ARISTOTLE/SAUL GLOBAL OPPORTUNITIES FUND 2Q15 Shareholder Letter FOR MORE INFORMATION, PLEASE CONTACT: Phone: (844) ARISTOTLE | Email: [email protected] | Web: www.aristotlefunds.com July 1, 2015 Dear Fellow Shareholders, This quarter, we were a bit more active than usual as we replaced five companies in the Fund with investments that offer what we consider to be more favorable risk-reward profiles. You should continue to anticipate a low portfolio turnover as two key tenets of our investment philosophy are 1) the benefits of investing in attractive businesses that get better with time and 2) the importance of thinking like an owner of a company, not a renter of a stock. We periodically find more compelling investment opportunities and, when we make this determination, we do not hesitate to act. In an effort to continually educate you on the how’s and why’s of our investment process, what follows is a brief commentary on idea generation; specifically, how we identified global agricultural and construction equipment manufacturer Kubota Corporation and why we are interested in what we believe are two resilient consumer companies in Brazil, Hypermarcas SA and Kroton Educacional SA. As we have discussed before, when investing globally, it is paramount to know what you are looking for which dramatically shrinks your investable universe to a more manageable level; we think of ourselves as spearfishermen with a specific target, not commercial fishermen casting a wide net. Our approach to global investing is less about screening and buying cheap stocks (e.g. commercial fishing) and more about finding business models with unique attributes and exposures and buying them when you have a well-founded differentiated view. Many of our ideas come from “following the dots”, a phrase coined by our CIO, Howard Gleicher; an example of this form of idea generation is our investment this quarter in Kubota Corporation. One can think of Kubota as the “Deere of small field farming equipment”. Deere is a company that ticks most of our boxes. We have studied the global agricultural and construction equipment industry for many years and, throughout this never-ending learning process, we became increasingly impressed with Kubota; a competitor that seems to be thriving while the industry is not. This ability to improve in spite of the economic environment through differentiated products and technological Summary “Following the dots” led us from Deere & Company to Kubota Corporation (page 1) It became increasingly clear that our views on two resilient Brazilian consumer companies, Hypermarcas SA and Kroton Educacional SA, were not widely held (page 2) Market Observations (page 4): China’s roller coaster, Japan’s corporate governance revolution, U.S. M&A taking off, Australia’s lack of recession and Unilever CEO’s comments on U.S. economy (page 4) Performance (page 5): The Aristotle/Saul Global Opportunities Fund returned 0.75% (net of all taxes and fees) in 2Q15 and 2.08% in 1H15. Regionally, Japan was the largest contributor to performance, followed by Europe while the U.S. was the weakest. Investment Activity (page 6): During 2Q15, we added five new companies to the Fund (Experian, Hypermarcas, Kroton, Kubota and Sandfire) and sold the Fund’s position in six companies (adidas, Compass, EMC, Goodrich, IAMGOLD and Shell) Performance data quoted here represents past performance. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month-end please call 1-888-661-6691.
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ARISTOTLE/SAUL GLOBAL OPPORTUNITIES FUND 2Q15
Shareholder Letter
FOR MORE INFORMATION, PLEASE CONTACT: Phone: (844) ARISTOTLE | Email: [email protected] | Web: www.aristotlefunds.com
July 1, 2015 Dear Fellow Shareholders, This quarter, we were a bit more active than usual as we replaced five companies in the Fund with investments that offer what we consider to be more favorable risk-reward profiles. You should continue to anticipate a low portfolio turnover as two key tenets of our investment philosophy are 1) the benefits of investing in attractive businesses that get better with time and 2) the importance of thinking like an owner of a company, not a renter of a stock. We periodically find more compelling investment opportunities and, when we make this determination, we do not hesitate to act. In an effort to continually educate you on the how’s and why’s of our investment process, what follows is a brief commentary on idea generation; specifically, how we identified global agricultural and construction equipment manufacturer Kubota Corporation and why we are interested in what we believe are two resilient consumer companies in Brazil, Hypermarcas SA and Kroton Educacional SA. As we have discussed before, when investing globally, it is paramount to know what you are looking for which dramatically shrinks your investable universe to a more manageable level; we think of ourselves as spearfishermen with a specific target, not commercial fishermen casting a wide net. Our approach to global investing is less about screening and buying cheap stocks (e.g. commercial fishing) and more about finding business models with unique attributes and exposures and buying them when you have a well-founded differentiated view. Many of our ideas come from “following the dots”, a phrase coined by our CIO, Howard Gleicher; an example of this form of idea generation is our investment this quarter in Kubota Corporation. One can think of Kubota as the “Deere of small field farming equipment”. Deere is a company that ticks most of our boxes. We have studied the global agricultural and construction equipment industry for many years and, throughout this never-ending learning process, we became increasingly impressed with Kubota; a competitor that seems to be thriving while the industry is not. This ability to improve in spite of the economic environment through differentiated products and technological
Summary
� “Following the dots” led us from Deere & Company to Kubota Corporation (page 1)
� It became increasingly clear that our views on two resilient Brazilian consumer companies, Hypermarcas SA and Kroton Educacional SA, were not widely held (page 2)
� Market Observations (page 4): China’s roller coaster, Japan’s corporate governance revolution, U.S. M&A taking off, Australia’s lack of recession and Unilever CEO’s comments on U.S. economy (page 4)
� Performance (page 5): The Aristotle/Saul Global Opportunities Fund returned 0.75% (net of all taxes and fees) in 2Q15 and 2.08% in 1H15. Regionally, Japan was the largest contributor to performance, followed by Europe while the U.S. was the weakest.
� Investment Activity (page 6): During 2Q15, we added five new companies to the Fund (Experian, Hypermarcas, Kroton, Kubota and Sandfire) and sold the Fund’s position in six companies (adidas, Compass, EMC, Goodrich, IAMGOLD and Shell)
Performance data quoted here represents past performance. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month-end please call 1-888-661-6691.
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leadership intrigued us. During a meeting earlier this year with Deere CEO Sam Allen, he highlighted Kubota as an innovative company that is giving them a hard time in a few key markets. Kubota is increasing global market share in dry field farming and increasing North American market share in construction equipment. More details on our investment in this overlooked $20 billion market capitalization Japanese company can be found in the investment activity section (page 6). While the market is focused on whether Greece can pay its bills one more week or not (we find it fascinating
how many people invest on hope these days and believe every single word coming out of policy officials), we
find it a more productive use of our time to continue to focus on learning more about businesses that are
improving their competitive advantage and that can emerge stronger during times of adversity; what we call all-terrain-vehicle type companies.
We believe, one of the many benefits of investing globally, as opposed to focusing on just one country or
region, is the diverse exposure it can provide to various economies, markets and businesses around the world.
Throughout the years of studying businesses globally and travelling to over 60 countries, we have identified
companies that have similar attributes or exposures to familiar multi-national market leaders but
happened to be headquartered in a less familiar country and thus may be overlooked.
We really like it when these companies are in the early stages of a transformation that the market may be
misunderstanding by myopically focusing on the rear-view mirror rather than what lies ahead three to five
years out. Sometimes the market applies a significant discount to intrinsic value because of where these
businesses are domiciled or some sort of cyclical event that the market might price as if it was structural.
Capitalizing on these potential inefficiencies when we can find them is one of the reasons we named this strategy “Global Opportunities”.
This quarter, we visited the seventh largest economy in the world, Brazil, with a targeted agenda to gain a
deeper understanding of opposing views on Hypermacas SA and Kroton Educacioncal SA as it was
becoming increasingly clear that our view on these two resilient businesses was not widely held. We
had identified both of these companies as potential investment candidates given their market position,
economies of scale and brand recognition. Hypermarcas can be thought of as the Reckitt Benckiser of
Brazil (Reckitt is the owner of Mucinex medicines, Durex condoms, etc.) and Kroton can be thought of as
(a better version of) the DeVry Education of Brazil. These businesses are growing at rates that are above
the level of their global peers despite the faltering Brazilian economy and their moats are improving, in our opinion.
Gone is the use of the term “BRIC” (Brazil, Russia, India and China; coined by former Goldman Sachs
economist Jim O’Neil) and the hype of 2003 when several brokers were launching dedicated investment
funds to capitalize on this branded theme. After more than four years of declining commodity prices and
failed populist government policies that disincentivized productive investment, the country is going through a
difficult recession, inflation is an issue and Brazilian equities have more than halved in U.S.-dollar terms.
Negative sentiment may be too extreme, particularly for businesses that provide education, health and
personal care, and should benefit from the countries inevitable growth for the years to come. Despite a
population of over 200 million people, positive demographics and an improving middle class, the Gross Domestic Product (GDP) of Brazil is still only equivalent to that of California!
While you will find the specifics about the investment thesis on both Brazilian companies in the investment
activity section (page 6), we would like to highlight the unique attributes of the Brazilian industries that we invested in: Education (Kroton) and Health & Personal Care (Hypermarcas).
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The first industry is Education. Brazil is one of the least penetrated countries in the world in post-
secondary education and fifth largest market in the world after China, India, U.S and Russia. Brazil
demographics are quite favorable for future growth with 23 million people aged 18 to 24 (11% of Brazilian
population) and an additional 12 million people of pent-up demand aged 25 to 35 with a secondary degree
that have not entered or completed post-secondary education. However, only about 7.3 million students are
currently enrolled in post-secondary education. Government financing and scholarship programs as well as distance learning programs are incentivizing this part of the population to go back to school.
Post-secondary education has been identified by the local government as the major bottleneck for economic
development together with infrastructure investment. As a result, the government is targeting the penetration
rate to be in line with OECD (Organization for Economic Co-operation and Development) countries by
2020. Post-secondary education penetration rate in Brazil has doubled in the last decade but it is still 40% lower than the OECD average. It is also less than half of neighboring countries like Chile and Argentina.
The government has been funding private education through the Financiamento Estudiantil (FIES) program
(average loan of 3.4% nominal interest with 15 years maturity). It is estimated that the cost for the
government under this private funding system is 1/3 of the cost of funding public schools. As a result, private post-education facilities have been achieving the bulk of the growth.
However, the FIES program is currently under pressure as the government is facing budgetary cuts during
the recession and a new private funding approach is being worked out with the largest banks in the country.
Because of this uncertainty, the market might be pricing an issue that, in our view, is cyclical as if it was a
structural long term problem. We had the opportunity to buy market leader Kroton. This is one of the
largest for profit education companies in the world with significant scale advantages that has been
consolidating a fragmented market and could continue to benefit during current weakness as the weakest players are suffering the most.
The other two industries we found particularly unique in Brazil are the Health and Personal Care markets.
Brazil’s Pharmaceutical industry is unique and evolving; it is the sixth largest market globally (per
Intercontinental Marketing Services World Review; May 2014) and is projected to move to fourth largest by
2018, only lagging behind the U.S.A, China and Japan. Despite the size of the market, pharma consumption
is 1/10th that of the U.S.A. and 1/8th that of Japan. While everyone that works in Brazil has health insurance
supplied by the government, the service is inadequate. Insurance does not pay for drugs, instead
consumers must pay out-of-pocket. This is likely the reason why Brazil is not a big patent drug country,
with less than 10% of drugs sold in country being patented. Another unique characteristic in Brazil is that the
countries 700,000 grocery stores are not allowed to sell drug-related products. However, pressure is
increasing to level the playing field and remove this restriction, as starting last year the country’s 70,000
pharmacies were allowed to sell non-drug related products for the first time. In addition to the numerous
company specific improvements on-going at Hypermarcas, with relevant positioning in all pharma markets
and #1 position in OTC (over-the-counter) medicines, we believe these industry-related tailwinds in Brazil can support growth at the company for years to come.
Surprising to many, Brazil is the third largest personal care market in the world. For those of you that
have visited the country, it will come as no surprise that Brazilians are obsessed with their image and looks.
For example, they take an average of 12 showers per week (in California, our home State, it is almost
becoming a crime to shower once a day because of the drought) so they are heavy consumers of shampoo,
soap, deodorant, etc. Over the last few years, international companies like Unilever, Procter & Gamble,
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Reckitt Benckiser and L’Oreal have been losing market share to Hypermarcas. In personal care, the
company now has market share leadership in condoms, shaving cream, skin care, nail polish and adult diapers.
More details on our investments in these overlooked and misunderstood Brazilian companies can be found in
the investment activity section (page 6).
MARKET OBSERVATIONS:
Source: Bloomberg All returns are as of 6/30/2015.
We found the following headlines/comments notable in the second quarter of 2015:
� The Shenzhen Chinese stock index (trades local A-shares only) increased 121% from January 1st, 2015
through June 12th, 2015. At that time it was trading at 77x earnings. The index fell 21% over the last two
weeks of June.
� On June 1st, Japan’s new corporate-governance code came into effect. This is the first time in history a
Japanese government has proposed rules for how a company should conduct their affairs. Among other
items, the code obliges firms to employ at least two outside directors to boards.
� The number of hostile takeovers launched by U.S. companies since the beginning of 2015 has doubled
from the same period last year and overall M&A activity is at its highest level since 2007.
� A less relevant but noteworthy fact is that Australia is the only advance economy not to record a
recession since 1991. After being bailed out by Chinese stimulus spending following the Global Financial
Crisis, an entire generation has not experienced a recession.
� At a recent investment conference in Europe this quarter, we were startled with the candor of Unilever
CEO Paul Polman when answering a question regarding the state of the U.S. economy: “The U.S. economy
has completely disconnected from headline GDP numbers that don’t reflect reality. You have 70 million people living below
the poverty line, you have a middle class that is disappearing and the income of the average American hasn’t changed in 30
ARISTOTLE
years for the first time in history whilst productivity has doubled. It’s clear tha
markets”.
PERFORMANCE
The Aristotle/Saul Global Opportunities Fund in 1H15. Regionally, Japan was the largest contributor to performance, followed by was the weakest. As initially discussed in the 4Q14 commentary, we hedge currency exposure if we can cost-effectively do so. At the end of the q50% hedged on its exposure to the yen, euro, Canadian dollarour significant non-U.S. dollar exposures, our intent is to reduce the Fund’s exposure to potential currency fluctuations. As such, we do not actively manage the hedges and intend to maintainexposure for the foreseeable future. The Fund’s bottom five contributors for the quarter detracted
The Fund’s top five contributors for the quarter added
Below is a snapshot of the Fund’s quarter
Underappreciated QualityBank of America Corp.
Canadian Natural Resources Ltd.
Dassault Systèmes SA
Diageo plceBay Inc.
Experian plcGivaudan SA
Medtronic Inc.
Microsoft Corp.Mondelez International Inc.
Oracle Corp.Unilever NV
Walgreen Co.
*Fixed income positions in italics
26%
Allocation to respective bucket as a % of total portfolio:
↑ 0.9% YTD†
RISTOTLE/SAUL GLOBAL OPPORTUNITIES F
time in history whilst productivity has doubled. It’s clear that all the value creation occurred in the capital
The Aristotle/Saul Global Opportunities Fund returned 0.75% (net of all taxes and fees) in 2Q15was the largest contributor to performance, followed by Europe while the U.S.
As initially discussed in the 4Q14 commentary, we hedge approximately effectively do so. At the end of the quarter, the Fund was approximately
50% hedged on its exposure to the yen, euro, Canadian dollar, Australian dollar and British pound. Given U.S. dollar exposures, our intent is to reduce the Fund’s exposure to potential currency
ations. As such, we do not actively manage the hedges and intend to maintain roughly
contributors for the quarter detracted 1.56% (in local currencies) from total return:
contributors for the quarter added 1.46% (in local currencies) to total return:
the Fund’s quarter-end weighting and holdings in each style bucket:
† Year to date, YTD, contribution to return excludes currency impacts (↓1.8%)
Allocation to respective bucket as a % of total portfolio:
38%
↑ 2.8% YTD†
↑ 0.8 % YTD
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t all the value creation occurred in the capital
in 2Q15 and 2.08% Europe while the U.S.
approximately 50% of the Fund’s uarter, the Fund was approximately
and British pound. Given U.S. dollar exposures, our intent is to reduce the Fund’s exposure to potential currency
roughly 50% hedged
% (in local currencies) from total return:
currencies) to total return:
end weighting and holdings in each style bucket:
Favor QualityCoal Inc.*
Cameco Corp.
Centamin plc
Gold Inc.Dundee Precious Metals
Erste Group Bank AGKinross Gold Corp.
Newcrest Mining Ltd.
Sandfire Resources NLUranium Participation Corp.
↓1.8%) and fees
17%
0.8 % YTD†
ARISTOTLE
INVESTMENT ACTIVITY
During the second quarter, we added
…and sold the Funds position in six
One of our objectives is to clearly articulate our intent and actions to fellow shareholdersbelow is a brief summary of the new investment
RISTOTLE/SAUL GLOBAL OPPORTUNITIES F
added five new companies to the Fund…
six companies.
One of our objectives is to clearly articulate our intent and actions to fellow shareholdersthe new investments and detailed explanations for our sales in the quarter.
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One of our objectives is to clearly articulate our intent and actions to fellow shareholders. As such, in the quarter.
ARISTOTLE
RISTOTLE/SAUL GLOBAL OPPORTUNITIES F
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RISTOTLE/SAUL GLOBAL OPPORTUNITIES F
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adidas AG During the quarter, we sold the Fund’s position in adidas following a significant recovery in the stock price. While management is doing many of the right things and refocusing on heartbeat sports (soccer, cricket, rugby), we are not as convinced as others that adidas has “righted the ship” with regard to turning around North America. In addition, we are uncertain who will be at the helm once longtime CEO Herbert Hainer steps down. Compass Group plc During the quarter, we sold the Fund’s position in Compass as we felt we no longer held a well-founded differentiated view on the well-run, cash generative company. The sale proceeds were used to fund the investment in Experian which we believe is a more optimal investment at this time. EMC Corporation During the quarter, we sold the Fund’s position in EMC. While the “stock” continues to look “cheap”, we are growing increasingly concerned as the legacy storage market continues to evolve away from the company’s strengths and leadership uncertainty given that long-time CEO Joe Tucci continues to delay his retirement. While we are keenly aware of the potential for the company to be acquired, we chose to step aside and used part of the sale proceeds to add to what we believe to be a more optimal investment in eBay, Oracle and Microsoft.
Goodrich Petroleum Corporation During the quarter, we sold the Fund’s remaining position in the Goodrich bonds. We sold most of the position in late 3Q14 for a small gain, but unfortunately realized a loss on the residual portion as too many questions remain unanswered regarding the company’s balance sheet and strategy. IAMGOLD Corporation During the quarter, we sold the Fund’s position in the IAMGOLD bonds. The investment thesis has changed as management recently sold the company’s key asset, Niobium mines. It is not clear how the significant cash proceeds of the company will be utilized going forward. We saw better risk-reward elsewhere (Sandfire). Royal Dutch Shell plc During the quarter, we sold the Fund’s position in Royal Dutch Shell. While we applaud the counter-cyclical acquisition of BG Group, the 50% premium paid was excessive in our opinion. In addition, the deal increases the companies leverage to oil price and adds uncertainty to the sustainability of the dividend over the medium-term. We saw more optimal investments that have similar attributes and exposures. This decision was also partially a result of the Fund’ recent allocation to Brazilian equities, which increases exposure to a commodity currency (Brazilian Real) that we cannot cost effectively hedge. CONCLUSION As always, we continue to focus our time on gaining a deeper understanding of businesses and industries and searching for new opportunities in what we believe to be unique and differentiated companies where we have a well-founded differentiated view of the business or its earnings power. We wish you all an enjoyable summer and look forward to communicating with you again this fall. Warm regards, Greg and Alberto
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Aristotle/Saul Global Opportunities Fund (Class I) Performance Update June 30, 2015
Total Return First Half 2015 1- Year 3- Year Annualized Since
Inception (3/30/12)
Gross/Net Expense Ratio
At NAV 2.08% -9.23% 6.69% 4.22% 2.54% / 1.15%
Performance data quoted here represents past performance. Past performance is no guarantee of future results. Investment return and principal value will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance information quoted. To obtain performance information current to the most recent month‐end please call 1‐888‐661‐6691. The Fund’s advisor has contractually agreed to waive certain fees and/or absorb expenses, through April 30, 2016, to the extent that the total annual operating expenses do not exceed 1.10% of average daily net assets of the Fund. The Fund’s advisor may seek reimbursement from the Fund for waived fees and/or expenses paid for three years from the date of the waiver or payment. Without these reductions, the Fund’s performance would have been lower. A redemption fee of 1.00% will be imposed on redemptions of shares within 30 days of purchase.
Disclosures:
The can be no guarantee that any strategy (risk management or otherwise) will be successful. All investing involves risk, including
potential loss of principal.
The views in this letter were as of the date stated and may not necessarily reflect the same views on the date this letter is first
published or any time thereafter. These views are intended to help shareholders in understanding the Fund’s investment
methodology and do not constitute investment advice.
You should not assume that any of the securities transactions, sectors or holdings discussed in this report are or will be profitable, or that recommendations Aristotle Capital makes in the future will be profitable or equal the performance of the securities listed in this report. There is no assurance that any securities, sectors or industries discussed herein will be included in or excluded from an account’s portfolio. Aristotle Capital reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. This is not a recommendation to buy or sell a particular security. All recommendations for the last 12 months are available upon request. An investment in the Fund is subject to risks and you could lose money on your investment in the Fund. The principal risks of investing in the Fund include, but are not limited to, investing in foreign securities, emerging markets, short sales, derivatives, below investment grade bonds, convertible securities, and ETFs. Foreign securities have additional risks including currency rate changes, political and economic instability, lack of comprehensive company information, less market liquidity, less efficient trading markets, and differing auditing controls and legal standards. Investments in emerging markets involve even greater risks. The use of short sales and ETFs may cause the Fund to have higher expenses than those of other equity funds. Short sales are speculative transactions and involve special risks, including a greater reliance on the investment team's ability to accurately anticipate the future value of a security. The Fund’s losses are potentially unlimited in a short sale transaction. The Fund’s use of short sales and futures contracts leverages the Fund’s portfolio. The Fund’s use of leverage can make the Fund more volatile and magnify the effect of any losses. There is no assurance that a leveraging strategy will be successful.
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The Fund may invest in derivatives which can be highly volatile, illiquid, difficult to value, and changes in the value of a derivative may not correlate with the underlying securities or other securities held directly by the Fund. Such risks include gains or losses which, as a result of leverage, can be substantially greater than the derivatives' original cost. There is also a possibility that derivatives may not perform as intended which can reduce opportunity for gain or result in losses by offsetting positive returns in other securities the Fund owns.
Definitions:
• You cannot invest directly into an index.
• The Gross Domestic Product (GDP) is defined by the Organization for Economic Co-operation and Development (OECD)
as an aggregate measure of production equal to the sum of the gross values added of all resident, institutional units
engaged in production (plus any taxes, and minus any subsidies, on products not included in the value of their outputs.
• The MSCI All Country World Index (ACWI) captures large and mid cap representation across 23 Developed Markets and
21 Emerging Markets countries. With over 2,400 constituents, the index covers approximately 85% of the global
investable equity opportunity set.
• The S&P 500® Index is the Standard & Poor's Composite Index of 500 stocks and is a widely recognized, unmanaged
index of common stock prices.
• The MSCI Europe Index captures large and mid cap representation across 15 Developed Markets countries in Europe.
With 436 constituents, the index covers approximately 85% of the free float-adjusted market capitalization across the
European Developed Markets equity universe.
• The Nikkei-225 Stock Average is a price-weighted average of 225 top-rated Japanese companies listed in the First
Section of the Tokyo Stock Exchange.
• The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure
equity market performance in the global emerging markets.
• The Brent Forward Dated index is designed to track the performance of the Brent crude market, based on the closest
contract expirations. Brent Crude is a major trading classification of sweet light crude oil that serves as a major
benchmark price for purchases of oil worldwide.
• The CRB Spot Index is the Credit Research Bureau (CRB) Spot Price Market Index. The Spot Market Price Index is a
measure of price movements of 22 sensitive basic commodities whose markets are presumed to be among the first to
be influenced by changes in economic conditions. As such, it serves as one early indication of impending changes in
business activity.
• Gold Spot, Platinum Spot and Copper Spot are a commonly used standards for the value of an ounce of gold, platinum,
and copper (respectively) based on the price paid for the precious metal based upon immediate delivery.
• Treasuries are negotiable debt obligations of the U.S. government secured by its full faith and credit and issued at
various schedules and maturities.
• The Federal Funds rate is the interest rate charged by banks with excess reserves at a Federal Reserve district bank to
banks needing overnight loans to meet reserve requirements. The federal funds rate is the most sensitive indicator of
the direction of interest rates, since it is set daily by the market.
The volatility (beta) of the account may be greater or less than the benchmarks. An investor cannot invest directly in these
indices.
Effective January 17, 2014, Aristotle/Saul Opportunity Fund has been renamed Aristotle/Saul Global Opportunities Fund. In
addition, the Fund’s investment strategy has been updated.
Portfolio composition will change due to ongoing management of the Fund. References to specific securities or sectors should
not be construed as recommendations by the Fund, its Advisor or Distributor.
As of June 30, 2015, the Fund’s 10 largest positions as a percent of total net assets were: Samsung Electronics 2.93%, Mondelez
International Inc 2.56%, Kurita Water Industries Ltd 2.49%, eBay Inc 2.48%, Newcrest Mining Ltd 2.32%, MS&AD Insurance Group
Holdings 2.24%, Diageo Plc (ADR) 2.15%, Microsoft Corp 2.13%, Oracle Corp 2.12% and Toray Industries Inc 2.02%.
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Please consider the Fund’s investment objectives, risks, charges and expenses carefully before investing. The prospectus or summary prospectus that contains this and other information about the Fund is available by calling 1-888-661-6691 or by visiting aristotlefunds.com and should be read carefully prior to investing.
The Aristotle/Saul Global Opportunities Fund is distributed by IMST Distributors, LLC.
