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US Small Mid Cap Opportunistic Value Equity
Second Quarter 2018Quarterly Review
Sector Weights (%)
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. Data as of 6/30/18. No investment strategy or risk management technique canguarantee returns or eliminate risk in any market environment. Please refer to the back page for other important disclosures. CFA® and Chartered Financial Analyst® areregistered trademarks owned by CFA Institute. Variation in totals due to rounding. The Boston Company is a brand of BNY Mellon Asset Management North AmericaCorporation.
Composite (gross-of-fees)
Composite (net-of-fees)
Russell 2500 Index*
Russell 2000 Index*
Key FactsAssets Under Management
$2.8 billion
Benchmark*Russell 2500 Index
InceptionOctober 1996
Investment VehiclesSeparate Account,
Commingled Vehicles
Key StatsTarget Alpha: 4-6%
Targeted Predicted
Tracking Error: 4-8%
Typical Holdings: 50-80
Normalized Turnover: 60-90%*On 1/1/10 the composite’s benchmark changed
from the Russell 2000 Index to the Russell 2500
Index.
TeamDavid A. Daglio Jr., CFA, leads
the portfolio team of investment
professionals.
ObjectiveThe US Small Mid Cap
Opportunistic Value Equity
strategy seeks to outperform the
Russell 2500 Index over a long-
term investment horizon.
Overview Strategy seeks to identify
companies priced well below
intrinsic value. Proprietary
intrinsic value calculation utilizes
free cash flow, market value of
real and intangible assets and
accounts for all existing
liabilities.
Company specific mid-cycle
estimates drive fundamental
opinions. Unrecognized growth
of free cash flow and improving
levels of return on invested
capital over the next one to three
years must be present.
Capital allocation is utilized to
enhance return potential. Highly
active investment stance
implemented if valuation,
idiosyncratic fundamentals,
industry dynamics and macro
environment align.
Annual Returns as of December 31 (%)
2017 2016 2015 2014 2013 2012 2011 2010 2009 2008
25.3 20.8 -5.1 5.7 45.3 19.5 -7.2 33.2 67.2 -34.5
24.2 19.7 -5.9 4.8 44.0 18.4 -8.0 32.1 65.6 -35.2
16.8 17.6 -2.9 7.1 36.8 17.9 -2.5 26.7 34.4 -36.8
14.7 21.3 -4.4 4.9 38.8 16.4 -4.2 26.9 27.2 -33.8
Performance as of June 30, 2018 (%)
Quarter YTD 1 Yr 3 Yrs 5 Yrs 10 Yrs
4.3 3.1 18.3 11.3 13.4 15.0
4.1 2.6 17.2 10.3 12.4 13.9
5.7 5.5 16.2 10.3 12.3 10.7
7.8 7.7 17.6 11.0 12.5 10.6
Characteristics
Portfolio Benchmark
TherapeuticsMD, Inc. Health Care 3.1
Ciena Corporation Information Technology 3.0
Acxiom Corporation Information Technology 2.8
Jefferies Financial Group Inc. Financials 2.5
OneMain Holdings, Inc. Financials 2.4
Total 13.8
11.4
0.7
10.1
17.7
14.1
12.4
23.1
10.5
0.0 0.00.0
13.4
2.8
4.9
15.9
12.6
15.016.0
5.7
9.6
0.5
3.5
0.0
5.0
10.0
15.0
20.0
25.0
ConsumerDiscretionary
ConsumerStaples
Energy Financials Health Care Industrials InformationTechnology
Materials Real Estate TelecomServices
Utilities
Portfolio Benchmark
x x
x x
% %
x x
x x
x x
B B
Price/Earnings Ratio 15.4 19.3
Price/Earnings Ratio (FY2) 12.3 15.3
IBES Long Term Growth Rate 16.6 16.9
Price/Sales Ratio 1.3 1.4
Price/Book Value 2.2 2.4
Hist. 5 Yr. Avg. Price/Book Value 2.5 2.4
Wtd. Avg. Market Cap ($) 6.4 4.8
Five Largest Holdings (%)
Company Sector Portfolio
Returns greater than one year are annualized. Returns are shown in U.S. dollars.
Representative Institutional Account – where applicable, excludes cash, ETFs and futures.
US Small Mid Cap Opportunistic Value Equity
Disclosure
Definition of the FirmBNY Mellon Asset Management North America Corporation (“BNY Mellon AMNA”) is a registered investment advisor and subsidiary of The Bank of New YorkMellon Corporation ("BNY Mellon"). The Firm also includes assets managed by BNY Mellon AMNA personnel acting as dual officers of affiliated companies. Priorto February 1, 2018, the firm was defined as Mellon Capital Management Corporation ("Mellon Capital”) a subsidiary of The Bank of New York MellonCorporation ("BNY Mellon"). The Firm was redefined on February 1, 2018 following a merger with affiliated firms The Boston Company Asset Management, LLC(“TBCAM”) and Standish Mellon Asset Management Company LLC ("Standish") which also were also registered investment advisors and subsidiaries of BNYMellon.
Composite DescriptionThe US Small Mid Cap Opportunistic Value Equity strategy primarily invests in small- and mid-cap U.S. value companies. The strategy can invest in AmericanDepositary Receipts.
BenchmarkEffective January 1, 2010, the benchmark is the Russell 2500 Index and was previously the Russell 2000 Index. The Russell 2500 Index measures the performanceof the small- to mid-cap segment of the U.S. equity market.
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity market.
Other InformationPerformance presented for measurement periods prior to February 1, 2018 represents the portable performance results of a prior affiliated firm which havebeen linked to the on-going track record for this composite. There may be material differences between the representative account and other accountsmanaged with the same strategy. Because of these differences, the information based on the representative account should not necessarily be relied upon. Itshould not be assumed that securities identified were or will be profitable or that decisions we make in the future will be profitable. Certain securities may notremain in the portfolio at the time that you receive this report. Where applicable, AUM includes discretionary and non-discretionary assets and assets managedby investment personnel acting in their capacity as officers of affiliated entities.
BNY Mellon AMNA claims compliance with the Global Investment Performance Standards (GIPS®). To receive a list of composite descriptions of BNY MellonAMNA composites and / or a presentation that complies with the GIPS standards, contact [email protected].
The Boston Company is a brand of BNY Mellon Asset Management North America Corporation.
Contact
For more information about our strategies, please contact:
U.S. InvestorsDaniel J. McCormackExecutive Vice President,Head of U.S. Institutional Sales(617) [email protected]
Non-U.S. InvestorsPatrick St. A. Lyn, CFAManaging Director,Head of Non-U.S. Sales [email protected]
Strategic Advisory Group* Carl O’ConnellManaging Director,Head of BNY Mellon Strategic Advisory Group [email protected]
www.thebostoncompany.com
*Employee of affiliated entity