Small Cap Value Fund Second Quarter 2017

We underperformed our index as a 9% decline in oil prices drove down prices of the Fund’s energy holdings. The energy impact was almost all due to our overweighting as our stock selection was benign. We trimmed our technology holdings in the quarter as they approached our price targets. Our style was not in favor versus small cap growth in the quarter as cheap valuation characteristics were a headwind. Bond surrogates outperformed as long term interest rates fell despite solid economic growth. This underweighted cohort sells at an 800 basis point Price to Earnings premium to non bond surrogate stocks despite lower earnings growth rates.