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Investment Opportunity

This fund offers access to high quality, emerging market small-cap companies. The investment strategy emphasizes identifying companies with a competitive advantage, strong management, and low financial risk that are able to grow over market cycles, despite their discounted valuations. Over full market cycles, the investment style is designed with the dual objectives of capturing part of the up market cycles and protecting principal in down market cycles.

Fund Risks

Equity Securities: The market price of equity securities may be adversely affected by financial market, industry, or issuer-specific events. Focus on a particular style or on small or medium-sized companies may enhance that risk.

Foreign & Emerging Markets: Investing internationally, especially in emerging markets, involves additional risks such as currency, political, accounting, economic, and market risk.

Industry/Sector Concentration: A fund that focuses its investments in a particular industry or sector will be more sensitive to conditions that affect that industry or sector than a non-concentrated fund.

Limited Number of Investments: Because the fund has a limited number of securities, it may be more susceptible to factors adversely affecting its securities than a less concentrated fund.

Prospectus: For additional information on risks, please see the fund's prospectus.

Key Stats (as of 4/28/2017)

Inception: 12/17/2013
Ticker: VAESX
CUSIP: 92828W627
Fund No: 2423
Net Assets by Fund: $6,890,754
Net Assets by Class: $648,786

Management Team

Craig Thrasher, CFA
Craig Thrasher, CFA Kayne Anderson Rudnick Investment Management, LLC

Industry start date: 2003

Start date with Fund: 2013

Kayne Anderson Rudnick Investment Management, LLC

Kayne Anderson Rudnick believes that superior risk-adjusted returns may be achieved through investment in high-quality companies with market dominance, excellent management, financial strength, and consistent growth, purchased at reasonable prices.

Morningstar Ratings

Overall Rating

As of 3/31/2017 the Fund was rated 4 stars out of 629 funds within the Diversified Emerging Mkts category for the 3-year period.

Strong ratings are not indicative of positive fund performance.

Average Annual Total Returns

Monthly Performance (%) (as of 4/28/2017)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 11.03 16.00 24.92 3.35 NA NA 3.39
POP 4.64 9.33 17.73 1.33 NA NA 1.59
Quarterly Performance (%) (as of 3/31/2017)
  3 Mon. YTD 1YR 3YR 5YR 10YR Since Inception
NAV 12.86 12.86 25.70 3.03 NA NA 2.62
POP 6.37 6.37 18.48 1.02 NA NA 0.79
Index 13.02 13.02 14.49 1.66 2.87 3.92 NA

Performance data quoted represents past results. Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. Investment return and principal value will fluctuate, so your shares, when redeemed, may be worth more or less than their original cost.

Sales Charge and Expenses

POP (Public Offering Price) performance reflects the deduction of the maximum sales charge of 5.75%. A contingent deferred sales charge of 1% may be imposed on certain redemptions within 18 months on purchases on which a finder’s fee has been paid.

The fund class gross expense ratio is 3.76%. The net expense ratio is 1.85%, which reflects a contractual expense reimbursement in effect through 04/30/2018.

Index: MSCI Emerging Markets Small Cap Index (net)
The MSCI Emerging Markets Small Cap Index (net) is a free float-adjusted market capitalization-weighted index designed to measure small cap equity market performance in the global emerging markets. The index is calculated on a total return basis with net dividends reinvested. The index is unmanaged, its returns do not reflect any fees, expenses, or sales charges, and is not available for direct investment.

Risk Statistics3 (as of 3/31/2017)

  Fund Index
R2 0.87 1.00
Beta 0.90 1.00
Alpha 1.53 0.00
Std Dev 14.04 14.62
Index: MSCI Emerging Markets Small Cap Index (net)

Daily Price (as of 4/28/2017)

NAV Change ($)
10.37 0.01
POP Change ($)
11.00 0.01

Top Holdings (% Fund)
(as of 3/31/2017)

PT BFI Finance Indonesia Tbk 3.92
Pico Far East Holdings Limited 3.89
Yung Chi Paint & Varnish Mfg Co., Ltd. 3.87
Autohome, Inc. Sponsored ADR Class A 3.45
Credit Analysis & Research Ltd. 3.29
ARA Asset Management Limited 3.21
Lumax International Corp. 3.08
Taiwan Secom Co., Ltd. 3.06
AVI Limited Class Y 3.04
Oldtown Bhd. 3.03

Top Countries (% Invested Assets)
(as of 3/31/2017)

Taiwan 13.48
Korea (south) 10.36
South Africa 9.57
Thailand 7.65
Indonesia 7.24

Top Sectors (% Equity)
(as of 3/31/2017)

Consumer Staples 25.79
Industrials 19.87
Financials 16.86
Materials 14.12
Consumer Discretionary 11.06

Characteristics4
(as of 3/31/2017)

Avg Weighted Market Cap (bn) $1.26
Median Market Cap (bn) $0.48
Trailing P/E 14.06x
Price-to-Cash Flow 15.15
Price-to-Book Value 3.12
3-Year EPS Growth Rate 3.58

Morningstar Ratings

Overall Rating

As of 3/31/2017 the Fund was rated 4 stars out of 629 funds within the Diversified Emerging Mkts category for the 3-year period.

Strong ratings are not indicative of positive fund performance.