KL Allocation Fund

 

GAVIX (I-share) $14.24 (.00%)
GAVAX (A-share) $14.05 (0.07%)

As of 9/21/2018

Investment Objective: To seek long-term capital appreciation with an emphasis on capital preservation.
Investment Strategy: The Fund employs an allocation strategy, moving between equities, fixed income and cash depending on market factors. Equity investments are selected from an index of companies the investment team identifies as Knowledge Leaders.
A Knowledge Leaders Strategy: The strategy seeks to transform the Knowledge Effect into portfolio alpha. The investment process aims to capture this market inefficiency using a proprietary methodology which capitalizes corporate knowledge investments, measures firm performance on a knowledge-adjusted basis, and selects investments in Knowledge Leader companies on the basis of knowledge intensity.
3 Ways to Use the Fund: May help investors improve • Portfolio performance Portfolio efficiency Downside protection

Key Facts

Inception Date:
Morningstar Category:
Lipper Category:
I-share/A-share:
I-share CUSIP:
A-share CUSIP:
Total Operating Expenses:
Distribution Frequency:
Benchmark:
9/30/2010
World Allocation
Flexible Portfolio
GAVIX/GAVAX
461418659
461418667
1.20%/1.45%
Annually
MSCI ACWI

Performance
(as of 8/31/2018)

As of 6/30/2018, the 1-year, 5-year and since inception annualized total returns for the KL Allocation Fund Advisor Class were 5.47%, 6.25% and 7.59% and Institutional Class were 5.75%, 6.51% and 7.88%, respectively. The MSCI All Country World Index’s 1-year, 5-year and since inception annualized total return as of 6/30/2018 were 10.73%, 9.41% and 8.96%. The total annual operating expenses of the Fund are 1.45% and 1.20% for the Advisor and Institutional Classes, respectively. The inception date for the KL Allocation Fund is 09/30/10.

The 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 888.998.9890 or visit our website at www.KnowledgeLeadersFunds.com

The Fund’s advisor has contractually agreed to waive its fees and/or pay for operating expenses of the Fund to ensure that total annual fund operating expenses do not exceed 1.50% and 1.25% of the average daily net assets for Advisor Class and Institutional Class shares of the Fund, respectively. This agreement is in effect until December 31, 2018. The Fund’s advisor is permitted to seek reimbursement from the Fund of fees waived for a period of three years from the date of the waiver or payment.

Past performance is no guarantee of future results. Ratings may reflect fee waivers in effect; in their absence, ratings may have been lower. Ratings for other share classes may vary. As of 6/30/18, the KL Allocation Fund (GAVIX) was rated against the following numbers of U.S.-domiciled World Allocation funds over the following time periods: 394 funds in the last three years and 394 funds overall. With respect to these World Allocation funds, the KL Allocation Fund (GAVIX) received a Morningstar Rating of 3 stars and 3 stars for the three-year and overall periods, respectively. Please note: Morningstar ratings do not reflect the 5-year or greater time periods in the World Allocation category before the fund’s strategy changed to add a secondary objective of capital preservation and a targeted fixed income allocation. The Morningstar ratings highlighted here reflect the time period since that update.

Moneyball Investing: Winning the Loser’s Game
Oakland A’s Coach Billy Beane’s genius was transforming professional baseball from a Winner’s Game, in which the actions of a few superstars dictated the outcome, to a Loser’s Game, where the team that made the fewest errors won. Legendary investor Charles Ellis has declared that active money management also has turned from a Winner’s Game to a Loser’s Game. Today, when over 90% of active managers are underperforming*, success may be as much about selling the wrong stocks as buying the right ones. 

In the KL Allocation Fund, we apply a Moneyball approach: seeking to outperform by making fewer mistakes than the overall market. Of the 12  5%+ market drawdowns since inception of the fund, the fund has outperformed in all 12 (as of 12/31/17). By striving never to own securities that experience a major drawdown, we aim to manage a portfolio with a very low max drawdown.

Download our new white paper Moneyball Investing: Winning the Loser’s Game.

Risk Metrics
(as of 8/31/2018 - Trailing 5 Years)

Risk Metrics

GAVIX MSCI All Country World Index
Total Return (%)
6.03
9.67
33
Alpha (%)
0.24
 0.00
15
Beta
0.58
1.00
29
Max Drawdown (%)
-9.70
-13.45
37
Up/Down Capture Ratio
1.13
1.00
8
Treynor Ratio
9.47
9.14
17
Sharpe Ratio
0.76
0.92
43
Sortino Ratio
1.30
1.58
37
Standard Deviation (%)
7.32
9.98
61

Past performance does not guarantee future results.

Diversification Analysis
(as of 8/31/2018)

The KL Allocation Fund had a low correlation to benchmark indexes compared to the Morningstar category average and a high tracking error, indicating a high level of active management and conviction. A fund with a high active share means the fund’s holdings are significantly different from the benchmark. Studies show high active share may be a significant predictor of performance.*Active Share is a term introduced by Martijn Cremers and Anti Petajisto in a March 31, 2009 paper, “How Active Is Your Fund Manager? A New Measure That Predicts Performance.” They defined the term as the “fraction of the portfolio that is different from the benchmark index” and found in a study of domestic equity funds from 1980-2003, “funds with the highest Active Share significantly outperformed their benchmarks, both before and after expenses, and they exhibited strong performance persistence.  **Morningstar World Allocation Category

Allocations
(as of 8/31/2018)

Asset Allocations

Asset
Percent
Equity
42.03
Cash
29.49
Fixed Income
23.35
Precious Metals
5.13

Equity Allocations by Sector

Sector
Percent
Energy
38.07
Information Technology
16.68
Materials
12.49
Industrials
11.67
Consumer Discretionary
1.28

Equity Allocations by Country

Country
Percent
United States
51.86
Japan
15.68
Australia
10.62
United Kingdom
6.52
Norway
4.05
Switzerland
3.21
Canada
2.93
Chile
2.38
Taiwan
1.46
Hong Kong
1.28

Top 20 Equity Holdings
(as of 8/31/2018)

Company
% Weight in Portfolio
Inpex Corp
1.92%
National Oilwell Varco Inc
1.84%
Equinor
1.70%
Becton Dickinson & Co
1.66%
Fuji Electric
1.65%
Baxter Intl Inc
1.55%
Celanese Corp
1.49%
Cochlear Ltd
1.46%
BHP Billiton Plc
1.38%
FLIR Systems
1.37%
Royal Dutch Shell
1.37%
Origin Energy Ltd
1.36%
Schindler
1.35%
Chevron Corp
1.34%
Waters Corp
1.33%
Microsoft Corp
1.33%
Cisco Systems
1.31%
Intuit
1.27%
Suncor Energy
1.23%
Hoya
1.20%

PDF View Entire Portfolio Holdings

Fund Materials & Commentary

A complete guide to the KL Allocation Funddownload

Everything you need to know to invest in the KL Allocation Fund download

An overview of our investment strategy and productsdownload

KL Allocation Fund quarterly performance update & analysis download

Archives

What is the Knowledge Effect?

The Knowledge Effect is the tendency of highly innovative companies to generate excess returns in the stock market. It is a market anomaly based on decades of academic research. To learn more, read our white paper, The Knowledge Effect: Excess Returns of Highly Innovative Companies.

See Terms and Conditions

Please consider the Fund’s investment objectives, risks, charges and expenses before investing. The prospectus or summary prospectus that contains this and other information about the Fund, is available by calling 888.998.9890 and should be read carefully.

The value of the securities held by the Fund will change due to general market and economic conditions and industry perceptions. Investments in non-US issuers may involve unique risks. Currency fluctuation, adverse political, economic or social developments could undermine the value of the Fund’s investments. The securities of mid-cap companies may be subject to more abrupt or erratic market movements and may have lower trading volumes. Many of the risks with respect to foreign investments are more pronounced for investments in issuers in developing or emerging market countries. An investment in a fund that is less diversified across countries or geographic regions is generally riskier than an investment in a more geographically diversified fund.

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. The blended benchmark is comprised 60% of the MSCI All Country World Index and 40% of the Barclays US Treasury Bond Index. Percentages are allocated to equity invested.

The KL Allocation Fund is distributed by IMST Distributors, LLC.

© 2018 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

Morningstar RatingTM
The Morningstar RatingTM for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

* The Morningstar percentile ranking is based on the fund’s total return relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 84 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 73% in the 3 year period among 443 peers, and 25% in the 5 year period among 411 peers. The Morningstar percentile ranking is based on the fund’s alpha relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 95 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 69% in the 3 year period among 443 peers, and 12% in the 5 year period among 411 peers. The Morningstar percentile ranking is based on the fund’s beta relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 81 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 34% in the 3 year period among 443 peers, and 32% in the 5 year period among 411 peers. The Morningstar percentile ranking is based on the fund’s max drawdown relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 93 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 32% in the 3 year period among 443 peers, and 8% in the 5 year period among 411 peers. The Morningstar percentile ranking is based on the fund’s up/down capture ratio relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 94 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 66% in the 3 year period among 443 peers, and 9% in the 5 year period among 411 peers.The Morningstar percentile ranking is based on the fund’s treynor ratio relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 88 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 72% in the 3 year period among 443 peers, and 13% in the 5 year period among 411 peers. The Morningstar percentile ranking is based on the fund’s sharpe ratio relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 88 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 79% in the 3 year period among 443 peers, and 37% in the 5 year period among 411 peers. The Morningstar percentile ranking is based on the fund’s sortino ratio relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 87 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 79% in the 3 year period among 443 peers, and 35% in the 5 year period among 411 peers. The Morningstar percentile ranking is based on the fund’s standard deviation relative to all funds that have the same category for the same time period. The KL Allocation Fund (GAVIX) was in the 86 percentile for the 1 year period among 483 peers in the Morningstar World Allocation Category; 62% in the 3 year period among 443 peers, and 61% in the 5 year period among 411 peers. The highest (or most favorable) percentile rank is 1%, and the lowest (or least favorable) percentile rank is 100%. Rankings listed are for the period July 31, 2018. Ratings for other share classes may differ due to different performance characteristics. The Fund’s ratings reflects fee waivers in effect; in their absence, ratings may have been lower. Multiple share classes of a fund have a common portfolio but impose different expense structures.

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