Small Cap Value Fund Third Quarter 2016

We outperformed our index in the quarter and the 9 month period, as some of the headwinds buffeting our deep value style over the last 5 years partially unwound. Bond proxies and low volatility stocks were weak performers in the quarter, after being bid up for several years primarily due to the bond market bubble. Radical global monetary experiments have caused over ten trillion dollars worth of bonds to have negative nominal interest rates. Large negative real rates are highly unlikely to last longer term. While we are not expecting an imminent bond market reversal, it will be positive for our style when it occurs.