KL Allocation Fund

 

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:
I-share/A-share:
I-share CUSIP:
A-share CUSIP:
Total Operating Expenses:
Distribution Frequency:
Benchmark:
9/30/2010
World Allocation
GAVIX/GAVAX
461418659
461418667
1.24%/1.49%
Annually
MSCI ACWI
 

Performance
(as of 7/31/2019)

As of 6/30/2019, the 1-year, 5-year and since inception annualized total returns for the KL Allocation Fund Advisor Class were -0.47%, 3.83% and 6.64% and Institutional Class were -0.18%, 4.08% and 6.93%, respectively. The MSCI All Country World Index’s 1-year, 5-year and since inception annualized total return as of 6/30/2019 were 5.74%, 6.16% and 8.59%. The total annual operating expenses of the Fund are 1.49% and 1.24% 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 Advisor has contractually agreed to waive its fees and/or pay for operating expenses of the Fund to ensure that the total annual fund operating expenses (excluding any taxes, leverage interest, brokerage commissions, dividend and interest expenses on short sales, acquired fund fees and expenses (as determined in accordance with Form N-1A), expenses incurred in connection with any merger or reorganization, and extraordinary expenses such as litigation expenses) do not exceed 1.50% and 1.25% of the average daily net assets of Advisory Class and Institutional Class shares of the Fund, respectively. This agreement is in effect until December 31, 2019, and it may be terminated before that date only by the Trust’s Board of Trustees.

Moneyball Investing 2019: 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 15  5%+ market drawdowns since inception of the fund, the fund has outperformed in all 15 (as of 6/30/19). By striving never to own securities that experience a major drawdown, we aim to manage a portfolio with a very low max drawdown.

Our most popular report ever was January 2018’s Moneyball Investing, Winning the Loser game. After a year of volatility and a new waterfall decline in 2018, we revisited our Moneyball analysis to explore how it stands up to new data.  Download our new white paper Moneyball Investing 2019: Winning the Loser’s Game.

Risk Metrics
(as of 7/31/2019 - Trailing 5 Years)

 

Risk Metrics
GAVIX
MSCI All Country World Index
Alpha (%)
0.62
0.00
Beta
0.48
1.00
Max Drawdown (%)
-15.62
-14.25
Up/Down Capture Ratio
1.18
1.00
Treynor Ratio
6.91
5.53
Sharpe Ratio
0.47
0.51
Sortino Ratio
0.71
0.77
Standard Deviation (%)
7.41
11.76

 

Past performance does not guarantee future results.

Diversification Analysis
(as of 7/31/2019)

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.1

1 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.

2 Active Share is calculated using the Morningstar Global Markets NR USD Index, a broad market index representing 97% of the global markets equity market capitalization.

3 Morningstar World Allocation category

Allocations
(as of 6/30/2019)

Asset Allocations

Asset
Percent
Fixed Income
44.34
Equity
37.76
Cash
17.91

Equity Allocations by Sector

Sector
Percent
Consumer Staples
29.09
Health Care
17.05
Industrials
16.22
Information Technology
15.56
Materials
7.86
Energy
5.87
Consumer Discretionary
4.26
Communication Services
4.08

Equity Allocations by Country

Country
Percent
United States
24.72
Japan
21.28
United Kingdom
19.14
France
10.46
Canada
3.93
Netherlands
3.42
Denmark
3.34
Switzerland
3.23
Norway
2.60
Ireland
1.92
Singapore
1.72
Finland
1.49
Italy
1.42
Sweden
1.33

Top 20 Equity Holdings
(as of 6/30/2019)

Company
% Weight in Portfolio
Unilever Plc
2.62%
L’Oreal
2.26%
Chevron Corp
2.22%
Cisco Systems
1.71%
Intel
1.49%
CAE
1.49%
DSM
1.29%
Carlsberg
1.26%
Smiths Group
1.20%
Diageo
1.17%
Dassault System
1.15%
SMC
1.14%
Croda International
1.09%
Chugai Pharmaceutical Co
1.08%
Steris
0.72%
Danaher
0.67%
Dairy Farm International Holdings
0.65%
Hoya Corp
0.63%
Sonova Holding
0.63%
Ametek
0.63%

PDF View Entire Portfolio Holdings

Fund Materials & Commentary

The results of our hedged portfolio
during the May market correction
download

Economic data has deteriorated.
On 3/8/2019, we took action

download

Q2 2019 discussion:
“In Pursuit of Alpha”
download

Quarterly analysis
and updatedownload

A complete guide to the KL Allocation Funddownload

Everything you need to know to invest in GAVIXdownload

An overview of our investment strategy & productsdownload

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.

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