iMGP Small Company Fund

A distinct edge in understanding how company leaders drive change to create value.

Co-portfolio managers Mark Dickherber and Shaun Nicholson are small-cap investors who seek to identify companies that have the potential for significant improvement in return on invested capital (ROIC).

The idea being that as ROIC improves, each dollar invested in the business earns an incrementally higher return. Importantly, Dickherber and Nicholson disaggregate a company’s ROIC down to the business segment level to understand the drivers (and detractors) of a company’s profitability. Armed with segment-level return data they seek to identify companies with low embedded expectations that have company-specific returns-improving catalysts. (They do not buy stocks simply because they are cheap.)

Dickherber and Nicholson require that management is ROIC-focused, financially incentivized to improve returns through appropriate capital allocation, and able to articulate an appropriate returns-based strategy to improve profitability. They track management’s progress via quarterly financials and quarterly management contact. As management demonstrates a commitment and ability to appropriately improve returns, Dickherber and Nicholson will build the position.

The co-managers pride themselves on identifying the building blocks of improved (and diminishing) profitability before it is recognized by the market. As improved returns are reflected in the stock price, portfolio holdings are trimmed, and ultimately sold when they reach the team’s estimate of fair value.

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The fund’s investment objectives, risks, charges, and expenses must be considered carefully before investing. The statutory and summary prospectus contains this and other important information about the investment company, and it may be viewed here or by calling 1-800-960-0188. Read it carefully before investing.

Mutual fund investing involves risk. Principal loss is possible.

*Although the managers actively manage risk to reduce portfolio volatility, there is no guarantee that the fund will always maintain its targeted risk level, especially over shorter time periods and loss of principal is possible. The performance goals are not guaranteed, are subject to change and should not be considered a predictor of investment return. All investments involve the risk of loss and no measure of performance is guaranteed. The fund aims to deliver its return over a full market cycle, which is likely to include periods of both up and down markets.

Though not an international fund, the fund may invest in foreign securities. Investing in foreign securities exposes investors to economic, political and market risks, and fluctuations in foreign currencies. Investments in debt securities typically decrease when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in mortgage-backed securities include additional risks that investor should be aware of including credit risk, prepayment risk, possible illiquidity, and default, as well as increased susceptibility to adverse economic developments. Investments in lower-rated and non-rated securities present a greater risk of loss to principal and interest than higher-rated securities. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management, and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. The fund may invest in master limited partnership units. Investing in MLP units may expose investors to additional liability and tax risks. Multi-investment management styles may lead to higher transaction expenses compared to single investment management styles. Outcomes depend on the skill of the sub-advisors and advisor and the allocation of assets amongst them. The fund may make short sales of securities, which involves the risk that losses may exceed the original amount invested. Merger arbitrage investments risk loss if a proposed reorganization in which the fund invests is renegotiated or terminated.

Diversification does not assure a profit nor protect against loss in a declining market.

Leverage may cause the effect of an increase or decrease in the value of the portfolio securities to be magnified and the fund to be more volatile than if leverage was not used.

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The iMGP Funds are distributed by ALPS Distributors, Inc.