Audio Market Outlook & Commentary
Keeley Funds Market Outlook & Commentary - Mid-Year Update 2011
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Equity markets confronted an enormous amount of volatility in recent weeks, and a great deal of uncertainty remains as we head into the second half of 2011. Worsening economic results here in the U.S. and continued challenges facing Europe's sovereign debt woes hastened investor concerns over the past month. Despite these macroeconomic challenges, we have been pleased with the progress of many of our companies and opportunities within our core investment philosophies continue to develop nicely.
Please join us to listen to John L. Keeley, Jr. CFA, Brian R. Keeley, CFA, Robert Becker, CFA, and Thomas E. Browne Jr., CFA as they each reflect on a number of the macroeconomic concerns that have affected the market, and more importantly, how the recent volatility has created opportunities for our portfolios. We hope you will enjoy the following discussion as we continue to provide additional insight and transparency into our research process and investment discipline.
John L. Keeley, Jr., CFA is the President and Chief Investment Officer of Keeley Asset Management Corp., and lead portfolio manager of our flagship KEELEY Small Cap Value Fund, as well as the KEELEY Small-Mid Cap Value Fund, KEELEY Mid-Cap Value Fund, and KEELEY All-Cap Value Fund. Brian R. Keeley, CFA is an Assistant Manager on the KEELEY Small Cap Value Fund, the KEELEY Small-Mid Cap Value Fund, and the KEELEY Alternative Value Fund. Robert Becker, CFA is the Director of Research and a Senior Vice President of Keeley Asset Management Corp.Tom Browne Jr., CFA is the lead portfolio manager of the KEELEY Small Cap Dividend Value Fund and the KEELEY Mid Cap Dividend Value Fund.
Market Outlook and Commentary Transcript: 1 | 2 | 3 | 4 | Audio | PDF | iPod/MP3
IMPORTANT DISCLOSURES REGARDING ROUNDTABLE DISCUSSION
The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice.
The Russell Index referred to in the discussion is the Russell 2000 Value Index. The Russell 2000 Value Index measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Value Index is constructed to provide a comprehensive and unbiased barometer for the small-cap value segment. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set and that the represented companies continue to reflect value characteristics.
MAIN RISKS - KEELEY Small Cap Value Fund
The Fund is subject to the typical risks of equity investing, including loss of money, company-specific risks, the effects of interest rate fluctuations, investor psychology and other factors. The value of your investment will increase or decrease so your shares may be worth more or less money than your original investment.
Investing in companies emerging from bankruptcy presents special risks, since these companies often are subject to specific plans imposed by their lenders that they must meet in a fairly short time frame. In addition, such companies must overcome the negative perceptions resulting from a previous bankruptcy. Generally, companies going through corporate restructuring are more likely than others to remain undervalued.
Investing in small and mid-cap securities presents more risk than investing in large-cap or more established company securities. Small and mid-cap companies often have more limited resources and greater variation in operating results, leading to greater price volatility. Trading volumes may be lower, making such securities less liquid.
KEELEY Small Cap Value Fund (KSCVX) - Top Ten Holdings (as of 6/30/2011)* - % of Net Assets
Robbins & Myers, Inc. 1.32%
Colfax Corp. 1.17%
Wabtec Corp. 1.08%
WR Grace & Co. 1.06%
Genesee & Wyoming, Inc. 1.06%
Titan International, Inc. 1.05%
Trinity Industries, Inc. 1.04%
AMCOL International Corp. 1.01%
Carrizo Oil & Gas, Inc. 0.99%
HCC Insurance Holdings, Inc. 0.97%
Total % of portfolio: 10.75%
MAIN RISKS- KEELEY Small-Mid Cap Value Fund
The Fund is subject to the typical risks of equity investing, including loss of money, company-specific risks, the effects of interest rate fluctuations, investor psychology and other factors. The value of your investment will increase or decrease so your shares may be worth more or less money than your original investment.
Investing in companies emerging from bankruptcy presents special risks, since these companies often are subject to specific plans imposed by their lenders that they must meet in a fairly short time frame. In addition, such companies must overcome the negative perceptions resulting from a previous bankruptcy. Generally, companies going through corporate restructuring are more likely than others to remain undervalued.
Investing in small and mid-cap securities presents more risk than investing in large-cap or more established company securities. Small and mid-cap companies often have more limited resources and greater variation in operating results, leading to greater price volatility. Trading volumes may be lower, making such securities less liquid.
KEELEY Small-Mid Cap Value Fund (KSMVX) - Top Ten Holdings (as of 6/30/2011)* - % of Net Assets
iShares Total Return Russell 2000 2.10%
Walter Investment Management Corp. 1.17%
EnPro Industries, Inc. 1.12%
WR Grace & Co. 1.09%
TwinDisc, Inc. 1.07%
Red Robin Gourmet Burgers, Inc. 1.07%
Foot Locker, Inc. 1.05%
Hill-Rom Holdings, Inc. 1.04%
Discover Financial Services 1.01%
Penske Automotive Group, Inc. 1.00%
Total % of portfolio: 11.72%
MAIN RISKS- KEELEY Small Cap Dividend Value Fund
The Fund is subject to the typical risks of equity investing, including loss of money, company-specific risks, the effects of interest rate fluctuations, investor psychology and other factors. The Fund's method of security selection may not be successful and the Fund may underperform the stock market as a whole. Investing in small-cap securities presents more risk than investing in large-cap or more established company securities. The value of your investment will increase or decrease so your shares may be worth more or less money than your original investment.
Any repeal or failure to extend the current federal tax treatment of qualified dividend income could make dividend-paying securities less appealing to investors and could have a negative impact on the performance of the Fund. Also, the companies held by the Fund may reduce or stop paying dividends, which may affect the Fund's ability to generate income. The Adviser's approach in selecting dividend-paying securities may go out of favor with investors. This may cause the Fund to underperform relative to other mutual funds that do not emphasize dividend-paying stocks.
KEELEY Small Cap Dividend Value Fund (KSDVX) - Top Ten Holdings (as of 6/30/2011)* - % of Net Assets
Trinity Industries, Inc. 2.18%
Aarons, Inc. 2.17%
Arbitron, Inc. 2.08%
World Fuel Services Corp. 1.93%
iShares Russell 2000 Value Index Fund 1.85%
Textainer Group Holdings Ltd. 1.82%
Berry Petroleum Co. 1.79%
Foot Locker, Inc. 1.70%
Belo Corp . 1.66%
Northwestern Corp. 1.62%
Total % of portfolio: 18.80%
*Portfolio holdings will change, and should not be considered purchase recommendations. Top holdings do not reflect cash, money markets or options/futures contracts holdings.
Investors should consider carefully before investing in the Fund's investment objective, risks and charges and expenses. To obtain an additional prospectus, which contains that information and other information about the Fund, please call us at 800.533.5344 or visit www.keeleyfunds.com. Please read the prospectus carefully before you invest or send money.
Past performance does not guarantee future results. The performance data quoted represents past performance and current returns may be lower or higher. The investment return and principal will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Most current performance data may be obtained at www.KeeleyFunds.com.