Long/Short Value Fund

Our objective is to maximize total returns while maintaining a target beta of 0.50 by exploiting the skew in long-term performance between cheap and expensive stocks, as identified by Pzena through its price/normalized earnings calculations.

Fundamental research is the core of our investment process. Our long positions are typically in companies that are experiencing difficulties that our research suggests are likely to be temporary. We believe that very poor profitability tends not to persist. Over time, cycles turn, management takes actions, costs are cut, and excess industry capacity diminishes. For our shorts, we focus on stocks that screen as expensive on a price/normalized earnings basis because the market has gotten too optimistic about future earnings. We believe that very high levels of profitability or earnings growth usually are not sustainable, because of the principals of supply and demand.

Our investment process is bottom-up, one stock at a time. We do not value sectors in aggregate nor do we make explicit allocations to sectors, though we limit individual security and sector weights to control for risk.



Long/Short Value Fund

Characteristics as of 6/30/17

  Long/Short Value
Long Exposure 106%
Short Exposure -54%
Number of Stocks - Long 70
Number of Stocks - Short 78


Sector Weights as of 6/30/17

Sector   Long/Short Value Russell 1000® Index
Consumer Discretionary 10% 14%
Consumer Staples 2% 8%
Energy -2% 6%
Financial Services 31% 21%
Health Care 13% 14%
Materials & Processing -4% 4%
Producer Durables 0% 10%
Technology 2% 19%
Utilities 1% 5%
     

Sector weights adjusted for cash - may appear higher than actual.

 


Top 5 Holdings - Long as of 6/30/17

  % of Net Assets
Wal-Mart Stores, Inc. 3.9%
Omnicom Group, Inc. 3.9%
Exxon Mobil Corp 3.3%
Oracle Corp. 3.2%
Lamar Advertising Co. 3.1%
Total 17.4%


 

Top 5 Holdings - Short as of 6/30/17

  % of Net Assets
Regeneron Pharmaceuticals, Inc. -0.8%
Blackbaud, Inc. -0.8%
E*TRADE Financial Corp. -0.8%
RPC, Inc. -0.8%
United States Steel Corp. -0.8%
Total -4.0%


 

Performance as of 6/30/17

  Annualized
  QTR
2017
YTD
2017
One
Year
Three
Year
Since Inception
Mar 31, 2014
PZILX - Institutional Class -0.57% -0.10% 13.46% 3.35% 3.31%
PZVLX - Investor Class -0.67% -0.19% 12.99% 3.06% 3.01%
Russell 1000® Index 3.06% 9.27% 18.03% 9.26% 10.20%
50% Russell 1000® Index /
50% BofA Merrill Lynch 0-3 Mo. T-Bill Index
1.62% 4.72% 8.96% 4.77% 5.21%

PZILX Expense Ratio: Gross: 9.28%, Net: 2.53%*
PZVLX Expense Ratio: Gross: 9.63%, Net: 2.88%*


Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 844.PZN.1996 (844.796.1996). The fund imposes a 1.00% redemption fee on shares held 60 days or less. Performance does not reflect the redemption fee and, if it had, returns would be lower.

The Net Expense ratio represents the percentages paid by investors. The Net Expense ratio includes expenses relating to short sales. If expenses relating to short sales were excluded, the Total Expense ratio would have been 1.75% for PZILX and 2.10% for PZVLX.

**Contractual fee waivers (excluding acquired fund fees and expenses ("AFFE"), interest expenses, taxes, dividends on securities sold short and extraordinary expenses) through 6/27/18.

Long/Short Value Fund - Portfolio Managers


TVR Murti

Eli Rabinowich

Manoj Tandon

Tenure at Pzena:

Experience:

Education:

Principal, Portfolio Manager

11 years

17 years

Indian Institute of Technology, Bachelor of Technology in Mechanical Engineering
Indian Institute of Management, MBA

Principal, Portfolio Manager

12 years

14 years

Yeshiva University, BS in Finance
Columbia Business School, MBA

Principal, Co-Director of Research and Portfolio Manager

14 years

24 years

Indian Institute of Technology, Bachelor of Technology in Chemical Engineering
University of Virginia, PhD in Chemical Engineering
New York University, MBA

Tenure at Pzena:

11 years

12 years

14 years

Experience:

17 years

14 years

24 years

Education:

Indian Institute of Technology, Bachelor of Technology in Mechanical Engineering
Indian Institute of Management, MBA

Yeshiva University, BS in Finance
Columbia Business School, MBA

Indian Institute of Technology, Bachelor of Technology in Chemical Engineering
University of Virginia, PhD in Chemical Engineering
New York University, MBA

Beta is a statistic that measures the volatility of the fund, as compared to that of the overall market. Long and short exposure reflects the Fund's percentage of net assets invested in long positions (securities purchased) and short positions (securities sold short). This Fund enters into a short sale by selling a security it has borrowed. If the market price of a security increases after the Fund borrows the security, the Fund will suffer a potentially unlimited loss when it replaces the borrowed security at the higher price. Short sales also involve transaction and other costs that will reduce potential Fund gains and increase potential Fund losses.

The Russell 1000 Index is an unmanaged index and is a subset of the Russell 3000 Index; it measures the performance of approximately 1000 of the largest securities based on a combination of their market cap and current index membership. The Index cannot be invested in directly. The blended index represents a 50% weighting of the Russell 1000 Index, described above, and a 50% weighting of the Bank of America Merrill Lynch 3-month U.S. Treasury Bill Index. The Bank of America Merrill Lynch 3-month U.S. Treasury Bill Index measures the performance of short-term U.S. Government securities with a remaining term to final maturity of less than three months. The Index cannot be invested in directly.

Fund holdings, Sector exposure and characteristics are as of the date shown and are subject to change at any time. As a result, the Fund's current and future holdings, Sector exposure and characteristics may vary substantially from the information shown. No recommendation is made regarding the advisability of buying or selling any security.




Before you invest in Pzena Funds, please refer to the statutory and summary prospectuses for important information about the investment company, including investment objectives, risks, charges and expenses. You may also obtain a hard copy of the prospectuses by calling 1-844-PZN-1996 (1-844-796-1996) or by clicking on statutory prospectus or summary prospectus. The prospectuses should be read carefully before you invest or send money.

Mutual fund investing involves risk. Principal loss is possible. Investments in small-and mid-cap companies involve additional risks such as limited liquidity and greater volatility than larger companies. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in Emerging Markets.

Pzena Funds are offered only to United States residents, and information on this site is intended only for such persons. Nothing on this web site should be considered a solicitation to buy or an offer to sell shares of the Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction.

The price-to-normalized earnings ratio is a valuation ratio. It is defined as a company's current share price divided by Pzena's estimate of future earnings.

Investments in REITs are subject to the risks associated with the direct ownership of real estate.

The Pzena Funds are distributed by Quasar Distributors, LLC.