Apex US Large Cap Value Fund¶
Fund Ticker: AULVX | CUSIP: 00412Q-40-4 | ISIN: US00412Q4044
Inception Date: January 12, 2010 | Fiscal Year End: December 31
Benchmark: Russell 1000 Value Index
Fund Manager: Thomas Brennan, CFA | Co-Manager: Sarah Kim, CFA, CPA
Total Net Assets: $3.51 billion (as of September 30, 2025)
Investment Objective¶
The Apex US Large Cap Value Fund seeks long-term capital appreciation and current income by investing in a diversified portfolio of U.S. large-capitalization companies that the investment team believes are trading below their intrinsic value. The Fund emphasizes companies with strong balance sheets, sustainable and growing dividend payments, and identifiable catalysts for value realization.
The Fund targets total return (appreciation plus dividends) exceeding the Russell 1000 Value Index by 100-200 basis points annualized over rolling 5-year periods, with lower downside volatility than the benchmark.
Investment Strategy¶
The Fund uses a multi-factor value investment process integrating quantitative screening with deep fundamental analysis. The investment team evaluates approximately 1,000 U.S. large-cap equities (market capitalization >$10 billion at time of purchase) through a proprietary composite value score incorporating:
Valuation Metrics: Price-to-normalized earnings (Shiller CAPE methodology), price-to-book value, price-to-free cash flow, and enterprise value-to-EBITDA. Candidates must score in the cheapest 40% of the large-cap universe on at least two of four metrics.
Quality Filters: Return on equity (ROE) above 10%, interest coverage ratio above 4.0x, net debt-to-EBITDA below 3.0x, and a minimum 5-year history of positive free cash flow generation. These filters exclude value traps with deteriorating fundamentals.
Catalyst Identification: Each investment thesis must include at least one identifiable catalyst for value realization within 12-24 months, such as management change, asset restructuring, margin expansion, capital return acceleration, or cyclical recovery.
Dividend Focus: The Fund targets a portfolio dividend yield of 1.5-2.5x the S&P 500 dividend yield. Currently, the portfolio's weighted average dividend yield is 2.94% versus 1.32% for the S&P 500 (as of September 30, 2025). The Fund favors companies with 10+ year track records of consecutive dividend increases.
Portfolio Construction: The Fund holds 50-70 positions with active share of 65-75% relative to the Russell 1000 Value Index. Position sizes range from 1.0% to 5.0% at cost, with a 7.0% maximum at market value. Sector weights may deviate up to +/-8 percentage points from the benchmark.
Risk Factors¶
Market Risk. The Fund is subject to the risk that the overall U.S. equity market will decline. Large-cap value stocks may experience periods of significant underperformance, particularly during momentum-driven or growth-led bull markets, as was observed from 2017-2020.
Value Style Risk. The Fund's value-oriented approach may underperform growth-oriented strategies for extended periods. Securities identified as undervalued may not realize their estimated intrinsic value if the market does not recognize the discrepancy or if the investment thesis proves incorrect. Value investing requires patience and discipline.
Dividend Risk. Companies may reduce or eliminate dividend payments due to deteriorating financial conditions, regulatory restrictions, or capital reallocation decisions. Dividend cuts typically result in both lost income and significant share price declines, compounding losses.
Sector Concentration Risk. Value strategies tend to be overweight in financial services, energy, and healthcare sectors, which together may comprise 50-65% of Fund assets. Sector-specific regulatory changes, commodity price movements, or competitive dynamics could disproportionately affect performance.
Interest Rate Sensitivity. High-dividend stocks often exhibit bond-like interest rate sensitivity. Rising rates can reduce the relative attractiveness of dividend-paying equities, leading to price declines even when underlying fundamentals remain sound. The Fund's yield-oriented portfolio may underperform in sharply rising rate environments.
Large-Cap Risk. While generally less volatile than small- and mid-cap securities, large-cap companies may offer lower growth potential and may be slower to adapt to changing market conditions. The Fund's large-cap focus may result in underperformance relative to small- and mid-cap indices during periods favoring smaller companies.
Concentration Risk. While the Fund holds 50-70 positions, the top 10 holdings typically represent 30-40% of net assets, creating meaningful single-stock risk.
Activist/Restructuring Risk. Certain holdings may be undergoing corporate restructuring, management transitions, or activist investor campaigns that are inherently uncertain in outcome and timing.
Fee Schedule¶
| Fee Component | Rate |
|---|---|
| Management Fee | 0.58% of average daily net assets |
| 12b-1 Distribution Fee | 0.25% (Class A shares) |
| Other Expenses | 0.08% |
| Total Annual Expense Ratio | 0.91% (Class A) / 0.66% (Institutional) |
| Front-End Sales Load (Class A) | 5.00% on purchases under $50,000 |
| Contingent Deferred Sales Charge | None (Class A); 1.00% within 12 months (Class C) |
| Redemption Fee | 1.50% on shares held fewer than 60 days |
Expense Example: An investor purchasing $10,000 in Class A shares would pay approximately $500 in front-end load plus $91 in annual expenses in the first year, totaling $591. Over 5 years, assuming 5% annual return, cumulative costs would approximate $1,283. Institutional class investors pay approximately $66 annually per $10,000 invested.
Fee Waivers: The Adviser has contractually agreed to cap total annual expenses at 0.88% (Class A) and 0.63% (Institutional) through December 31, 2026, excluding interest, taxes, brokerage commissions, acquired fund fees, and extraordinary expenses.
Historical Performance¶
Performance data as of September 30, 2025. Returns for periods greater than one year are annualized.
| Period | Fund (Class A, NAV) | Fund (Class A, w/ Load) | Russell 1000 Value | Morningstar Large Value Avg |
|---|---|---|---|---|
| 1 Year | 15.27% | 9.51% | 14.18% | 13.42% |
| 3 Year | 10.94% | 9.10% | 10.06% | 9.31% |
| 5 Year | 11.38% | 10.21% | 10.47% | 9.72% |
| 10 Year | 10.14% | 9.57% | 9.38% | 8.71% |
| Since Inception (1/12/2010) | 11.67% | 11.29% | 10.84% | 10.03% |
| Risk Metric (5-Year) | Fund | Russell 1000 Value |
|---|---|---|
| Standard Deviation | 15.17% | 15.84% |
| Sharpe Ratio | 0.63 | 0.55 |
| Beta | 0.93 | 1.00 |
| Max Drawdown | -24.38% | -26.72% |
| Upside Capture Ratio | 96.2% | 100.0% |
| Downside Capture Ratio | 87.4% | 100.0% |
Top 10 Holdings¶
As of September 30, 2025. Holdings are subject to change.
| Holding | Sector | Dividend Yield | % of Net Assets |
|---|---|---|---|
| JPMorgan Chase & Co. | Financials | 2.38% | 4.72% |
| Johnson & Johnson | Healthcare | 3.14% | 4.18% |
| Berkshire Hathaway Inc. Cl. B | Financials | 0.00% | 3.94% |
| ExxonMobil Corporation | Energy | 3.47% | 3.61% |
| Procter & Gamble Co. | Consumer Staples | 2.52% | 3.28% |
| Chevron Corporation | Energy | 4.12% | 3.07% |
| AbbVie Inc. | Healthcare | 3.68% | 2.89% |
| Bank of America Corp. | Financials | 2.71% | 2.74% |
| Pfizer Inc. | Healthcare | 5.83% | 2.56% |
| Cisco Systems Inc. | Information Technology | 2.94% | 2.41% |
| Top 10 Total | Wtd Avg: 3.01% | 33.40% |
Sector Allocation¶
| Sector | Fund Weight | Benchmark Weight |
|---|---|---|
| Financials | 23.4% | 22.1% |
| Healthcare | 17.8% | 16.4% |
| Energy | 11.2% | 8.9% |
| Consumer Staples | 9.6% | 8.2% |
| Industrials | 9.1% | 11.7% |
| Information Technology | 8.4% | 9.3% |
| Utilities | 6.8% | 6.1% |
| Communication Services | 5.2% | 5.8% |
| Consumer Discretionary | 4.3% | 5.9% |
| Real Estate | 2.8% | 4.1% |
| Materials | 1.4% | 1.5% |
Tax Implications¶
The Fund distributes all net investment income and realized capital gains to shareholders on an annual basis (income quarterly, capital gains in December).
Capital Gains Distributions: The Fund's low-turnover value approach generates modest taxable distributions. Portfolio turnover was 34% for the fiscal year ended December 31, 2024. In the most recent year, the Fund distributed $0.67 per share in long-term capital gains and $0.09 per share in short-term capital gains.
Tax Efficiency Rating: Morningstar Tax Cost Ratio of 0.94% (3-year), placing the Fund in the 38th percentile among large value peers (lower is better). The Fund's low turnover and emphasis on qualified dividends contribute to above-average tax efficiency.
Qualified Dividend Income: Approximately 93% of the Fund's ordinary income distributions qualified for the reduced QDI tax rate (currently 15% or 20% depending on taxpayer income) in the most recent fiscal year. The Fund's domestic focus and emphasis on established dividend-paying companies maximize QDI eligibility.
Dividend Income: The Fund's weighted average portfolio dividend yield of 2.94% generates meaningful taxable income. Tax-sensitive investors may wish to hold the Fund in tax-advantaged accounts to defer taxation of dividend and capital gains distributions.
Minimum Investment¶
| Share Class | Initial Investment | Additional Investment |
|---|---|---|
| Class A | $25,000 | $5,000 |
| Class C | $25,000 | $5,000 |
| Institutional | $500,000 | $25,000 |
| Retirement (IRA) | $10,000 | $2,500 |
Minimums may be waived for employer-sponsored retirement plans, fee-based advisory programs, and accounts maintained through financial intermediary omnibus platforms.
Redemption Terms¶
Shares may be redeemed on any NYSE business day. Orders received in good order before 4:00 PM ET are processed at that day's NAV.
Settlement: Redemption proceeds are paid within T+2 business days for wire transfers and electronic funds transfers. Check disbursements are mailed within T+3 business days.
Early Redemption Fee: A 1.50% redemption fee applies to shares held fewer than 60 days, payable to the Fund to offset transaction costs and protect long-term shareholders from dilution caused by short-term trading.
Large Redemptions: The Fund may take up to 7 calendar days to satisfy redemptions exceeding $250,000 or 1% of Fund net assets per SEC Rule 22c-1. In-kind redemptions may be offered for amounts exceeding $1,000,000.
Important Disclosures¶
Past performance does not guarantee future results. Investment return and principal value will fluctuate. Shares may be worth more or less than their original cost upon redemption. Current performance may be lower or higher than quoted. Visit www.apexfinancialpartners.com/performance for the most recent month-end returns.
Investors must read and consider the prospectus carefully before investing. The prospectus, dated January 28, 2025, provides detailed information regarding the Fund's investment objectives, strategies, risks, fees, and expenses. Copies may be obtained at www.apexfinancialpartners.com/prospectus or by calling 1-800-APEX-FND.
The Fund is registered under the Investment Company Act of 1940. Apex Financial Partners, the investment adviser, is registered with the SEC under the Investment Advisers Act of 1940. Registration does not imply endorsement by the SEC. Shares are distributed by Apex Fund Distributors, LLC, member FINRA/SIPC.
Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower expected growth rates. The index is unmanaged and does not include fees, expenses, or sales charges. It is not possible to invest directly in an index.
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