are located; its MSCI country
classification; where it derives at least 50% of its revenues or profits from
goods produced or sold, investments made, or services performed; or where at
least 50% of its assets are located.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 40 to 90 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in stocks that, in the
opinion of the Adviser, sell at a substantial discount to their intrinsic value
but have solid long-term prospects. The Fund may gain exposure to Developed
Markets, emerging market and frontier market companies by purchasing equity
securities in the form of depositary receipts, such as ADRs, EDRs and GDRs. The
Fund may also invest in REITs, foreign real estate companies, emerging market
and frontier market securities, limited partnerships, and MLPs. The Fund may
invest in a wide range of industries. However, from time to time, the Fund may
invest, to a significant extent, in securities of companies in the same economic
sector. As of February 29, 2024, 27.58% of the Fund’s total investments were
invested in the industrials sector.
In
evaluating an investment by the International Small Cap Fund, the Adviser
focuses on the company’s underlying financial condition and business prospects
considering estimated earnings, economic conditions, degree of competitive of
pricing pressures, the potential impacts of material ESG factors, and
the
experience and competence of management, among other factors. No one issue,
ESG-related or otherwise, necessarily disqualifies a company from investment,
and no individual characteristic must be present prior to investment. The
Adviser’s sell discipline is guided by the same process with which the Adviser
originally screens the investment universe. The Adviser typically sells a
security when it reaches fair value, there are more attractive opportunities or
there is a change in company fundamentals.
In
the Adviser’s opinion, normal earnings provide the most accurate measure for
evaluating a company’s prospects by smoothing out extreme high and low periods
of earnings, and thus this is the measure on which the Adviser focuses. The
Adviser considers normal earnings to be a five-year estimate of what the company
should earn in a normal environment, based on research of the company’s history
and the history of its industry. Securities considered for investment will
typically include companies undergoing temporary stress in the present business
environment but where the Adviser judges there is a management plan or other
mechanism by which earnings can be restored to the normal level. Furthermore,
the Adviser seeks companies with attributes that provide downside valuation
protection such as trough levels of cash flow and liquidation value. The
decision to add, sell or hold a security is determined by the stock’s relative
rank in the investment universe based on the price-to-normalized earnings ratio
relative to other companies in the universe and in the portfolio. The weighting
of the security in the portfolio is dependent on the security’s valuation
ranking, its volatility and liquidity, and the diversification it adds to the
current portfolio.
The
International Small Cap Fund will provide at least 60 days’ prior written notice
to shareholders of a change in the Fund’s non-fundamental policy of investing at
least 80% of its net assets (plus any borrowings for investment purposes) in the
type of investments suggested by the Fund’s name.
International
Value Fund
Under
normal market conditions the International Value Fund invests at least 80% of
its net assets (plus any borrowings for investment purposes) in common stocks of
Developed Market companies, not including U.S. companies. The Fund defines
“Developed Markets” primarily as those classified as developed by MSCI. The
Adviser determines a company’s country by referring to: its stock exchange
listing; where it is registered, organized or incorporated; where its
headquarters are located; its MSCI country classification; where it derives at
least 50% of its revenues or profits from goods produced or sold, investments
made, or services performed; or where at least 50% of its assets are
located.
In
managing the Fund’s assets, the Adviser will follow a classic value strategy.
The Fund’s portfolio will generally consist of 60 to 80 stocks identified
through a research-driven, bottom-up security selection process based on
thorough fundamental research. The Fund seeks to invest in stocks that, in the
opinion of the Adviser, sell at a substantial discount to their intrinsic value
but have solid long-term prospects. The Fund may gain exposure to Developed
Markets and emerging market companies by purchasing equity securities directly
or in the form of depositary receipts, such as ADRs, EDRs and GDRs. The Fund may
invest up to 15% of its net assets in emerging market and frontier market
securities. The Fund may also invest in REITs, foreign real estate companies,
and up to 10% of its net assets in limited partnerships, and MLPs. The Fund may
invest in a wide range of industries. However, from time to time, the Fund may
invest, to a significant extent, in securities of companies in the same economic
sector. As of February 29, 2024, 25.61% of the Fund’s total investments were
invested in the financial services sector.
In
evaluating an investment by the International Value Fund, the Adviser focuses on
the company’s underlying financial condition and business prospects considering
estimated earnings, economic conditions, degree of competitive of pricing
pressures, the potential impacts of material environmental,
social
and governance (ESG) factors, and the experience and competence of management,
among other factors. No one issue, ESG-related or otherwise, necessarily
disqualifies a company from investment, and no individual characteristic must be
present prior to investment. The Adviser’s sell discipline is guided by the same
process with which the Adviser originally screens the investment universe. The
Adviser typically sells a security when it reaches fair value, there are more
attractive opportunities or there is a change in company fundamentals.
In
the Adviser’s opinion, normal earnings provide the most accurate measure for
evaluating a company’s prospects by smoothing out extreme high and low periods
of earnings, and thus this is the measure on which the Adviser focuses.
The
Adviser considers normal earnings to be a five-year estimate of what the company
should earn in a normal environment, based on research of the company’s history
and the history of its industry. Securities considered for investment will
typically include companies undergoing temporary stress in the present business
environment but where the Adviser judges there is a management plan or other
mechanism by which earnings can be restored to the normal level. Furthermore,
the Adviser seeks companies with attributes that provide downside valuation
protection such as trough levels of cash flow and liquidation value. The
decision to add, sell or hold a security is determined by the stock’s relative
rank in the investment universe based on the price-to-normalized earnings ratio
relative to other companies in the universe and in the portfolio. The weighting
of the security in the portfolio is dependent on the security’s valuation
ranking, its volatility and liquidity, and the diversification it adds to the
current portfolio.
The
International Value Fund will provide at least 60 days’ prior written notice to
shareholders of a change in the Fund’s non-fundamental policy of investing at
least 80% of its net assets (plus any borrowings for investment purposes) in the
type of investments suggested by the Fund’s name.
Principal
Investment Strategies Common to the Funds
The
Funds primarily invest in common stocks and may also invest in preferred stocks,
rights, warrants and convertible securities. From time to time, each Fund may
have a significant portion of its assets invested in securities of companies in
the same economic sector.
Foreign
Securities.
Each Fund may make significant investments in foreign securities. Each of the
Funds may invest in emerging markets. The Mid Cap Fund and Small Cap Fund each
invest primarily in domestic U.S. securities including securities in any U.S.
index, but reserve the right to invest up to 20% of their net assets in ADRs or
dollar-denominated foreign securities. The Adviser includes as a U.S. issuer a
company that maintains its principal place of business in the United States; has
at least 50% of its assets, revenues or earnings in the United States; or is
listed on a U.S. exchange or included in a U.S. index.
Value-Style
Investing. The
Adviser employs a classic value investment approach for the Funds, i.e.,
constructing portfolios of securities that are undervalued relative to their
long-term earnings power. The Adviser’s investment philosophy is to buy good
businesses when they go on sale. The Adviser generally seeks to invest in
companies with the following characteristics:
•low
price relative to the company’s normal earnings power;
•current
earnings are below normal;
•management
has a sound plan for earnings recovery;
•the
business has a history of earning attractive long-term returns; and
•the
Adviser believes much of the downside risk is already factored into the stock’s
price.
The
Adviser follows the same research and investment process for each of the Funds.
The Adviser begins by screening the investments with a proprietary computer
model to identify the deepest value portion of the investment universe, which
becomes the focus of the Adviser’s research efforts. After screening, the
Adviser conducts intensive fundamental research to understand the earnings power
of the business, the obstacles that it faces, and its plans for recovery. The
Adviser’s portfolio managers and in-house research analysts draw on diverse
sources of information such as company reports, research from brokers or
investment firms, press releases, prospectuses, U.S. Securities and Exchange
Commission filings, financial and trade newspapers and magazines, government and
trade association data, scholarly journals, online quotation services and
databases compiled by government agencies and others, and meetings with
management, suppliers, clients, competitors and industry consultants. After
completing the initial screening, the Adviser performs rigorous, in-depth
analysis that often includes discussions with senior company management and/or
onsite visits. Following the research process, a two-to four-person portfolio
management team makes the final investment decisions for each Fund. The Adviser
builds portfolios without regard to benchmarks. After an investment is made,
there is ongoing evaluation, as the Adviser continuously monitors and evaluates
each investment to assess new information.
The
Adviser’s sell discipline is guided by the same ranking system with which the
Adviser originally screens the investment universe. The Adviser typically sells
a security when it reaches the midpoint of its proprietary screening model which
the Adviser judges to be “fair value,” there are more attractive opportunities,
or there is a change in company fundamentals.
ESG
Considerations. In
evaluating an investment as applied to each Fund, the Adviser conducts a
thorough fundamental assessment of the business, with a focus on those
challenges that have created the value opportunity. The Adviser examines
material issues that can influence the company’s long-term performance and risk
profile. As a part of this process, the Adviser speaks with competitors,
customers, and suppliers; conducts field research such as site visits to plants,
stores, or other facilities; analyzes the financials and public filings of the
company and its competitors; focuses on the company’s underlying financial
condition and business prospects considering estimated earnings, economic
conditions, degree of competitive or pricing pressures, the experience and
competence of management; and integrates ESG considerations, which can vary
across companies and industries (ESG considerations may include, but are not
limited to, environmental impact, corporate governance and ethical business
practices).
The
Adviser believes that assessing the potential impact of ESG issues on a company
is critical to the investment process, both in terms of downside risk analysis
and assessing future earnings upside potential.
While
ESG-related issues are analyzed for each company before and during ownership,
the evaluation of all key investment considerations, including ESG issues, is
company-specific. Each is analyzed internally, discussed with company management
and industry experts and monitored. The Adviser evaluates all issues head-on,
takes a view as to whether the company can remediate them, and will actively
engage management, if necessary, if it decides to become shareholders. The
Adviser believes that investing in times of controversy can result in
significant future upside, assuming the risks and turnaround potential are
appropriately analyzed and, where possible, priced in at the point of
investment. Consequently, no one issue, ESG-related or otherwise, necessarily
disqualifies a company from investment, and no individual characteristic must be
present prior to investment.
Each
step of this process contributes to the Adviser’s determination of whether to
invest and at what position size. Once an investment has been made, the Adviser
continues to engage with the company on an ongoing basis to exert a
constructive, long-term oriented influence on the trajectory of the company.
The
Adviser’s sell discipline is guided by the same process with which the Adviser
originally screens the investment universe. The Adviser typically sells a
security when it reaches what the Adviser judges to be fair value, there are
more attractive opportunities or there is a change in company
fundamentals.
Temporary
or Cash Investments.
Under normal market conditions, the Funds stay fully invested according to their
principal investment strategies as noted above. The Funds, however, may
temporarily depart from their principal investment strategies by making
short-term investments in cash, cash equivalents, and high-quality, short-term
debt securities and money market instruments for temporary defensive purposes in
response to adverse market, economic, political or in other limited
circumstances, such as in the case of unusually large cash inflows or
redemptions. This may result in the Funds not achieving their investment
objectives during that period.
There
is no guarantee that the Funds will achieve their investment objectives. In
addition, for longer periods of time, each Fund may hold a substantial cash
position. If the market advances during periods when a Fund is holding a large
cash position, the Fund may not participate to the extent they would have if the
Funds had been more fully invested. To the extent that a Fund uses a money
market fund for its cash position, there will be some duplication of expenses
because the Fund would bear its pro rata portion of such money market fund’s
advisory fees and operational expenses.
From
time to time, the Funds may experience significant inflows; if this occurs, the
Funds may, on a temporary or interim basis, invest these new assets in other
investment companies, including ETFs, until such time as the Adviser can
identify and invest in appropriate securities in accordance with each Fund’s
principal strategy.
Principal
Risks
There
is the risk that you could lose money by investing in the Funds. The value of
your investment in the Funds will fluctuate as the stocks in the Funds’
portfolios change in price. The prices of the stocks the Adviser selects may
decrease in value. Also, the stock market may decline suddenly, and for extended
periods, adversely affecting the prices of the stocks held by the Funds. By
themselves, the Funds are not complete, balanced investment plans and the
success of the Funds cannot be predicted. The Fund’s principal risks are set
forth below.
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Cap Value |
Small
Cap Value |
Emerging
Markets Value |
International
Small Cap |
International
Value |
Currency
Risk |
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Depositary
Receipt Risk |
• |
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Emerging
Markets Risk |
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Equity
Securities Risk |
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Financial
Services Sector Risk |
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Foreign
Securities Risk |
• |
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Frontier
Markets Risk |
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General
Market Risk |
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Industrial
Sector Risk |
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Cap Value |
Small
Cap Value |
Emerging
Markets Value |
International
Small Cap |
International
Value |
Limited
Partnership and MLP Risk |
• |
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Liquidity
Risk |
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Management
Risk |
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Mid-Cap
Company Risk |
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Newer
Fund Risk |
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Real
Estate Investment Trust (REITs) |
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REITs
and Foreign Real Estate Company Risk |
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Sector
Emphasis Risk |
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Small-Cap
Company Risk |
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Value
Style Investing Risk |
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Risks
Common to the Funds
Currency
Risk. When
the Funds buy or sell securities on a foreign stock exchange, the transaction is
undertaken in the local currency rather than in U.S. dollars. If a Fund
purchases or sells local currency to execute transactions on foreign exchanges,
the Fund is exposed to the risk that the value of the foreign currency will
increase or decrease, which may impact the value of the Fund’s portfolio
holdings. Some countries have, and may continue to adopt internal economic
policies that affect their currency valuations in a manner that may be
disadvantageous for U.S. investors or U.S. companies seeking to do business in
those countries. In addition, a country may impose formal or informal currency
exchange controls. These controls may restrict or prohibit each Fund’s ability
to repatriate both investment capital and income, which could undermine the
value of a Fund’s portfolio holdings and potentially place a Fund’s assets at
risk of total loss. Changes in foreign currency exchange rates will affect the
value of what the Fund owns and the Fund’s share price. Generally, when the U.S.
dollar rises in value against a foreign currency, an investment in that country
loses value because that currency is worth fewer U.S. dollars. Devaluation of a
currency by a country’s government or banking authority also will have a
significant impact on the value of any investments denominated in that currency.
Currency markets generally are not as regulated as securities markets and the
risk may be higher in emerging markets. Currency risks may be greater in
emerging and frontier market countries than in developed market
countries.
Depositary
Receipt Risk.
Depositary receipts involve substantially identical risks to those associated
with direct investment in securities of foreign issuers. In addition, the
underlying issuers of certain depositary receipts, particularly unsponsored or
unregistered depositary receipts, are under no obligation to distribute
shareholder communications to the holders of such receipts, or to pass through
to them any voting rights with respect to the deposited securities. In addition,
holders of depositary receipts may have limited voting rights, may not have the
same rights afforded to stockholders of a typical company in the event of a
corporate action, such as an acquisition, merger or rights offering, and may
experience difficulty in receiving company stockholder communications. There is
no guarantee that a financial institution will continue to sponsor a depositary
receipt, or that the depositary receipts will continue to trade on an exchange,
either of which could adversely affect the liquidity, availability and pricing
of the depositary receipt. Changes in foreign currency exchange rates will
affect the value of depositary receipts and, therefore, may affect the value of
your investment in a Fund.
Emerging
Markets Risk.
The
Funds’ investments in emerging market countries are subject to all of the risks
of foreign investing generally, and have additional heightened risks. These
risks include less social,
political
and economic stability; smaller securities markets with low or nonexistent
trading volume and greater illiquidity and price volatility; more restrictive
national policies on foreign investment, including restrictions on investment in
issuers or industries deemed sensitive to national interests; less transparent
and established taxation policies; less developed regulatory or legal structures
governing private and foreign investment; less financial sophistication,
creditworthiness, and/or resources possessed by, and less government regulation
of, the financial institutions and issuers with which each Fund transacts; less
government supervision and regulation of business and industry practices, stock
exchanges, brokers and listed companies than in the United States; greater
concentration in a few industries resulting in greater vulnerability to regional
and global trade conditions; higher rates of inflation and more rapid and
extreme fluctuations in inflation rates; greater sensitivity to interest rate
changes; increased volatility in currency exchange rates and potential for
currency devaluations and/or currency controls; greater debt burdens relative to
the size of the economy; more delays in settling portfolio transactions and
heightened risk of loss from share registration and custody practices; and less
assurance that recent favorable economic developments will not be slowed or
reversed by unanticipated economic, political or social events in such
countries. Because of these risk factors, each Fund’s investments in developing
market countries are subject to greater price volatility and illiquidity than
investments in developed markets.
Equity
Securities Risk.
Each
Fund is designed for long-term investors who can accept the risks of investing
in a portfolio with significant common stock holdings. Common stocks tend to be
more volatile than other investment options such as bonds and money market
instruments. The value of a Fund’s shares will fluctuate as a result of the
movement of the overall stock market or of the value of the individual
securities held by a Fund, and you could lose money. A Fund’s shares and the
total return on your investment may experience sudden, unpredictable drops in
value or long periods of decline in value. This may occur because of factors
that affect the securities market generally, such as adverse changes in:
economic conditions, the general outlook for corporate earnings, interest rates,
or investor sentiment. Equity securities may also lose value because of factors
affecting an entire industry or sector, such as increases in production costs,
or factors directly related to a specific company, such as decisions made by its
management.
Financial
Services Sector Risk.
The financial services industry can be significantly affected by changes in
interest rates, the rate of corporate and consumer debt defaults, the
availability and cost of borrowing and raising capital, reduced credit market
liquidity, regulatory changes, price competition, bank failures and other
financial crises, and general economic and market conditions. Changing interest
rates could reduce the profitability of certain types of companies in the
financial services industry. Financial services companies may have concentrated
portfolios, such as a high level of loans to one or more industries or sectors,
which make them vulnerable to economic conditions that affect such industries or
sectors. Significant events may have a significant negative impact on economies
and financial markets worldwide, resulting in higher debt defaults, loan
write-offs, and government intervention, historically low interest rates, and
potentially the failure of some financial institutions, each of which would
reduce investment performance of financial services companies held by the Fund.
Future outbreaks of infectious disease or other natural disasters or crises
could have similar, or even more severe, impacts on the financial services
industry.
Foreign
Securities Risk.
Investments
in foreign securities (including depositary receipts), are subject to special
risks in addition to those of U.S. investments. These risks include political
and economic risks, civil conflicts and war, greater volatility, expropriation
and nationalization risks, sanctions or other measures by the United States or
other governments, currency fluctuations, higher transaction costs, delayed
settlement, possible foreign controls on investment, and less stringent investor
protection and disclosure standards of foreign markets. The securities markets
of many foreign countries are relatively
small,
with a limited number of companies representing a small number of industries. If
foreign securities are denominated and traded in a foreign currency, the value
of a Fund’s foreign holdings can be affected by currency exchange rates and
exchange control regulations. In certain markets where securities and other
instruments are not traded “delivery versus payment,” a Fund may not receive
timely payment for securities or other instruments it has delivered or receive
delivery of securities paid for and may be subject to increased risk that the
counterparty will fail to make payments or delivery when due or default
completely. Events and evolving conditions in certain economies or markets may
alter the risks associated with investments tied to countries or regions that
historically were perceived as comparatively stable becoming riskier and more
volatile.
Frontier
Markets Risk.
There is an additional increased risk of price volatility associated with
frontier market countries (pre-emerging markets), which may be further magnified
by currency fluctuations relative to the U.S. dollar. Frontier market
countries generally have smaller economies or less developed capital markets
than in more advanced emerging markets and, as a result, the risks of investing
in emerging market countries may be magnified in frontier market
countries.
General
Market Risk.
Economies
and financial markets throughout the world are becoming increasingly
interconnected, which increases the likelihood that events or conditions in one
country or region will adversely impact markets or issuers in other countries or
regions. Securities in a Fund’s portfolio may underperform in comparison to
securities in general financial markets, a particular financial market or other
asset classes due to a number of factors, including: inflation (or expectations
for inflation); interest rates; global demand for particular products or
resources; natural disasters or events; pandemic diseases; terrorism; regulatory
events; and government controls. U.S. and international markets have experienced
significant periods of volatility in recent years and months due to a number of
economic, political and global macro factors, which has resulted in disruptions
to business operations and supply chains, stress on the global healthcare
system, growth concerns in the U.S. and overseas, staffing shortages and the
inability to meet consumer demand, and widespread concern and uncertainty.
Continuing uncertainties regarding interest rates, rising inflation, political
events, rising government debt in the U.S. and trade tensions also contribute to
market volatility. Conflict, loss of life and disaster connected to ongoing
armed conflict between Ukraine and Russia in Europe and Israel and Hamas in the
Middle East could have severe adverse effects on the region, including
significant adverse effects on the regional or global economies and the markets
for certain securities. The U.S. and the European Union imposed sanctions on
certain Russian individuals and companies, including certain financial
institutions, and have limited certain exports and imports to and from Russia.
The war has contributed to recent market volatility and may continue to do so.
Industrials
Sector Risk.
Industrial companies are affected by supply and demand both for their specific
product or service and for industrial sector products in general. Government
regulation, world events, exchange rates and economic conditions, technological
developments and liabilities for environmental damage and general civil
liabilities will likewise affect the performance of these companies.
Aerospace
and defense companies, a component of the industrial sector, can be
significantly affected by government spending policies because companies
involved in this industry rely, to a significant extent, on U.S. and foreign
government demand for their products and services. Thus, the financial condition
of, and investor interest in, aerospace and defense companies are heavily
influenced by governmental defense spending policies which are typically under
pressure from efforts to control the U.S. (and other) government budgets.
Transportation securities, a component of the industrial sector, are cyclical
and have occasional sharp price movements which may result from changes in the
economy, fuel prices, labor agreements and insurance costs.
Limited
Partnership and MLP Risk.
The Funds may invest in limited partnerships and MLPs as a non-principal
strategy. To the extent that a limited partnership’s or MLP’s interests are all
in a particular industry, the limited partnership and/or MLP will be negatively
impacted by economic events adversely impacting that industry. The risks of
investing in a limited partnership or MLP are generally those involved in
investing in a partnership as opposed to a corporation. For example, state law
governing partnerships is often less restrictive than state law governing
corporations. Accordingly, there may be fewer protections afforded to investors
in a limited partnership or MLP than investors in a corporation. For example,
investors in limited partnerships and MLPs may have limited voting rights or be
liable under certain circumstances for amounts greater than the amount of their
investment. In addition, limited partnerships and MLPs may be subject to state
taxation in certain jurisdictions which will have the effect of reducing the
amount of income paid by the limited partnership or MLP to its investors. In
addition, conflicts of interest may exist between common unit holders,
subordinated unit holders and the general partner of a limited partnership,
including a conflict arising as a result of incentive distribution
payments.
Furthermore,
investments in certain investment vehicles, such as limited partnerships and
MLPs, may be illiquid. Such partnership investments may also not provide daily
pricing information to their investors, which will require the Fund to employ
fair value procedures to value its holdings in such investments.
Liquidity
Risk.
Liquidity
risk exists when the market for particular securities or types of securities is
or becomes relatively illiquid so a Fund is unable, or it becomes more difficult
for a Fund, to sell the security at the price at which the Fund has valued the
security. Illiquidity may result from political, economic or issuer specific
events or overall market disruptions. Securities with reduced liquidity or that
become illiquid involve greater risk than securities with more liquid markets.
Market quotations for illiquid securities may be volatile and/or subject to
large spreads between bid and ask prices. Reduced liquidity may have an adverse
impact on market price and the Fund’s ability to sell particular securities when
necessary to meet the Fund’s liquidity needs or in response to a specific
economic event. To the extent that a Fund and its affiliates hold a significant
portion of the issuer’s outstanding securities, the Fund may be subject to
greater liquidity risk than if the issuer’s securities were more widely held.
The market for Rule 144A securities typically is less active than the
market for public securities. Rule 144A securities carry the risk that the
trading market may not continue and the Fund might be unable to dispose of these
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemption requirements.
Management
Risk.
The Funds are actively managed investment portfolios and rely on the Adviser’s
ability to pursue the Funds’ goals. The Adviser will apply its investment
techniques and risk analyses in making investment decisions for the Funds, but
there can be no guarantee that these will produce the desired results. The
Adviser does not seek to replicate the performance of any index. Notwithstanding
its benchmark, each Fund may invest in securities not included in its benchmarks
or hold securities in very different proportions than its benchmarks. To the
extent a Fund invests in those securities, the Fund’s performance depends on the
ability of the Adviser to choose securities that perform better than securities
that are included in the benchmark. Additionally, legislative, regulatory or tax
developments may affect the investment techniques available to the portfolio
manager in connection with managing the Funds and may also adversely affect the
ability of the Funds to achieve their investment objectives.
Mid-Cap
Company Risk.
Investing
in securities of mid cap companies may involve greater risk than investing in
larger, more established companies because they can be subject to more abrupt or
erratic share price changes. Smaller companies may have limited product lines,
or limited market or financial resources and their management may be dependent
on a limited number of key individuals. Securities of
these
companies may have limited market liquidity and their prices may be more
volatile. These stocks present greater risks than securities of larger, more
diversified companies.
Newer
Fund Risk.
There can be no assurance that the International Value Fund will grow to or
maintain an economically viable size, in which case the Board of Trustees may
determine to liquidate the Fund. Liquidation of the Fund can be initiated
without shareholder approval by the Board of Trustees if it determines it is in
the best interest of shareholders. As a result, the timing of the Fund’s
liquidation may not be favorable to certain individual
shareholders.
REITs.
Investments
in REITs are subject to the same risks as direct investments in real estate and
mortgages which include, but are not limited to, sensitivity to changes in real
estate values and property taxes, interest rate risk, tax and regulatory risk,
fluctuations in rent schedules and operating expenses, adverse changes in local,
regional or general economic conditions, deterioration of the real estate market
and the financial circumstances of tenants and sellers, unfavorable changes in
zoning, building, environmental and other laws, the need for unanticipated
renovations, unexpected increases in the cost of energy and environmental
factors. In addition, the underlying mortgage loans may be subject to the risks
of default or of prepayments that occur earlier or later than expected, and such
loans may also include so-called “sub-prime” mortgages. The value of REITs will
also rise and fall in response to the management skill and creditworthiness of
the issuer. In particular, the value of these securities may decline when
interest rates rise and will also be affected by the real estate market and by
the management of the underlying properties. REITs may be more volatile and/or
more illiquid than other types of equity securities. The Fund will indirectly
bear its proportionate share of expenses, including management fees, paid by
each REIT in which it invests in addition to the expenses of the
Fund.
Sector
Emphasis Risk.
The Adviser’s value investment strategy of identifying investment opportunities
through a bottom-up process emphasizing internally generated fundamental
research, may from time to time result in a Fund investing significant amounts
of their portfolios in securities of issuers principally engaged in the same or
related businesses. Market conditions, interest rates and economic, regulatory
or financial developments could significantly affect a single business or a
group of related businesses. Sector emphasis risk is the risk that the
securities of companies in such business or businesses, if comprising a
significant portion of a Fund’s portfolio, could react in some circumstances
negatively to these or other developments and adversely affect the value of the
portfolio to a greater extent than if such business or businesses comprised a
lesser portion of a Fund’s portfolio.
Small-Cap
Company Risk.
Investing
in securities of small cap companies may involve greater risk than investing in
larger, more established companies because they can be subject to more abrupt or
erratic share price changes. Smaller companies may have limited product lines,
or limited market or financial resources and their management may be dependent
on a limited number of key individuals. Securities of these companies may have
limited market liquidity and their prices may be more volatile. These stocks
present greater risks than securities of larger, more diversified
companies.
Value
Style Investing Risk.
Certain
equity securities (generally referred to as value securities) are purchased
primarily because they are selling at prices below what the Adviser believes to
be their fundamental value and not necessarily because the issuing companies are
expected to experience significant earnings growth. Each Fund bears the risk
that the companies that issued these securities may not overcome the adverse
business developments or other factors causing their securities to be perceived
by the Adviser to be underpriced or that the market may never come to recognize
their fundamental value. A value stock may not increase in price, as anticipated
by the Adviser investing in such securities, if other investors fail to
recognize the company’s value and bid up the price or invest in markets favoring
faster
growing
companies. A Fund’s strategy of investing in value stocks also carries the risk
that in certain markets value stocks will under-perform growth
stocks.
PORTFOLIO
HOLDINGS INFORMATION
A
complete description of the Funds’ policies and procedures with respect to the
disclosure of the Funds’ portfolio holdings is available in the Funds’ Statement
of Additional Information (“SAI”) and on the Funds’ website at www.pzenafunds.com.
MANAGEMENT
OF THE FUNDS
Investment
Adviser
Pzena
Investment Management, LLC is the Funds’ investment adviser and provides
discretionary investment advisory services to the Funds pursuant to an
investment advisory agreement between the Adviser and the Trust (the “Advisory
Agreement”). The Adviser’s address is 320 Park Avenue, 8th Floor, New
York, New York 10022. The Adviser has provided investment advisory services to
individual and institutional accounts since 1996.
The
Adviser provides the Funds with advice on buying and selling securities. The
Adviser also furnishes the Funds with office space and certain administrative
services and provides most of the personnel needed by the Funds. For its
services in relation to the Funds, the Adviser is entitled to receive an annual
management fee, calculated daily and payable monthly, as shown in the table
below. However,
after applying fee waivers and expense reimbursements during the fiscal year
ended February 29, 2024, the Adviser received the corresponding amount shown
below:
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Fund |
Annual
Advisory Fee Entitled to Receive |
Advisory
Fees Received after Waivers for Fiscal Year Ended February 29,
2024 |
Mid
Cap Fund |
0.80% |
0.71% |
Small
Cap Fund |
0.95% |
0.49% |
Emerging
Markets Fund |
1.00% |
0.93% |
International
Small Cap Fund |
1.00% |
0.08% |
International
Value Fund |
0.65% |
0.28% |
A
discussion regarding the basis for the Board’s approval of the Advisory
Agreement for the Funds is available in the Funds’ annual report for the period
ended February 29, 2024.
Portfolio
Managers
Mid
Cap Fund
John
Flynn, Principal and Portfolio Manager
Mr.
Flynn joined the Adviser in 2005 and currently serves as a Portfolio Manager for
the Adviser. Mr. Flynn has co-managed the Mid Cap Focused Value strategy for the
Adviser since 2015. Mr. Flynn earned a B.A. in Music from Yale University and an
M.B.A. with distinction from the Harvard Business School.
Benjamin
S. Silver, CFA, Principal and Portfolio Manager
Mr.
Silver joined the Adviser in 2001 and currently serves as a Portfolio Manager
for the Adviser. Mr. Silver has co-managed the Mid Cap Focused Value strategy
for the Adviser since 2017. Mr. Silver earned a B.S. magna cum laude in
Accounting from Sy Syms School of Business at Yeshiva University. Mr. Silver
holds the Chartered Financial Analyst designation.
Evan
D. Fox, CFA, Principal and Portfolio Manager
Mr.
Fox joined the Adviser in 2007 and currently serves as a Portfolio Manager for
the Adviser. Mr. Fox has co-managed the Mid Cap Focused Value strategy for the
Adviser since 2024. Mr. Fox graduated summa cum laude from the University of
Pennsylvania with a B.S. in Economics from the Wharton School and a B.A.S. from
the School of Engineering and Applied Science. Mr. Fox holds the Chartered
Financial Analyst designation.
Small
Cap Fund
Evan
D. Fox, CFA, Principal and Portfolio Manager
Mr.
Fox joined the Adviser in 2007 and currently serves as a Portfolio Manager for
the Adviser. Mr. Fox has co-managed the Small Cap Value Fund since its inception
in 2016. Mr. Fox graduated summa cum laude from the University of Pennsylvania
with a B.S. in Economics from the Wharton School and a B.A.S. from the School of
Engineering and Applied Science. Mr. Fox holds the Chartered Financial Analyst
designation.
John
J. Flynn, Principal and Portfolio Manager
Mr.
Flynn joined the Adviser in 2005 and currently serves as a Portfolio Manager for
the Adviser. Mr. Flynn has co-managed the Small Cap Value Fund since its
inception in 2016. Mr. Flynn earned a B.A. in Music from Yale University and an
M.B.A. with distinction from the Harvard Business School.
Benjamin
S. Silver, CFA, Principal and Portfolio Manager
Mr.
Silver joined the Adviser in 2001 and currently serves as a Portfolio Manager
for the Adviser. Mr. Silver has co-managed the Small Cap Value Fund since its
inception in 2016. Mr. Silver earned a B.S. magna cum laude in Accounting from
Sy Syms School of Business at Yeshiva University. Mr. Silver holds the Chartered
Financial Analyst designation.
Emerging
Markets Fund
Allison
Fisch, Managing Principal, President, and Portfolio Manager
Ms.
Fisch joined the Adviser in 2001 and currently serves as President and as a
Portfolio Manager for the Adviser. Ms. Fisch has co-managed the Emerging Markets
Focused Value strategy for the Adviser since its inception in 2008. Ms. Fisch
holds a B.A., summa cum laude, in Psychology and a minor in Drama from Dartmouth
College.
Caroline
Cai, CFA, Managing Principal, Chief Executive Officer (“CEO”), and Portfolio
Manager
Ms.
Cai joined in the Adviser in 2004 and currently serves as CEO and as a Portfolio
Manager for the Adviser. Ms. Cai has co-managed the Emerging Markets Focused
Value strategy for the Adviser since 2009. Ms. Cai holds a B.A., summa cum
laude, in Mathematics and Economics from Bryn Mawr College and is a Chartered
Financial Analyst.
Rakesh
Bordia, Principal and Portfolio Manager
Mr.
Bordia joined the Adviser in 2007 and currently serves as a Portfolio Manager
for the Adviser. Mr. Bordia has co-managed the Emerging Markets Focused
Value strategy for the Adviser since April 2015. Mr. Bordia has a Bachelor of
Technology in Computer Science and Engineering from the Indian Institute of
Technology, Kanpur, India and an M.B.A. from the Indian Institute of Management,
Ahmedabad, India.
Akhil
Subramanian, Principal and Portfolio Manager
Mr.
Subramanian joined the Adviser in 2017 and currently serves as a Portfolio
Manager for the Adviser. Mr. Subramanian has co-managed the Emerging Markets
Focused Value strategy for the Adviser since January 2023. Mr. Subramanian
graduated with a B.S. in Mathematics and a B.A in Economics from the University
of Chicago, and an M.B.A. from Columbia Business School.
International
Small Cap Fund
Matthew
J. Ring, Principal and Portfolio Manager
Mr.
Ring joined the Adviser in 2010 and currently serves as a Portfolio Manager for
the Adviser. Mr. Ring has co-managed the International Small Cap Focused Value
strategy for the Adviser since its inception in 2016. Mr. Ring holds a B.S.
magna cum laude in Aerospace Engineering from the University of Notre Dame, a
Masters in Mechanical Engineering from The Ohio State University, and an M.B.A.
from Columbia Business School, graduating with honors.
Jason
Doctor, Principal and Portfolio Manager
Mr.
Doctor joined the Adviser in 2014 and currently serves as a Portfolio Manager
for the Adviser. Mr. Doctor has co-managed the International Small Cap Focused
Value strategy for the Adviser since January 2023. Mr. Doctor holds a B.S.F.S.
in International Economics from Georgetown University and holds the Chartered
Financial Analyst® designation.
International
Value Fund
Caroline
Cai, CFA, Managing Principal, Chief Executive Officer (“CEO”), and Portfolio
Manager
Ms. Cai
joined the Adviser in 2004 and currently serves as CEO and as a Portfolio
Manager for the Adviser. Ms. Cai has co-managed the International Value
strategy for the Adviser since 2009. Ms. Cai holds a B.A., summa cum laude,
in Mathematics and Economics from Bryn Mawr College and is a Chartered Financial
Analyst. Ms. Cai has been managing the Fund since its inception in June
2021.
John
Goetz, Managing Principal, Co-Chief Investment Officer, and Portfolio
Manager
Mr. Goetz
joined the Adviser in 1996 and currently serves as Co-Chief Investment Officer
for the Adviser. Mr. Goetz has co-managed the International Value strategy
for the Adviser since its inception in 2008. Mr. Goetz holds a B.A., summa
cum laude, in Mathematics and Economics from Wheaton College and an M.B.A. from
the Kellogg School of Management at Northwestern University. Mr. Goetz has been
managing the Fund since its inception in June 2021.
Allison
Fisch, Managing Principal, President, and Portfolio Manager
Ms. Fisch
joined the Adviser in 2001 and currently serves as President and as a Portfolio
Manager for the Adviser. Ms. Fisch has co-managed the International Value
strategy for the Adviser since 2016. Ms. Fisch holds a B.A., summa cum
laude, in Psychology and a minor in Drama from Dartmouth College. Ms. Fisch has
been managing the Fund since its inception in June 2021.
Rakesh
Bordia, Principal and Portfolio Manager
Mr.
Bordia joined the Adviser in 2007 and currently serves as a Portfolio Manager
for the Adviser. Mr. Bordia has co-managed the International Value strategy for
the Adviser since January 2023. Mr. Bordia has a Bachelor of Technology in
Computer Science and Engineering from the Indian Institute of Technology,
Kanpur, India and an M.B.A. from the Indian Institute of Management, Ahmedabad,
India. Mr. Bordia has been managing the Fund since January 2023.
The
SAI provides additional information about the portfolio managers for the Funds,
including information about their compensation, other accounts managed by them,
their ownership of securities in the Funds, and any conflicts of
interest.
Similarly
Managed Account Performance
The
Mid Cap Fund, Emerging Markets Fund, International Small Cap Fund and
International Value Fund are each managed in a manner that is substantially
similar to certain other accounts (each, a “Composite” and collectively referred
to herein as the “Composites”) managed by the Adviser. Each Composite has
investment objectives, policies, strategies and risks substantially similar to
those of the applicable Fund. The portfolio managers responsible for the
management of the Composites are the same portfolio managers who will be
responsible for the management of the respective Funds. You
should not consider the past performance of the Composites as indicative of the
future performance of the Funds.
The
following tables set forth performance data relating to the Composites which
represent the only accounts managed by the Adviser in a substantially similar
manner to the portfolios of the Funds. The data is provided to illustrate the
past performance of the Adviser and portfolio managers in managing substantially
similar accounts as measured against appropriate indices, and does not represent
the performance of the Funds. The Composites shown are not subject to the same
types of expenses to which the Funds are subject, the Composites are rebalanced
differently and less frequently than the Funds which will affect, among other
things, transactions costs and may affect the comparability of performance, nor
are the Composites subject to the diversification requirements, specific tax
restrictions and investment limitations imposed on the Funds by the Investment
Company Act of 1940, as amended (the “1940 Act”), or Subchapter M of the
Internal Revenue Code of 1986 (the “Code”). Consequently, the performance
results for each Composite expressed below could have been adversely affected if
it had been regulated as an investment company under the federal securities
laws.
The
Pzena Mid Cap Focused Value Composite
The
chart below shows the historical performance of the Pzena Mid Cap Focused Value
Composite of the Adviser (the “Mid Cap Composite”).
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| Annualized
Performance as of December 31, 2023 |
1
Year |
2
Years |
3
Years |
5
Years |
10
Years |
Since
Inception (9/1/1998) |
Mid
Cap Composite – Net |
21.45% |
6.85% |
14.53% |
15.54% |
9.40% |
11.38% |
Mid
Cap Composite – Gross |
22.65% |
7.92% |
15.67% |
16.69% |
10.49% |
12.49% |
Russell
Midcap®
Value Index |
12.71% |
-0.42% |
8.36% |
11.16% |
8.26% |
9.82% |
The
Mid Cap Composite includes the Mid Cap Fund, which represented $141.5 million
and 52.4% of the Composite as of December 31, 2023. The Mid Cap Composite
includes all accounts managed by the Adviser in a substantially similar manner
to the Mid Cap Fund. The standard management fee charged to
accounts
in the Mid Cap Composite ranges from 0.50% to 1.50% of managed assets. Net rates
of return are presented net of investment management fees and net of the
deduction of brokerage commissions and transaction costs. Gross rates of return
are presented gross of investment management fees and net of the deduction of
brokerage commissions and transaction costs. The fees of the Mid Cap Composite
differ from the fees of the Mid Cap Fund. The fees and expenses associated with
an investment in the Mid Cap Composite are lower than the fees and expenses
(after taking into account the Expense Cap) associated with an investment in the
Investor Class or Institutional Class shares of the Mid Cap Fund, so that if the
Mid Cap Composite’s expenses were adjusted for these Fund expenses, its
performance would have been lower.
The
Pzena Emerging Markets Focused Value Composite
The
chart below shows the historical performance of the Pzena Emerging Markets
Focused Value Composite of the Adviser (the “Emerging Markets
Composite”).
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| Annualized
Performance as of December 31, 2023 |
1
Year |
2
Years |
3
Years |
5
Years |
10
Years |
Since
Inception (1/1/2008) |
Emerging
Markets Composite – Net |
21.24% |
6.41% |
6.42% |
8.08% |
4.60% |
3.60% |
Emerging
Markets Composite – Gross |
22.44% |
7.47% |
7.48% |
9.16% |
5.65% |
4.71% |
MSCI
Emerging Markets Index (Net USD) |
9.83% |
-6.32% |
-5.08% |
3.68% |
2.66% |
1.20% |
MSCI
Emerging Markets Value Index |
14.21% |
-1.95% |
-0.01% |
3.37% |
1.94% |
0.90% |
The
Emerging Markets Composite includes the Emerging Markets Fund, which represented
$1,381.0 million and 36.5% of the Composite as of December 31, 2023. The
Emerging Markets Composite includes all accounts managed by the Adviser in a
substantially similar manner to the Emerging Markets Fund. The standard
management fee charged to accounts in the Emerging Markets Composite ranges from
0.70% to 1.00% of managed assets. Net rates of return are presented net of
investment management fees and net of the deduction of brokerage commissions and
transaction costs. Gross rates of return are presented gross of investment
management fees and net of the deduction of brokerage commissions and
transaction costs. The fees of the Emerging Markets Composite differ from the
fees of the Emerging Markets Fund. The fees and expenses associated with an
investment in the Emerging Markets Composite are lower than the fees and
expenses (after taking into account the Expense Cap) associated with an
investment in the Investor Class or Institutional Class shares of the Emerging
Markets Fund, so that if the Emerging Markets Composite’s expenses were adjusted
for these Fund expenses, its performance would have been lower.
The
Pzena International Small Cap Focused Value Composite
The
chart below shows the historical performance of the Pzena International Small
Cap Focused Value Composite (the “International Small Cap Composite”) of the
Adviser.
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| Annualized
Performance as of December 31, 2023 |
1
Year |
2
Years |
3
Years |
5
Years |
Since
Inception (10/1/2016) |
International
Small Cap Composite – Net |
22.77% |
10.08% |
12.28% |
9.35% |
7.50% |
International
Small Cap Composite – Gross |
23.98% |
11.17% |
13.39% |
10.44% |
8.57% |
MSCI
World Ex USA Small Cap Index |
12.62% |
-5.43% |
-0.20% |
7.05% |
5.44% |
MSCI
World Ex USA Small Cap Value Index |
14.70% |
-0.68% |
3.77% |
7.08% |
5.44% |
The
International Small Cap Composite includes the International Small Cap Fund,
which represented $26.3 million and 78.5% of the Composite as of December
31, 2023. The International Small Cap Composite includes all accounts managed by
the Adviser in a substantially similar manner to the International Small Cap
Fund. Currently, there are no fee-paying accounts in the International Small Cap
Composite. Net rates of return are presented net of investment management fees
and net of the deduction of brokerage commissions and transaction costs. Gross
rates of return are presented gross of investment management fees and net of the
deduction of brokerage commissions and transaction costs. The fees of the
International Small Cap Composite differ from the fees of the Fund. The fees and
expenses associated with an investment in the International Small Cap Composite
are lower than the fees and expenses (after taking into account the Expense Cap)
associated with an investment in the Investor Class or Institutional Class
shares of the Fund, so that if the International Composite’s expenses were
adjusted for these Fund expenses, its performance would have been
lower.
The
Pzena International Value Strategy Composite
The
chart below shows the historical performance of the Pzena International Value
Strategy Composite of the Adviser.
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| Annualized
Performance as of December 31, 2023 |
1
Year |
| 2
Years |
3
Years |
5
Years |
10
Years |
Since
Inception (11/1/2008) |
International
Value Composite – Net |
18.72% |
| 4.47% |
7.03% |
8.67% |
4.27% |
8.51% |
International
Value Composite – Gross |
19.36% |
| 5.04% |
7.61% |
9.27% |
4.84% |
9.10% |
MSCI
EAFE Index |
18.24% |
| 0.57% |
4.02% |
8.16% |
4.28% |
6.87% |
MSCI
EAFE Value Index |
18.95% |
| 5.98% |
7.59% |
7.08% |
3.16% |
6.02% |
The
International Value Strategy Composite includes the International Value Fund,
which represented $71.6 million and 1.6% of the Composite as of December 31,
2023. The International Value Strategy Composite includes all accounts managed
by the Adviser in a substantially similar manner to the Fund.
Net
rates of return are presented net of investment management fees, if any, and net
of all expenses, including the deduction of brokerage commissions and
transaction costs. Gross rates of return are presented gross of investment
management fees, if any, and net of all expenses, including the deduction of
brokerage commissions and transaction costs. The fees of the Composite differ
from the fees of the Fund. The fees and expenses associated with an investment
in the Composite are lower than the fees and expenses (after taking into account
the Expense Cap) associated with an investment in the Investor Class or
Institutional Class shares of the Fund, so that if the Composite's expenses were
adjusted for these Fund expenses, its performance would have been
lower.
The
methodology used to calculate the total return of the Composite is different
than the U.S. Securities and Exchange Commission’s prescribed methods for
calculating total return for mutual funds and may produce different
results.
Fund
Expenses
The
Funds are responsible for their own operating expenses. However, the Adviser has
contractually agreed to waive all or a portion of its management fees and pay
expenses of the Funds to ensure that the Funds’ aggregate annual operating
expenses (excluding AFFE, interest expense, taxes, dividends on securities sold
short, extraordinary expenses, Rule 12b-1 fees, shareholder servicing plan fees,
or any other class-specific expenses) do not exceed the following amounts as a
percentage of each Fund’s average daily net assets, through at least June 28,
2025:
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Fund |
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Mid
Cap Fund |
0.90% |
Small
Cap Fund |
1.00% |
Emerging
Markets Fund |
1.08% |
International
Small Cap Fund |
1.17% |
International
Value Fund |
0.74% |
The
term of the Funds’ operating expenses limitation agreement is indefinite, and it
can only be terminated by the Board. The Adviser may request recoupment of
previously waived fees and paid expenses in any subsequent month in the 36-month
period from the date of the management fee reduction and expense payment if the
aggregate amount actually paid by the Funds toward the operating expenses for
such fiscal year (taking into account the reimbursement) will not cause the
Funds to exceed the lesser of: (1) the expense limitation in place at the time
of the management fee reduction and expense payment; or (2) the expense
limitation in place at the time of the reimbursement. Any such recoupment is
contingent upon the subsequent review and approval of the recouped amounts by
the Board.
SHAREHOLDER
INFORMATION
Share
Price
Shares
of the Funds are sold at NAV per share, which is calculated for each Fund as of
the close of regular trading (generally, 4:00 p.m., Eastern Time) on each
day that the New York Stock Exchange (“NYSE”) is open for unrestricted business.
However, the Funds’ NAV may be calculated earlier if trading on the NYSE is
restricted or as permitted by the SEC. The NYSE is closed on weekends and most
national holidays. The NAV will not be calculated on days when the NYSE is
closed for trading.
Purchase
and redemption requests are priced at the next NAV per share calculated after
receipt of such requests. The NAV is the value of the Funds’ securities, cash
and other assets, minus all liabilities (assets – liabilities = NAV). NAV per
share is determined by dividing NAV by the number of shares outstanding (NAV/ #
of shares = NAV per share). The NAV takes into account the expenses and fees of
the Funds, including management, shareholder servicing and administration fees,
which are accrued daily.
In
calculating the NAV, portfolio securities are valued using current market values
or official closing prices, if available. Each security owned by the Funds that
is listed on a securities exchange is valued at its last sale price on that
exchange on the date as of which assets are valued. Where the security is listed
on more than one exchange, the Fund uses the price of the exchange that the
Funds generally consider to be the principal exchange on which the security is
traded.
When
market quotations are not readily available, a security or other asset is valued
at its fair value as determined under procedures adopted by the Adviser and
approved by the Board. These fair value procedures will also be used to price a
security when corporate events, events in the securities market and/or world
events cause the Adviser to believe that a security’s last sale price may not
reflect its actual market value. The intended effect of using fair value pricing
procedures is to ensure that the Funds are accurately priced.
When
fair value pricing is employed, the prices of securities used to calculate the
Funds’ NAVs may differ from quoted or published prices for the same securities.
Due to the subjective and variable nature of fair value pricing, it is possible
that the fair value determined for a particular security may be materially
different from the price of the security quoted or published by others or the
value when trading resumes or realized upon its sale. Therefore, if a
shareholder purchases or redeems shares in the Funds when they hold securities
priced at a fair value, this may have the unintended effect of increasing or
decreasing the number of shares received in a purchase or the value of the
proceeds received upon a redemption.
Trading
in Foreign Securities
In
the case of foreign securities, the occurrence of certain events after the close
of foreign markets, but prior to the time the Funds’ NAVs are calculated (such
as a significant surge or decline in the U.S. or other markets) often will
result in an adjustment to the trading prices of foreign securities when foreign
markets open on the following business day. If such events occur, the Funds will
value foreign securities at fair value, taking into account such events, in
calculating the NAVs. In such cases, use of fair valuation can reduce an
investor’s ability to seek to profit by estimating the Funds’ NAVs in advance of
the time the NAVs are calculated. The Adviser anticipates that the Funds’
portfolio holdings will be fair valued only if market quotations for those
holdings are considered unreliable.
Description
of Classes
The
Board has adopted a multiple class plan that allows the Funds to offer one or
more classes of shares of the Funds. The Funds offer two classes of shares –
Investor Class and Institutional Class. This Prospectus offers both the Investor
Class and Institutional Class. The different classes of shares represent
investments in the same portfolio of securities, but the classes are subject to
different expenses.
Investor
Class
shares are charged a 0.25% Rule 12b-1 distribution and service fee and a 0.10%
shareholder servicing plan fee. Investor Class shares do not have a front-end
sales charge or contingent deferred sales charge (“CDSC”).
Institutional
Class
shares do not have a Rule 12b-1 distribution or any other shareholder servicing
plan fees. Institutional Class shares do not have a front-end sales charge or
CDSC.
Buying
Fund Shares
To
purchase shares of a Fund, you must invest at least the minimum amount in the
Fund.
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Type
of Account |
To
Open Your Account |
To
Add to Your Account |
Investor
Class |
| |
Regular
Accounts |
$5,000 |
$100 |
Retirement
Accounts |
$1,000 |
$100 |
Institutional
Class |
$1,000,000 |
Any
Amount |
Shares
of the Funds may be purchased by check, wire, electronic funds transfer via the
Automated Clearing House (“ACH”) network or through approved financial
supermarkets, investment advisers and consultants, financial planners, brokers,
dealers and other investment professionals and their agents (“Brokers”)
authorized by the Funds to receive purchase orders. Each Fund’s minimum initial
investment (as well as subsequent additional investments) depends on the nature
of the account as shown in the table above.
Please
note the following:
•Institutional
Class shares are offered primarily to qualified registered investment advisors,
financial advisors and investors such as pension and profit sharing plans,
employee benefit trusts, endowments, foundations and corporations. Institutional
Class shares may be purchased through certain financial intermediaries and
mutual fund supermarkets that charge their customers transaction or other fees
with respect to their customers’ investments in the Funds and may also be
purchased directly through the Funds’ transfer agent, U.S. Bank Global Fund
Services (the “Transfer Agent”).
•Wrap
account programs established with broker-dealers or financial intermediaries may
purchase Institutional Class shares only if the program for which the shares are
being acquired will not require the Funds to pay any type of distribution or
administrative payment to any third-party.
•A
registered investment advisor may aggregate all client accounts investing in the
Funds to meet the Institutional Class shares investment minimum.
The
Funds’ minimum investment requirements may be waived from time to time by the
Adviser, and for the following types of shareholders:
•current
and retired employees, directors/trustees and officers of the Board, the Adviser
and its affiliates and certain family members of each of them (i.e.,
spouse, domestic partner, child, parent, sibling, grandchild and grandparent, in
each case including in-law, step and adoptive relationships);
•any
trust, pension, profit sharing or other benefit plan for current and retired
employees, directors/trustees and officers of the Adviser and its affiliates;
•current
employees of the Transfer Agent, broker-dealers who act as selling agents for
the Funds, intermediaries that have marketing agreements in place with the
Adviser and the immediate family members of any of them;
•registered
investment advisers who buy through a broker-dealer or service agent who has
entered into an agreement with the Funds’ distributor;
•qualified
broker-dealers who have entered into an agreement with the Funds’ distributor;
and
•existing
clients of the Adviser, their employees and immediate family members of such
employees.
All
checks must be in U.S. dollars drawn on a domestic financial institution. The
Funds will not accept payment in cash or money orders. To prevent check fraud,
the Funds will not accept third party checks, U.S. Treasury checks, credit card
checks, traveler’s checks or starter checks for the purchase of shares. The
Funds are unable to accept post-dated checks or any conditional order or
payment.
To
buy shares of the Funds, complete an account application and send it together
with your check for the amount you wish to invest in a Fund to the address
below. To make additional investments once you have opened your account, write
your account number on the check and send it together with the most recent
confirmation statement received from the Transfer Agent. If your payment is
returned for any reason, your purchase will be canceled and a $25 fee will be
assessed against your account by the Transfer Agent. You may also be responsible
for any loss sustained by the Funds.
In-Kind
Purchases
The
Funds reserve the right to accept payment for shares in the form of securities
that are permissible investments for the Funds. Such a transfer of securities
would be a taxable event for you. See the SAI for further information about the
terms of these purchases.
Additional
Investments
Additional
purchases of Investor Class shares in the Funds may be made for $100 or more for
regular accounts, $100 or more for retirement accounts and additional purchases
of Institutional Class shares may be made in any amount. Exceptions and waivers
of the additional purchase minimum may be made at the Adviser’s discretion. You
may purchase additional shares of the Funds by sending a check, with the stub
from your account statement, to the Funds at the addresses listed under “Methods
of Buying.” Please ensure that you include your account number on the check. If
you do not have the stub from your Fund account statement, include your name,
address and account number on a separate statement. You may also make additional
purchases by wire, by electronic funds transfer through the ACH network or
through a Broker. Please follow the procedures described in this
Prospectus.
Short-term
or excessive trading into and out of the Funds may harm performance by
disrupting management strategies and by increasing expenses. Accordingly, the
Funds may reject your purchase order if, in the Adviser’s opinion, you have a
pattern of short-term or excessive trading, your trading has been or may be
disruptive to a Fund, or rejection otherwise would be in a Fund’s best
interest.
In
compliance with the USA PATRIOT Act of 2001, please note that the Transfer Agent
will verify certain information on your new account application as part of the
Funds’ Anti-Money Laundering Program. As requested on the new account
application, you must provide your full name, date of birth,
social
security number and permanent street address. If you are opening the account in
the name of a legal entity (e.g.,
partnership, limited liability company, business trust, corporation, etc.), you
must also supply the identity of the beneficial owners. Mailing addresses
containing only a P.O. Box will not be accepted. Please contact the
Transfer Agent at 1-844-796-1996 (844-PZN-1996) if you need additional
assistance when completing your new account application.
If
the Transfer Agent does not have a reasonable belief of the identity of an
investor, the new account application will be rejected or the investor will not
be allowed to perform a transaction on the account until such information is
received. In the rare event that the Transfer Agent is unable to verify your
identity, the Fund reserves the right to redeem your account at the current
day’s net asset value.
Shares
of the Funds have not been registered for sale outside of the United States. The
Funds generally do not sell shares to investors residing outside of the United
States, even if they are United States citizens or lawful permanent residents,
except to investors with United States military APO or FPO
addresses.
Automatic
Investment Plan
Once
your account has been opened with the initial minimum investment, you may make
additional purchases at regular intervals through the Automatic Investment Plan
(“AIP”). If elected on your new account application, money can be automatically
transferred from your checking or savings account on a bi-weekly, monthly,
bi-monthly or quarterly basis. In order to participate in the AIP, each purchase
must be in the amount of $50 or more for Investor Class (no minimum amount for
Institutional Class), and your financial institution must be a member of the ACH
network. The first AIP purchase will take place no earlier than 7 business days
after the Transfer Agent has received your request. The Transfer Agent will
charge a $25 fee for any ACH payment that is rejected by your bank. You may
terminate your participation in the AIP by notifying the Transfer Agent at
1-844-796-1996 (844-PZN-1996), at least five calendar days prior to the date of
the next AIP transfer. The Funds may modify or terminate the AIP at any time
without notice.
Requests
Must be Received in Good Order
Your
share price will be the next NAV per share calculated after the Transfer Agent
or your Broker receives your request in good order. “Good order” means that your
purchase request includes: (1) the name of the Fund and share class,
(2) the dollar amount of shares to be purchased, (3) your new account
application or investment stub, and (4) a check payable to either the
“Pzena Mid Cap Value Fund,” “Pzena Small Cap Value Fund,” “Pzena Emerging
Markets Value Fund,” “Pzena International Value Fund,” or the “Pzena
International Small Cap Value Fund.” All requests received in good order before
4:00 p.m. (Eastern Time) will be processed on that same day. Requests
received after 4:00 p.m. (Eastern Time) will receive the next business
day’s NAV per share.
Methods
of Buying
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Through
a Broker |
The
Funds may be offered through Brokers (e.g.,
broker-dealer or other financial intermediary). The Funds may also be
offered directly through the distributor. An order placed with a Broker is
treated as if it was placed directly with the Funds, and will be executed
at the next share price calculated by the Funds after receipt by a Broker.
Your Broker will hold your shares in a pooled account in the Broker’s
name. The Funds may pay the Broker to maintain your individual ownership
information, for maintaining other required records, and for providing
other shareholder services. The Broker who offers shares may require
payment of fees from their individual clients. If you invest through a
Broker, the policies and fees may be different than those described in
this Prospectus. For example, the Broker may charge transaction fees or
set different minimum investments. The Broker is responsible for
processing your order correctly and promptly, keeping you advised of the
status of your account, confirming your transactions and ensuring that you
receive copies of the Prospectus.
Please
contact your Broker to see if they are an approved Broker of the Funds and
for additional information. |
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By
mail |
All
purchases by check must be in U.S. dollars drawn on a domestic financial
institution. The Funds will not accept payment in cash or money orders. To
prevent check fraud, the Funds will not accept third party checks,
Treasury checks, credit card checks, traveler’s checks or starter checks
for the purchase of shares. The Funds are unable to accept post-dated
checks or any conditional order or payment.
To
buy shares of a Fund, complete a new account application and send it
together with your check for the amount you wish to invest in a Fund to
the address below. Checks should be made payable to the specific Pzena
Fund in which you are investing. To make additional investments once you
have opened your account, write your account number on the check and send
it together with the remittance form from your most recent confirmation
statement received from the Transfer Agent. If your check is returned for
any reason, your purchase will be canceled and a $25 fee will be assessed
against your account by the Transfer Agent. You may also be responsible
for any loss sustained by the Funds for any payment that is
returned.
Regular
Mail
Pzena
Funds
[Name
of Pzena Fund]
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
Wisconsin 53201-0701
Overnight
Delivery
Pzena
Funds
[Name
of Pzena Fund]
c/o
U.S. Bank Global Fund Services
615
E. Michigan Street, Third Floor
Milwaukee,
Wisconsin 53202
NOTE:
The Funds do not consider the U.S. Postal Service or other independent
delivery services to be their agents. Therefore, deposit in the mail or
with such services, or receipt at the Transfer Agent’s post office box, of
purchase orders or redemption requests does not constitute receipt by the
Transfer Agent. Receipt of purchase orders or redemption requests is based
on when the order is received at the Transfer Agent’s
office. |
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By
telephone |
If
you accepted telephone options on your account application, you may make
additional investments by telephone. If you have given authorization for
telephone transactions and your account has been open for at least seven
business days, call the Transfer Agent toll-free at 1-844-796-1996
(844-PZN-1996), and you will be allowed to move money in amounts of $100
or more for regular accounts and $100 or more for retirement accounts for
the Investor Class and no minimum amount for Institutional Class, from
your bank account to your Fund account upon request. Only bank accounts
held at U.S. institutions that are ACH members may be used for telephone
transactions. If your order is placed before 4:00 p.m., Eastern Time,
shares will be purchased in your account at the NAV determined on that
day. For security reasons, requests by telephone will be
recorded. |
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By
wire |
To
open an account by wire, a completed new account application is required
before your wire can be accepted. You may mail or overnight deliver your
new account application to the Transfer Agent. Upon receipt of your
completed new account application, an account will be established for you.
The account number assigned will be required as part of the instruction
that should be provided to your bank to send the wire payment. Your bank
must include the name of the Fund you are purchasing, the account number,
and your name so that monies can be correctly applied. Your bank should
transmit funds by wire to:
U.S.
Bank National Association
777
East Wisconsin Avenue
Milwaukee,
Wisconsin 53202
ABA
#: 075000022
Credit:
U.S. Bancorp Fund Services, LLC
Account
#: 112-952-137
Further
Credit: (name of the Pzena Fund)
(your
name or the title on the account)
(your
account #)
Before
sending your wire, please contact the Transfer Agent at 1-844-796-1996
(844-PZN-1996) to advise them of your intent to wire funds. This will
ensure prompt and accurate credit upon receipt of your wire.
Wired
funds must be received prior to 4:00 p.m., Eastern Time to be eligible for
same day pricing. The
Funds and U.S. Bank N.A. are not responsible for the consequences of
delays resulting from the banking or Federal Reserve wire system, or from
incomplete wiring instructions. |
Selling
(Redeeming) Fund Shares
You
may redeem the Funds’ shares at a price equal to the NAV per share next
determined after the Transfer Agent receives your redemption request in good
order. Your redemption request cannot be processed on days the NYSE is closed.
As
further described below, the Funds typically expect to meet redemption requests
by paying out proceeds from cash or cash equivalent portfolio holdings, or by
selling portfolio holdings. The Funds typically expect that it will take one to
three days following the receipt of your redemption request in good order, to
pay out redemption proceeds. However, while not expected, payment of redemption
proceeds may take up to seven days if sending proceeds earlier could adversely
affect the Funds. If you did not purchase your shares with a wire payment, the
Funds may delay payment of your redemption proceeds for up to 12 calendar days
from purchase or until your payment has cleared, whichever occurs first.
The
Funds typically expect to fulfill redemption requests in cash. The Funds may
also use the proceeds from the sale of portfolio securities to meet redemption
requests if consistent with the management of the Funds. These redemption
methods will be used regularly and may also be used in unusual market
conditions.
The
Funds reserve the right to redeem in-kind as described under “Redemptions
‘In-Kind” below. Redemptions in-kind are typically used to meet redemption
requests that represent a large percentage of a Fund’s net assets in order to
minimize the effect of large redemptions on the Funds and its remaining
shareholders. Redemptions in-kind are typically only used in unusual market
conditions.
If
you wish to redeem by mail, your proceeds will be delivered by the method you
choose. If you choose to have your proceeds delivered by mail, payment will
generally be mailed to you within one to two business days after the request is
received. You may also choose to redeem by wire or via the ACH system to your
bank (see below). If you choose to redeem by wire, proceeds will generally be
wired on the next business day. If you choose to redeem via ACH, credit may not
be available in your bank account for two to three days.
If
you purchase shares using a check or the ACH network and soon after request a
redemption, the Funds will honor the redemption request, but will not mail the
proceeds until your purchase payment has cleared (usually within
12 calendar days). There are certain times when you may be unable to sell
Fund shares or receive proceeds.
Specifically,
the Funds may suspend the right to redeem shares or postpone the date of payment
upon redemption for more than three business days (1) for any period during
which the NYSE is closed (other than customary weekend or holiday closings) or
trading on the NYSE is restricted; (2) for any period during which an emergency
exists as a result of which disposal by a Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund fairly
to determine the value of its net assets; or (3) for such other periods as the
U.S. Securities and Exchange Commission (“SEC”) may permit for the protection of
a Fund’s shareholders.
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Through
a Broker |
If
you purchased your shares through a Broker, your redemption order must be
placed through the same Broker. The Broker must receive and transmit your
redemption order to the Transfer Agent prior to 4:00 p.m. (Eastern
Time) for the redemption to be processed at the current day’s NAV per
share. Orders received after 4:00 p.m. (Eastern Time) will receive the
next business day’s NAV per share. Please keep in mind that your Broker
may charge additional fees for its services. |
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By
mail |
You
may redeem shares directly from a Fund by mail. Send your written
redemption request to the Transfer Agent at the address below. Your
request should be in good order and contain the Fund’s name, the name(s)
on the account, your account number and the dollar amount or the number of
shares to be redeemed. Be sure to have all shareholders sign the letter.
Additional documents are required for certain types of shareholders, such
as corporations, partnerships, executors, trustees, administrators, or
guardians (i.e.,
corporate resolutions, or trust documents indicating proper
authorization).
Regular
Mail
Pzena
Funds
[Name
of Pzena Fund]
c/o
U.S. Bank Global Fund Services
P.O.
Box 701
Milwaukee,
Wisconsin 53201-0701
Overnight
Delivery
Pzena
Funds
[Name
of Pzena Fund]
c/o
U.S. Bank Global Fund Services
615
E. Michigan Street, Third Floor
Milwaukee,
Wisconsin 53202
NOTE:
The Funds do not consider the U.S. Postal Service or other independent
delivery services to be their agents. Therefore, deposit in the mail or
with such services, or receipt at the Transfer Agent’s post office box, of
purchase orders or redemption requests does not constitute receipt by the
Transfer Agent. Receipt of purchase orders or redemption requests is based
on when the order is received at the Transfer Agent’s office.
A
signature guarantee, from either a Medallion program member or a
non-Medallion program member, must be included if any of the following
situations apply:
•You
wish to redeem more than $50,000 worth of shares;
•When
redemption proceeds are payable or sent to any person, address or bank
account not on record;
•When
a redemption is received by the Transfer Agent and the account address has
changed within the last 15 calendar days;
•When
ownership is being changed on your account.
Non-financial
transactions, including establishing or modifying certain services on an
account, may require a signature guarantee, signature verification from a
Signature Validation Program member, or other acceptable form of
authentication from a financial institution source.
The
Funds and/or the Transfer Agent may require a signature guarantee or other
acceptable signature authentication in other instances based on the
circumstances relative to the particular situation.
If
applicable, shareholders redeeming their shares by mail should submit
written instructions with a guarantee of their signature(s) by an eligible
institution acceptable to the Transfer Agent, such as a domestic bank or
trust company, broker, dealer, clearing agency or savings association, as
well as from participants in a medallion program recognized by the
Securities Transfer Association. The three recognized medallion programs
are Securities Transfer Agents Medallion Program, Stock Exchanges
Medallion Program and New York Stock Exchange, Inc. Medallion Signature
Program. A
notary public cannot provide a signature
guarantee. |
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By
telephone |
To
redeem shares by telephone, call the Funds at 1-844-796-1996
(844-PZN-1996) and specify the amount of money you wish to redeem up to
$50,000. You may have a check sent to the address of record, or, if
previously established on your account, you may have proceeds sent by wire
or electronic funds transfer through the ACH network directly to your bank
account. Wires are subject to a $15 fee paid by the investor and your bank
may charge a fee to receive wired funds. You do not incur any charge when
proceeds are sent via the ACH network; however, credit may not be
available in your bank account for two to three days.
If
you are authorized to perform telephone transactions (either through your
new account application or by subsequent arrangement in writing with the
Funds) you may redeem shares in the amount of $50,000 or less, by
instructing the Funds by phone at 1-844-796-1996 (844-PZN-1996). A
signature guarantee or acceptable signature verification may be required
of all shareholders in order to qualify for or to change telephone
redemption privileges.
You
may encounter higher than usual call wait times during periods of high
market activity. Please allow sufficient time to ensure that you will be
able to complete your telephone transaction prior to market close. If you
are unable to contact the Funds by telephone, you may mail your redemption
request in writing to the address noted above.
Note:
Neither the Funds nor their service providers will be liable for any loss
or expense in acting upon instructions that are reasonably believed to be
genuine. To confirm that all telephone instructions are genuine, the Funds
will use reasonable procedures, such as requesting:
•That
you correctly state the Fund account number;
•The
name in which your account is registered;
•The
social security or tax identification number under which the account is
registered; and
•The
address of the account holder, as stated in the account
application. |
Exchange
Privilege
As
a shareholder, you have the privilege of exchanging shares of one Fund for
shares of another Fund in the Trust, including those Funds offered in separate
prospectuses, without incurring any additional sales charges. However, you
should note the following:
•Exchanges
may only be made between like shares classes;
•You
may only exchange between accounts that are registered in the same name,
address, and taxpayer identification number;
•Before
exchanging into another Fund, read a description of the fund in its separate
prospectus or in this Prospectus. A copy of the prospectus for each Fund may be
obtained by calling 1-844-796-1996 (844-PZN-1996);
•Exchanges
are considered a sale and purchase of Fund shares for tax purposes and may be
taxed as short-term or long-term capital gain or loss depending on the length of
time shares are held, subject to certain limitations on the deductibility of
losses;
•Each
Fund reserves the right to refuse exchange purchases by any person or group if,
in the Adviser’s judgment, the Fund would be unable to invest the money
effectively in accordance with its investment objective and policies, or would
otherwise potentially be adversely affected;
•If
you have established telephone exchange privileges on your account, you can make
a telephone request to exchange your shares for an additional $5 fee;
and
•The
minimum exchange amount between existing accounts invested in the Funds is the
minimum subsequent investment amount for your share class and your type of
account.
You
may make exchanges of your shares between the Funds by telephone, in writing or
through your broker or other financial intermediary.
Systematic
Withdrawal Plan
You
may request that a predetermined dollar amount be sent to you each month or
quarter. Your account must have a value of at least $25,000 for Investor Class
and $500,000 for Institutional Class for you to be eligible to participate in
the Systematic Withdrawal Plan (the “SWP”). The minimum withdrawal amount for
the Investor Class is $250 and the minimum withdrawal amount for the
Institutional Class is $1,000. If you elect this method of redemption, the Funds
will send a check to your address of record, or will send the payment via
electronic funds transfer through the ACH network, directly to your bank
account. You may request an application for the SWP by calling the Transfer
Agent toll-free at 1-844-796-1996 (844-PZN-1996). The Funds may modify or
terminate the SWP at any time. You may terminate your participation in the SWP
by writing or calling the Transfer Agent five calendar days prior to the
effective date of the next withdrawal.
Redemptions
In-Kind
The
Fund generally pays redemption proceeds in cash. However, under unusual
conditions that make the payment of cash unwise (and for the protection of the
Fund’s remaining shareholders) the Fund might pay all or part of a shareholder’s
redemption proceeds in liquid securities with a market value equal to the
redemption price (redemption-in-kind).
Specifically,
if the amount you are redeeming is in excess of the lesser of $250,000 or 1% of
the Fund’s net assets, the Fund has the right to redeem your shares by giving
you the amount that exceeds $250,000 or 1% of the Fund’s net assets in
securities instead of cash. If the Fund pays your redemption proceeds by a
distribution of securities, you could incur brokerage or other charges in
converting the securities to cash, and will bear any market risks associated
with such securities until they are converted into cash. A redemption, whether
in cash or in-kind, is a taxable event to you. See the SAI for further
information about the terms of these redemptions.
Other
Redemption Information
Shareholders
who have an IRA or other retirement plan must indicate on their written
redemption request whether or not to withhold federal income tax. Redemption
requests failing to indicate an election not to have tax withheld will generally
be subject to a 10% withholding tax.
Shares
held in IRA and other retirement plan accounts may be redeemed by telephone at
1-844-796-1996 (844-PZN-1996). Investors will be asked whether or not to
withhold taxes from any distribution.
TOOLS
TO COMBAT FREQUENT TRANSACTIONS
The
Board has adopted policies and procedures with respect to frequent purchases and
redemptions of Fund shares by Fund shareholders. The Funds discourage excessive,
short-term trading and other abusive trading practices that may disrupt
portfolio management strategies and harm the Funds’ performances. The Funds take
steps to reduce the frequency and effect of these activities in the Funds. These
steps include monitoring trading practices, rejecting exchanges between the
Funds that seem to be excessive and using fair value pricing. A Fund may decide
to restrict purchase and sale activity in its shares based on various factors,
including whether frequent purchase and sale activity will disrupt portfolio
management strategies and adversely affect the Fund’s performance or whether the
shareholder has conducted four round trip transactions within a 12-month period.
Although these efforts (which are described in more detail below) are designed
to discourage abusive trading practices, these tools cannot eliminate the
possibility that such activity may occur. Further, while the Funds make efforts
to identify and restrict frequent trading, the Funds receive purchase and sale
orders through financial intermediaries and cannot always know or detect
frequent trading that may be facilitated by the use of intermediaries or the use
of group or omnibus accounts by those intermediaries. The Funds seek to exercise
their judgment in implementing these tools to the best of their abilities in a
manner that the Funds believe is consistent with shareholder
interests.
Monitoring
Trading Practices
The
Funds monitor selected trades in an effort to detect excessive short-term
trading activities. If, as a result of this monitoring, a Fund believes that a
shareholder has engaged in excessive short-term trading, it may, in its
discretion, ask the shareholder to stop such activities or refuse to process
purchases in the shareholder’s accounts. In making such judgments, the Funds
seek to act in a manner that they believe is consistent with the best interests
of shareholders. Due to the complexity and subjectivity involved in identifying
abusive trading activity and the volume of shareholder transactions the Funds
handle, there can be no assurance that the Funds’ efforts will identify all
trades or trading practices that may be considered abusive. In addition, the
Funds’ ability to monitor trades that are placed by individual shareholders
within group or omnibus accounts maintained by financial intermediaries is
severely limited because the Funds do not have simultaneous access to the
underlying shareholder account information.
In
compliance with Rule 22c-2 of the 1940 Act, Quasar Distributors, LLC, the Funds’
distributor, on behalf of the Funds, has entered into written agreements with
each of the Funds’ financial intermediaries, under which the intermediary must,
upon request, provide the Funds with certain shareholder and identity trading
information so that the Funds can enforce their short-term trading policies.
Information received from financial intermediaries on omnibus accounts will not
be used for any other purpose except for compliance with SEC rules.
Fair
Value Pricing
Each
Fund employs fair value pricing selectively to ensure greater accuracy in its
daily NAV and to prevent dilution by frequent traders or market timers who seek
to take advantage of temporary market anomalies. The Adviser has developed
procedures which utilize fair value pricing when reliable market quotations are
not readily available or the Funds’ pricing service does not provide a valuation
(or provides a valuation that in the judgment of the Adviser does not represent
the security’s fair value), or when, in the judgment of the Adviser, events have
rendered the market value unreliable. Valuing securities at fair value involves
reliance on judgment. Fair value determinations are made in good faith in
accordance with procedures adopted by the Adviser. There can be no assurance
that a Fund will obtain the fair value assigned to a security if it were to sell
the security at approximately the time at which the Fund determines its NAV per
share.
More
detailed information regarding fair value pricing can be found under the heading
titled, “Shareholder Information – Share Price.”
General
Policies
Some
of the following policies are mentioned above. In general, the Funds reserve the
right to:
•Refuse,
change, discontinue, or temporarily suspend account services, including
purchase, or telephone redemption privileges, for any reason;
• Reject
any purchase request for any reason. Generally, the Funds do this if the
purchase is disruptive to the efficient management of the Funds (due to the
timing of the investment or an investor’s history of excessive
trading);
• Redeem
all shares in your account if your balance falls below a Fund’s minimum initial
investment requirement due to redemption activity. If, within 30 days of
the Fund’s written request, you have not increased your account balance, you may
be required to redeem your shares. The Funds will not require you to redeem
shares if the value of your account drops below the investment minimum due to
fluctuations of NAV; and
• Reject
any purchase or redemption request that does not contain all required
documentation.
If
you accept telephone options on the new account application or in a letter to
the Funds, you may be responsible for any fraudulent telephone orders as long as
the Funds have taken reasonable precautions to verify your identity. If an
account has more than one owner or authorized person, the Funds will accept
telephone instructions from any one owner or authorized person. In addition,
once you place a telephone transaction request, it cannot be canceled or
modified after the close of regular trading on the NYSE (generally, 4:00 p.m.,
Eastern Time).
Telephone
trades must be received by or prior to market close. During periods of high
market activity, shareholders may encounter higher than usual call wait times.
Please allow sufficient time to ensure that you will be able to complete your
telephone transaction prior to market close. If you are unable to contact the
Funds by telephone, you may also mail your request to the Funds at the address
listed under “Methods of Buying.”
Your
broker or other financial intermediary may establish policies that differ from
those of the Funds. For example, the organization may charge transaction fees,
set higher minimum investments, or impose certain limitations on buying or
selling shares in addition to those identified in this Prospectus. Contact your
Broker or other financial intermediary for details.
Lost
Shareholders, Inactive Accounts and Unclaimed Property.
It is important that the Funds maintain a correct address for each
shareholder. An incorrect address may cause a shareholder’s account
statements and other mailings to be returned to the Funds. Based upon
statutory requirements for returned mail, the Funds will attempt to locate the
shareholder or rightful owner of the account. If the Fund is unable to
locate the shareholder, then it will determine whether the shareholder’s account
can legally be considered abandoned. Your mutual fund account may be
transferred to the state government of your state of residence if no activity
occurs within your account during the “inactivity period” specified in your
state’s abandoned property laws. The Funds are legally obligated to
escheat (or transfer) abandoned property to the appropriate state’s unclaimed
property administrator in accordance with statutory requirements. The
shareholder’s last known address of record determines which state has
jurisdiction.
Please proactively contact the Transfer Agent toll-free at 1-844-796-1996
(844-PZN-1996) at least annually to ensure your account remains in active
status.
If
you are a resident of the state of Texas, you may designate a representative to
receive notifications that, due to inactivity, your mutual fund account assets
may be delivered to the Texas Comptroller. Please contact the Transfer
Agent if you wish to complete a Texas Designation of Representative
form.
Householding
In
an effort to decrease costs, the Fund intends to reduce the number of duplicate
prospectuses, supplements, and certain other shareholder documents, you receive
by sending only one copy of each to those addresses shared by two or more
accounts and to shareholders the Transfer Agent reasonably believes are from the
same family or household. Once implemented, if you would like to discontinue
householding for your accounts, please call toll-free at 1-844-796-1996
(844-PZN-1996) to request individual copies of these documents. Once the
Transfer Agent receives notice to stop householding, the Transfer Agent will
begin sending individual copies thirty days after receiving your request. This
policy does not apply to account statements.
Service
Fees – Other Payments to Third Parties
The
Funds may pay service fees to intermediaries such as banks, broker-dealers,
financial advisers or other financial institutions, including affiliates of the
Adviser, for sub-administration, sub-transfer agency and other shareholder
services associated with shareholders whose shares are held of record in
omnibus, other group accounts or accounts traded through registered securities
clearing agents.
The
Adviser, out of its own resources, and without additional cost to the Funds or
their shareholders, may provide additional cash payments or non-cash
compensation to intermediaries who sell shares of the Funds. Such payments and
compensation are in addition to Rule 12b-1 and shareholder servicing plan fees
paid by each Fund. These additional cash payments are generally made to
intermediaries that provide shareholder servicing, marketing support and/or
access to sales meetings, sales representatives and management representatives
of the intermediary. Cash compensation may also be paid to intermediaries for
inclusion of the Funds on a sales list, including a preferred or select sales
list, in other sales programs or as an expense reimbursement in cases where the
intermediary provides shareholder services to the Funds’ shareholders. The
Adviser may also pay cash compensation in the form of finder’s fees that vary
depending on the Funds and the dollar amount of the shares sold.
DISTRIBUTION
OF FUND SHARES
Distribution
and Service (Rule 12b-1) Plan
The
Funds have adopted a plan pursuant to Rule 12b-1 that allows each Fund’s
Investor Class shares to pay distribution and service fees for the sale,
distribution and servicing of its shares. The plan provides for the payment of a
distribution and service fee at the annual rate of up to 0.25% of average daily
net assets of each Fund’s Investor Class shares. Because these fees are paid out
of each Fund’s assets, over time these fees will increase the cost of your
investment and may cost you more than paying other types of sales
charges.
Shareholder
Servicing Plan
The
Funds have a shareholder servicing plan with respect to the Investor Class of
each Fund. The Funds pay the Adviser, who in turn may pay authorized agents, up
to 0.10% of the average daily net assets of the Investor Class of each Fund
attributable to their shareholders. The authorized agents may provide a variety
of services, such as: (1) aggregating and processing purchase and
redemption requests and transmitting such orders to the Transfer Agent;
(2) providing shareholders with a service that invests the assets of their
accounts in shares pursuant to specific or pre-authorized instructions;
(3) processing dividend and distribution payments from the Funds on behalf
of shareholders; (4) providing information periodically to shareholders
showing their positions; (5) arranging for bank wires; (6) responding
to shareholder inquiries concerning their investment; (7) providing
sub-accounting with respect to shares beneficially owned by shareholders or the
information necessary for sub-accounting; (8) if required by law,
forwarding shareholder communications (such as proxies, shareholder reports,
annual and semi-annual financial statements and dividend, distribution and tax
notices); and (9) providing similar services as may reasonably be
requested.
While
this plan is in effect, the Adviser reports in writing at least quarterly to the
Funds’ Board, and the Board reviews the amounts expended under the plan and the
purposes for which such expenditures were made.
The
Funds have policies and procedures in place for the monitoring of payments to
broker-dealers and other financial intermediaries for distribution-related
activities and the following non-distribution activities: sub-transfer agent,
administrative, and other shareholder services.
DISTRIBUTIONS
AND TAXES
Dividends
and Distributions
The
Funds make distributions of dividends and capital gains, if any, at least
annually, typically in December. A Fund may make an additional payment of
dividends or distributions if it deems it desirable at any other time during the
year.
All
distributions will be reinvested in Fund shares unless you choose one of the
following options: (1) receive dividends in cash, while reinvesting capital
gain distributions in additional Fund shares; (2) receive capital gain
distributions in cash while reinvesting dividends in additional Fund shares; or
(3) receive all distributions in cash.
Dividends
will be taxable whether received in cash or in additional shares. If you wish to
change your distribution option, write or call the Transfer Agent at
1-844-796-1996 (844-PZN-1996) in advance of the payment date of the
distribution. Dividends and distributions will be taxable whether paid in cash
or reinvested in additional shares.
If
an investor elects to receive distributions in cash and the U.S. Postal Service
cannot deliver your check, or if a check remains uncashed for six months, the
Funds reserve the right to reinvest the distribution check in the shareholder’s
account at the Fund’s then current NAV per share and to reinvest all subsequent
distributions.
Tax
Matters
Each
Fund has elected and intends to continue to qualify to be taxed as a regulated
investment company under Subchapter M of the Code. As regulated investment
companies, the Funds generally will not be subject to federal income tax if each
distributes its taxable income as required by the tax law and satisfies certain
other requirements that are described in the SAI. There is no assurance that the
distributions of the Funds will be sufficient to eliminate all taxes in every
year.
The
Funds make distributions of dividends and capital gains. Dividends are taxable
to shareholders as ordinary income (or in some cases as qualified dividend
income) or capital gain. Fund distributions of short-term capital gains are
taxable as ordinary income. Fund distributions of long-term capital gains are
taxable as long-term capital gains. The rate an individual shareholder pays on
capital gain distributions will depend on how long the Fund held the securities
that generated the gains, not on how long the individual has owned the Fund
shares. Generally none or only a small portion of the dividends paid to you as a
result of the Funds’ investment in real estate investment trusts is anticipated
to be qualified dividend income eligible for taxation by individuals at
long-term capital gain tax rates. Although distributions generally are taxable
when received, certain distributions declared in October, November, or December
to shareholders of record on a specified date in such a month but paid in
January are taxable as if received the prior December. Dividends and net capital
gains are subject to a 3.8% Medicare tax for shareholders in the higher tax
brackets.
You
will be taxed on distributions from the Funds regardless of whether you receive
your dividends and capital gain distributions in cash or if they are reinvested
in additional Fund shares. Both cash and reinvested distributions will be taxed
in the same manner. Shareholders should be aware that the Funds may make taxable
distributions of income and capital gains even when share values have declined.
If
you redeem your Fund shares, part of your redemption proceeds may represent your
allocable share of the distributions made by the Fund relating to that tax year
of the redemption. You will be informed annually of the amount and nature of the
Fund’s distributions. Sale or exchange of your Fund shares is generally a
taxable event for you. An exchange of shares between the Funds by you is treated
as a taxable sale. Depending on the purchase price and the sale price of the
shares you sell or exchange, you may have a gain or loss on the transaction. You
are responsible for any tax liabilities generated by your transaction. The Code
limits the deductibility of capital losses in certain circumstances.
For
taxable years beginning after 2017 and before 2025, non-corporate taxpayers
generally may deduct 20% of “qualified business income” derived either directly
or through partnerships or S corporations. For this purpose, “qualified business
income” generally includes ordinary real estate investment trust (“REIT”)
dividends and income derived from master limited partnership (“MLP”)
investments. Non-corporate shareholders can claim the qualified business income
deduction with respect to REIT dividends received by a Fund if the Fund meets
certain holding period and reporting requirements. There is currently no
mechanism for the Funds, to the extent that the Funds invest in REITs or MLPs,
to pass through to non-corporate shareholders the character of ordinary REIT
dividends or income derived from MLP investments so as to allow such
shareholders to claim this deduction. It is uncertain whether future legislation
or other guidance will enable the Funds to pass through to non-corporate
shareholders the ability to claim this deduction.
By
law, the Funds must withhold as backup withholding at a rate under section 3406
of the Code of your taxable distributions and redemption proceeds if you do not
provide your correct Social Security or taxpayer identification number and
certify that you are not subject to backup withholding, or if the
Internal
Revenue Service (“IRS”) instructs the Funds to do so. Backup withholding is not
an additional tax and amounts withheld may be credited if proper documentation
is provided to the IRS.
Additional
information concerning the taxation of the Funds and their shareholders is
contained in the SAI. Tax consequences are not the primary consideration of the
Funds in making investment decisions. You should consult your own tax adviser
concerning federal, state and local taxation of distributions from a
Fund.
INDEX
DESCRIPTIONS
Investors
cannot invest directly in an index, although they may invest in the underlying
securities.
The
MSCI
EAFE Index is
an equity index which captures large and mid cap representation across 21
Developed Markets countries* around the world, excluding the United States and
Canada. With 844 constituents, the index covers approximately 85% of the free
float-adjusted market capitalization in each country.
The
MSCI
EAFE Value Index
captures large and mid cap securities exhibiting overall value style
characteristics across Developed Markets countries* around the world, excluding
the United States and Canada. The value investment style characteristics for
index construction are defined using three variables: book value to price,
12-month forward earnings to price and dividend yield.
The
MSCI
Emerging Markets Index
is a free float-adjusted market capitalization index that is designed to measure
equity market performance of emerging markets, and provides equity returns
including dividends net of withholding tax rates as calculated by
MSCI.
The
MSCI
Emerging Markets Value Index
is based on a traditional market cap weighted parent index, the MSCI Emerging
Markets Index. The value investment style characteristics for index construction
are defined using three variables: book value to price, 12-month forward
earnings to price and dividend yield.
The
MSCI
World ex USA Small Cap Index is
an unmanaged index considered representative of small-cap stocks of global
developed markets, excluding those of the United States. It captures small cap
representation across 22 of 23 Developed Markets (DM) countries* (excluding the
United States). With 2,542 constituents, the index covers approximately 14% of
the free float-adjusted market capitalization in each country. *DM countries in
this index include: Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New
Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the
U.K.
The
MSCI
World Ex USA Small Cap Value Index
is based on a traditional market cap weighted parent index, the MSCI World
ex-USA Small Cap Index. The value investment style characteristics for index
construction are defined using three variables: book value to price, 12-month
forward earnings to price and dividend yield.
The
Russell
Midcap®
Value Index
is a market capitalization weighted index representing the smallest 800
companies in the Russell 1000®
Index.
The
Russell
2000®
Value Index
is an unmanaged index that measures the performance of those Russell
2000®
companies with lower price-to-book ratios and lower forecasted growth rates. The
index is reconstituted annually so that stocks that have outgrown the index can
be removed and new entries can be added.
FINANCIAL
HIGHLIGHTS
The
financial highlights tables below are intended to help you understand the
financial performance of each Fund’s shares for the fiscal periods shown.
Certain information reflects financial results for a single share of the Fund.
The total returns in the table represent the rate that an investor would have
earned on an investment in a Fund assuming reinvestment of all dividends and
distributions. The Funds’ information has been audited by Tait, Weller &
Baker LLP, whose report, along with each Fund’s financial statements, are
included in the Funds’ annual
report
dated
February 29, 2024, which is available free of charge upon request.
Pzena
Mid Cap Value Fund – Investor Class
|
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For
a share outstanding throughout each year |
Year
Ended February 29, |
| Year
Ended February 28, |
| Year
Ended February 28, |
| Year
Ended February 28, |
| Year
Ended February 29, |
|
|
| |
| 2024 |
| 2023 |
| 2022 |
| 2021 |
| 2020 |
|
|
| |
PER
SHARE DATA: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, beginning of year |
$ |
14.28 |
|
| $ |
16.12 |
|
| $ |
15.05 |
|
| $ |
10.86 |
|
| $ |
11.59 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Income
from investment operations: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
investment income(1) |
0.15 |
|
| 0.17 |
|
| 0.12 |
|
|
0.16 |
|
|
0.12 |
|
|
|
| |
Net
realized and unrealized gain/(loss) on investments |
1.40 |
|
| (0.01) |
|
| 2.44 |
|
| 4.32 |
|
| (0.74) |
|
|
|
| |
Total
from investment operations |
1.55 |
|
| 0.16 |
|
| 2.56 |
|
| 4.48 |
|
| (0.62) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Less
distributions: |
|
|
|
|
|
|
|
|
|
|
|
| |
Dividends
from net investment income |
(0.15) |
|
| (0.15) |
|
| (0.24) |
|
| (0.05) |
|
| (0.06) |
|
|
|
| |
Dividends
from net realized gain on investments |
(1.12) |
|
| (1.85) |
|
| (1.25) |
|
| (0.24) |
|
| (0.05) |
|
|
|
| |
Total
distributions |
(1.27) |
|
| (2.00) |
|
| (1.49) |
|
| (0.29) |
|
| (0.11) |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Redemption
fees retained |
— |
|
| — |
|
| — |
|
| — |
|
| 0.00 |
|
(1)(2) |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Net
asset value, end of year |
$ |
14.56 |
|
| $ |
14.28 |
|
| $ |
16.12 |
|
| $ |
15.05 |
|
| $ |
10.86 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
TOTAL
RETURN |
10.95 |
% |
| 1.96 |
% |
| 17.52 |
% |
| 41.53 |
% |
| -5.49 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
|
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|
| |
SUPPLEMENTAL
DATA AND RATIOS: |
|
|
|
|
|
|
|
|
|
|
|
| |
Net
assets, end of year (thousands) |
$ |
7,645 |
|
| $ |
6,667 |
|
| $ |
11,934 |
|
| $ |
8,972 |
|
| $ |
3,387 |
|
|
|
| |
Ratio
of expenses to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
| |
Before
fee waivers |
1.33 |
% |
| 1.32 |
% |
| 1.31 |
% |
| 1.40 |
% |
| 1.56 |
% |
|
|
| |
After
fee waivers |
1.24 |
% |
| 1.24 |
% |
| 1.24 |
% |
| 1.24 |
% |
| 1.23 |
% |
|
|
| |
Ratio
of net investment income to average net assets: |
|
|
|
|
|
|
|
|
|
|
|
| |
Before
fee waivers |
1.03 |
% |
| 1.07 |
% |
| 0.63 |
% |
| 1.33 |
% |
| 0.69 |
% |
|
|
| |
After
fee waivers |
1.12 |
% |
| 1.15 |
% |
| 0.70 |
% |
| 1.49 |
% |
| 1.02 |
% |
|
|
| |
Portfolio
turnover rate(3) |
39 |
% |
| 35 |
% |
| 22 |
% |
| 45 |
% |
| 32 |
% |
|
|
| |
(1)Based
on average shares outstanding.
(2)Amount
is less than $0.01 per share.
(3)Portfolio
turnover is calculated on the basis of the Fund as a whole.
Pzena
Mid Cap Value Fund – Institutional Class
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|
|
|
|
|
|
|
|
| |
For
a share outstanding throughout each year |
Year
Ended February 29, |
| Year
Ended February 28, |
| Year
Ended February 28, |
| Year
Ended February 28, |
| |