Morningstar has assigned a Gold Quantitative Rating™ and a 5-star Overall Morningstar Rating™ to the Queens Road Small Cap Value Fund and the Queens Road Value Fund. Ratings are as of 3/31/2020. Both funds have been managed by Bragg Financial Advisors since inception in 2002.
The Queens Road Small Cap Value Fund has outperformed the Russell 2000 Value Index by over 13% year-to-date through 3/31/2020. The Fund has beaten the Russell 2000 Value Index over the past 1-, 3-, 5-, 10-, and 15-year periods. Since inception in 2002, the Fund has produced a cumulative return of 267% vs. 166% for the index.
In addition, Morningstar ranks the Queens Road Small Cap Value Fund as the best-performing fund in the Morningstar Small Value Category for the 1-year and 3-year periods ending 3/31/2020. The Fund is ranked in the top 3% for the 5-year period and 15% for the 10-year period.
The Queens Road Value Fund has outperformed the S&P 500 Value Index by over 4% year-to-date through 3/31/2020. Since inception in 2002, the Fund has produced a cumulative return of 222% vs. 200% for the index.
In addition, Morningstar ranks the Queens Road Value Fund in the top 15% of the Morningstar Large Value Category for the 1-year period ending 3/31/2020. The Fund is ranked in the top 10% for the 3- and 5-year periods and top 29% for the 10-year period.
Steve Scruggs, CFA, is the Director of Research for Bragg Financial Advisors and serves as the portfolio manager of the Queens Road Funds. “We are very pleased to receive a Gold Quant Rating from Morningstar,” said Scruggs. “We have used the same value investment process since inception in 2002, and it is gratifying to see our results recognized by a well-respected financial institution like Morningstar.”
Benton Bragg, CFA, is the Chair of the Investment Committee for Bragg Financial Advisors and works alongside Scruggs as an analyst on the funds. “The Queens Road Small Cap Value Fund has out-performed the Russell 2000 Value Index over the past 15-plus years largely by not losing as much during down markets,” says Bragg. “Our focus on companies with strong balance sheets and low levels of debt has benefited our shareholders during the market decline due to the Covid-19 virus.”
The Queens Road Funds Investment Committee uses fundamental, bottom-up analysis to construct a diversified portfolio. The research process is built on the principles established by Benjamin Graham to identify companies that are trading at a discount to their intrinsic value. Companies must pass through a rigorous quantitative and qualitative analysis that considers balance sheet, cash flow, valuation, management’s tenure and ability to execute, and industry and sector. Steve Scruggs, CFA, has served as Portfolio Manager since inception in 2002. He is supported by analysts Benton Bragg, CFA, CFP®, Matt DeVries, CFA, Ben Rose, CFA, CFP®, AIF®, and Brian Bonewitz, CFA. Learn more at www.queensroadfunds.com.
The Queens Road Funds are managed by Bragg Financial Advisors, a boutique investment advisory firm located in Charlotte, North Carolina. The firm manages over $1.7 billion for institutions and private clients as of 12/31/19. The portfolio manager, fund analysts and trustees, and firm principals and associates are among the largest shareholders in the Queens Road Funds. Learn more at www.braggfinancial.com.
The Queens Road Funds are distributed by UMB Distribution Services, LLC. Queens Road Securities, LLC, an affiliate of Bragg Financial Advisors, Inc., served as the distributor of the Funds from inception through August 2020.
All performance information reflects past performance, is presented on a total return basis and reflects the reinvestment of distributions. Past performance is no guarantee of future results. Current performance may be higher or lower than performance quoted. Returns as of the recent month-end may be obtained by calling (888) 353‑0261.
Investment return and principal value will fluctuate so that shares may be worth more or less than their original cost when redeemed. There can be no assurance that the fund will meet any of its objectives.
Queens Road Small Cap Value Fund Gross Annual Operating Expenses: 1.18%
Queens Road Value Fund Gross Annual Operating Expenses: 0.95%
Gross annual operating expenses reflect the Fund’s gross total annual operating expenses, service fees, other expenses, and any applicable acquired fund fees and expenses. Net annual operating expenses reflect gross annual operating expenses exclusive of any applicable acquired fund fees and expenses. All expense information is reported as of the Fund’s most current prospectus. Acquired fund fees and expenses reflect the estimated amount of the fees and expenses incurred indirectly by any applicable Fund through its investments in mutual funds, hedge funds, private equity funds and other investment companies. From inception to 12/31/2004, the Fund’s manager and its affiliates voluntarily absorbed certain expenses of the fund and voluntarily waived its management fee. Had the Fund’s manager not done this, returns would have been lower during that period. The Fund’s manager and its affiliates do not intend to absorb any expenses or waive its management fee in the future.
Queens Road Small Cap Value Fund invests primarily in small-cap companies which may involve considerably more risk than investing in larger-cap stock. An investor should carefully consider a Fund’s investment objective, risks, fees, charges, and expenses before investing or sending money. This and other important information about the Queens Road Funds can be found in the Funds’ prospectus. To obtain a prospectus, and information about the performance of the Queens Road Funds, please call (888) 353-0261 or visit www.queensroadfunds.com. Please read the prospectus carefully before investing. Distributor: Queens Road Securities, LLC
The Russell 2000 Value Index is a subset of the Russell 2000 Index, which tracks the stocks of small domestic companies, based on total market capitalization. The Russell 2000 Value Index represents those stocks of the Russell 2000 with lower price-to-book ratios and lower relative forecasted growth rates. You cannot invest directly in these indexes.
The S&P 500/Citigroup Value Index along with its counterpart the S&P 500/Citigroup Growth Index were introduced in December 2005. Previously, these indices were known as the S&P 500/Barra Growth and Value Indices. These Indices are created by dividing the S&P 500 Index based upon seven different factors, four to determine value characteristics and three to determine growth characteristics. The companies are allocated to each index according to their growth or value characteristics, with about one-third being allocated to both the growth and value index. It is not possible to invest directly in the S&P 500/Citigroup Value Index. The S&P 500/Citigroup Growth Index and S&P 500/Citigroup Value Index are the exclusive property of Standards & Poors.
© 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The Morningstar Rating does not include any adjustment for sales loads. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10- year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.
The Queens Road Small Cap Value Fund was rated against the following numbers of Small Value funds over the following time periods: 407 funds in the last three years, 356 funds in the last five years, and 250 funds in the last ten years. With respect to these Small Value category funds, the Queens Road Small Cap Value Fund received a Morningstar Rating of 5-stars for the three-, five- and 10-year periods. Past performance is no guarantee of future results.
The Queens Road Value Fund was rated against the following numbers of Large Value funds over the following time periods: 1,107 funds in the last three years, 957 funds in the last five years, and 703 funds in the last ten years. With respect to these Large Value category funds, the Queens Road Value Fund received a Morningstar Rating of 5-stars, 5-stars, and 4-stars for the three-, five- and 10-year periods, respectively. Past performance is no guarantee of future results.
Morningstar Quantitative Rating™
Morningstar’s quantitative fund ratings consist of: (i) Morningstar Quantitative Rating (overall score), (ii) Quantitative Parent pillar, (iii) Quantitative People pillar, and (iv) Quantitative Process pillar (collectively the “Quantitative Fund Ratings”).The Quantitative Fund Ratings are calculated monthly and derived from the analyst-driven ratings of a fund’s peers as determined by statistical algorithms. Morningstar, Inc. calculates Quantitative Fund Ratings for funds when an analyst rating does not exist as part of its qualitative coverage.
Morningstar Quantitative Rating: Intended to be comparable to Morningstar’s Analyst Ratings for open end funds and ETFs, which is the summary expression of Morningstar’s forward-looking analysis of a fund. The Morningstar Analyst Rating is based on the analyst’s conviction in the fund’s ability to outperform its peer group and/or relevant benchmark on a risk-adjusted basis over a full market cycle of at least 5 years. Ratings are assigned on a five-tier scale with three positive ratings of Gold, Silver, and Bronze, a Neutral rating, and a Negative rating. Morningstar calculates the Morningstar Quantitative Rating using a statistical model derived from the Morningstar Analyst Rating our fund analysts assign to open-end funds and ETFs. Please go to https://shareholders.morningstar.com/investor-relations/governance/Compliance–Disclosure/default.aspx for information about Morningstar Analyst Rating Morningstar’s fund analysts assign to funds.
Quantitative Parent pillar: Intended to be comparable to Morningstar’s Parent pillar scores, which provides Morningstar’s analyst opinion on the stewardship quality of a firm. Morningstar calculates the Quantitative Parent pillar using an algorithm designed to predict the Parent Pillar score our fund analysts would assign to the fund. The quantitative pillar rating is expressed in both a rating and a numerical value as High (5), Above Average (4), Average (3), Below Average (2), Low (1).
Quantitative People pillar: Intended to be comparable to Morningstar’s People pillar scores, which provides Morningstar’s analyst opinion on the fund manager’s talent, tenure, and resources. Morningstar calculates the Quantitative People pillar using an algorithm designed to predict the People pillar score our fund analysts would assign to the fund. The quantitative pillar rating is expressed in both a rating and a numerical value as High (5), Above Average (4), Average (3), Below Average (2), Low (1).
Quantitative Process Pillar: Intended to be comparable to Morningstar’s Process pillar scores, which provides Morningstar’s analyst opinion on the fund’s strategy and whether the management has a competitive advantage enabling it to execute the process and consistently over time. Morningstar calculates the Quantitative Process pillar using an algorithm designed to predict the Process pillar score our fund analysts would assign to the fund. The quantitative pillar rating is expressed in both a rating and a numerical value as High (5), Above Average (4), Average (3), Below Average (2), and Low (1).
Morningstar Quantitative Ratings have not been made available to the issuer of the security prior to publication. Risk Warning The quantitative fund ratings are not statements of fact. Morningstar does not guarantee the completeness or accuracy of the assumptions or models used in determining the quantitative fund ratings. In addition, there is the risk that the return target will not be met due to such things as unforeseen changes in changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rate, and tax rate. For investments in foreign markets there are further risks, generally based on exchange rate changes or changes in political and social conditions. A change in the fundamental factors underlying the quantitative fund ratings can mean that the recommendation is subsequently no longer accurate.
For more information about Morningstar’s quantitative methodology, please visit https://shareholders.morningstar.com/investor-relations/governance/Compliance–Disclosure/default.aspx.