UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-07959
Advisors Series Trust
(Exact name of registrant as specified in charter)
(Exact name of registrant as specified in charter)
615 East Michigan Street
Milwaukee, WI 53202
(Address of principal executive offices) (Zip code)
(Address of principal executive offices) (Zip code)
Jeffrey T. Rauman, President/Chief Executive Officer
Advisors Series Trust
c/o U.S. Bancorp Fund Services, LLC
777 East Wisconsin Avenue, 5th Floor
Milwaukee, WI 53202
(Name and address of agent for service)
(Name and address of agent for service)
(626) 914-7363
Registrant's telephone number, including area code
Date of fiscal year end: February 28, 2023
Date of reporting period: February 28, 2023
Item 1. Reports to Stockholders.
(a)
Pzena Funds
Annual Report
FEBRUARY 28, 2023
PZENA MID CAP VALUE FUND
Investor Class PZVMX
Institutional Class PZIMX
PZENA EMERGING MARKETS VALUE FUND
Investor Class PZVEX
Institutional Class PZIEX
PZENA SMALL CAP VALUE FUND
Investor Class PZVSX
Institutional Class PZISX
PZENA INTERNATIONAL SMALL CAP VALUE FUND
Investor Class PZVIX
Institutional Class PZIIX
PZENA INTERNATIONAL VALUE FUND
Investor Class PZVNX
Institutional Class PZINX
1-844-PZN-1996 (1-844-796-1996) • www.pzenafunds.com
Table of Contents
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Letter to Shareholders
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1
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Pzena Funds Commentary
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Pzena Mid Cap Value Fund
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2
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Pzena Emerging Markets Value Fund
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5
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Pzena Small Cap Value Fund
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8
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Pzena International Small Cap Value Fund
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11
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Pzena International Value Fund
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14
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Pzena Mid Cap Value Fund
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Portfolio Allocation
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17
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Schedule of Investments
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18
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Pzena Emerging Markets Value Fund
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Portfolio Allocation
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19
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Schedule of Investments
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20
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Portfolio Diversification
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22
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Pzena Small Cap Value Fund
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Portfolio Allocation
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23
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Schedule of Investments
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24
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Pzena International Small Cap Value Fund
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Portfolio Allocation
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26
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Schedule of Investments
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27
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Portfolio Diversification
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29
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Pzena International Value Fund
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Portfolio Allocation
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30
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Schedule of Investments
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31
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Portfolio Diversification
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33
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Statements of Assets and Liabilities
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34
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Statements of Operations
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36
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Statements of Changes in Net Assets
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Pzena Mid Cap Value Fund
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38
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Pzena Emerging Markets Value Fund
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39
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Pzena Small Cap Value Fund
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40
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Pzena International Small Cap Value Fund
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41
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Pzena International Value Fund
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42
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Financial Highlights
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Pzena Mid Cap Value Fund
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43
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Pzena Emerging Markets Value Fund
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45
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Pzena Small Cap Value Fund
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47
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Pzena International Small Cap Value Fund
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49
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Pzena International Value Fund
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51
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Notes to Financial Statements
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53
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Report of Independent Registered Public Accounting Firm
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64
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Expense Example
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65
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Information about Trustees and Officers
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67
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Approval of Investment Advisory Agreement
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70
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Notice to Shareholders
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73
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Liquidity Risk Management Program
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74
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Privacy Notice
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75
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Dear Shareholder:
Global markets whipsawed early in the period, vacillating between positive and negative developments on the war in Ukraine, as investors grappled with the economic implications of Western sanctions on
Russia. Overall weakness persisted throughout early 2022, driven by continued concerns over Chinese regulation – particularly, the potential delisting of depository receipts – exacerbated by the war in Europe.
With both energy and food costs spiking, inflation and macroeconomic weakness heightened fears of a potentially painful global recession. At the same time, central banks – the Fed in particular –
started to project a hawkish tone, and interest rates rose accordingly, pressuring equity valuations. Value started to outperform growth around this time, as the eventuality of material policy rate increases and consequentially, higher global yields,
impacted longer duration growth stocks the most. Rising input costs also had a more pronounced effect on domestic small caps, which underperformed their large cap peers.
After a challenging summer, equity markets reversed course towards the end of the year, with Europe leading the pack. Investors reacted positively to tentative signs of easing inflationary pressures,
helped by a warmer start to the winter in Europe. The Bank of Japan’s policy adjustment reversing decades of negative interest rates, and China’s exit from the zero-COVID regime also boosted sentiment. Given investors’ renewed appetite for risk, the
cyclical corners of the market performed the best. The dollar’s abrupt shift after months of sustained strength also provided a tailwind for U.S. dollar-based investors. Amidst this backdrop, value stocks across geographies outperformed their growth
peers and broad market indices, but still closed negative for the year due to persistent recession fears.
Even after a sustained period of outperformance, global value stocks are still exceptionally cheap, particularly relative to their growth counterparts, and underlying metrics suggest value has much more
room to run. The valuation gap between global value and growth stocks has narrowed, but the absolute level remains enticing. To put this into context, the MSCI All Country World Value Index is trading at a price-to-forward earnings discount of 47% to
the Growth Index, significantly larger than the average monthly discount of 30% over the past ~20 years. On a price-to-book basis, the discount is even larger at 66%. What’s more, the current pro-value cycle (which we define as value outperforming
the market by more than 15% for at least one year) that began in October 2020 is less than half the duration of the six previous cycles, which each lasted about 5 years on average. Although there’s no hard and fast rule for how long a value cycle
will persist, considering both valuation and duration, the starting point today for our value strategies is certainly compelling.
Please take a few minutes to read the Fund commentaries on the following pages, where our portfolio management teams review investment decisions and current positioning, providing insight into recent
performance.
If you have questions about your Pzena Fund’s portfolio, please get in touch with your advisor or a member of our team of registered representatives.
We thank you for investing with us. As always, we are committed to our philosophy of value investing with a long-term outlook.
Best regards,
Pzena Investment Management, LLC
Past performance does not guarantee future results. Index performance is not indicative of fund performance. One cannot invest directly in an index.
Mutual fund investing involves risk. Principal loss is possible.
Must be preceded or accompanied by a prospectus.
1
Pzena Mid Cap Value Fund
Commentary
February 2023
CHANGE IN VALUE OF $1,000,000 INVESTMENT
Average Annual Total Returns for the Fiscal Year Ended February 28, 2023.
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Since
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||||||
|
Three
|
Six
|
One
|
Three
|
Five
|
Inception
|
|
|
Months(1)
|
Months(1)
|
Year(1)
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Years
|
Years
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(3/31/2014)
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|
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Pzena Mid Cap Value Fund – Investor Class (PZVMX)
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4.29%
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13.59%
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1.96%
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19.25%
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8.05%
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8.63%
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Pzena Mid Cap Value Fund – Institutional Class (PZIMX)
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4.34%
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13.81%
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2.37%
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19.72%
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8.45%
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8.99%
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Russell Midcap® Value Index
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-0.70%
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4.34%
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-3.42%
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11.96%
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7.27%
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7.79%
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(1)
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Not annualized.
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Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an
investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. The graph and table do not reflect the deduction of taxes that a shareholder may
pay on Fund distributions or the redemption of Fund shares. Performance data current to the most recent month-end may be obtained by calling 844.PZN.1996 (844.796.1996).
PZVMX Expense Ratio – Gross: 1.32%
PZVMX Expense Ratio – Net: 1.25%*
PZIMX Expense Ratio – Gross: 0.97%
PZIMX Expense Ratio – Net: 0.90%*
Expense ratios shown are as of the Fund’s prospectus dated June 28, 2022.
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*
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Pzena Investment Management, LLC, the Fund’s investment adviser, has contractually agreed to waive a portion or all of its management fees and pay Fund expenses through at least June 28, 2023.
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Stocks started weakening in the first quarter of 2022, as Russia’s invasion of Ukraine combined with rising interest rates drove down sentiment. Equities declined more sharply in the second quarter,
battered by high inflation, tightening U.S. monetary policy and ever-rising recession fears. The declines were broad-based, with stocks across market caps and styles registering meaningful drops in valuations, but value outperformed growth in the
face of higher interest rates. Markets sharply inflected and then rallied in the fourth quarter due to a number of factors, including the moderation of various inflation indicators, a warmer start to the winter in Europe, and China ending its strict
zero-COVID policy. Amidst this backdrop, U.S. value stocks materially outperformed both growth and the broad market, but still closed negative for the period. The Fund rose slightly during the fiscal year and outperformed the Russell Midcap Value
Index by a significant margin.
Energy and industrials were the two main contributing sectors. Terex, manufacturer of aerial work platforms, reported a string of earnings beats driven by higher volumes and strong pricing.
2
Pzena Mid Cap Value Fund
Commentary (Continued)
February 2023
The backlog for aerial work platforms continued to grow throughout the year and the company provided 2023 guidance slightly ahead of consensus. Life and health reinsurer Reinsurance Group of America
(RGA) reported strong 2Q and 3Q earnings reports. The company benefitted from lower-than-expected COVID and non-COVID mortality rates. RGA is uniquely levered to mortality risk among the major reinsurers and had suffered disproportionately from
COVID-19 as a result. There is some optimism that COVID mortality rates may remain low moving forward. Pharmaceutical distributor McKesson was a standout performer as investors preferred defensive names including ones in the health care sector amid
growing concerns over slower earnings growth and a potential recession. The company has been able to manage inflationary pressures within the business and pass-through rising fuel costs to customers. Furthermore, the stock moved higher in April on
news that it completed the divestiture of its UK business, as the business had been seen as a drag on earnings. In addition, management raised full year guidance in August, driven by the extension of their vaccine distribution contracts with the U.S.
government.
Only consumer discretionary and information technology holdings detracted as a group from absolute performance. Window and door manufacturer JELD-WEN fell amid the difficult macro environment and a
slowdown in new housing starts. The CEO’s departure also dampened sentiment. We continue to believe JELD-WEN can maintain strong pricing and increase profitability in the housing market with their strong position in consolidated markets once they get
past manufacturing bottlenecks. Consumer products company Newell Brands fell during the past year. Newell’s customers, which include big-box retailers, continue to manage down their own inventory amid softening demand, effectively reducing orders for
Newell’s products. The company also continues to deal with foreign currency and inflation headwinds. Regional bank KeyCorp declined as economic uncertainty weighed on the bank and its peers. The bank reported lower than expected earnings after 1Q and
4Q driven by higher provisioning to account for uncertainty, though this was partially offset by increasing net interest income given rising rates.
We initiated a position in Magna International, the largest auto supplier in North America and fourth largest globally. Magna has a well-diversified product portfolio that touches nearly every aspect of
the vehicle, with market-leading positions in body & chassis, exteriors, mechatronics, and complete vehicle manufacturing. Magna is well-positioned for both the transition to electric vehicles—80% of its sales are powertrain agnostic— and the
transition to autonomous driving with a leading position in advanced driver assistance systems. The stock weakened in 2022, as the semiconductor shortage led to global light vehicle production (LVP) shortfalls that, in turn, lowered Magna’s sales.
Operating margins also contracted, as unpredictable production schedules caused labor and other operational inefficiencies. Going forward, we expect global LVP to progressively improve as the semiconductor shortage eases, while pent-up demand could
possibly offset any recession-induced decline in auto spend.
We also added Axalta Coating Systems, a leading supplier of coating products that operates in three main businesses – Refinish, for auto collision and repair, Mobility, for new vehicles, and Industrial,
for a broad range of specialty coatings used across several end markets. The Refinish business dominates in the premium segment, with services and products that drive customer efficiency. There are opportunities to expand in the economy segment as
well as in emerging markets. The market is concerned about near-term earnings pain from reduced traffic (and, consequentially, accidents) due to COVID restrictions, lower new car volumes stemming from the chip shortage, and elevated raw material
prices. We expect these headwinds to abate over time, and for growth to reaccelerate at this high-return industrial franchise.
Another new position is Globe Life, which sells simple, low-face life and supplemental health policies to lower- and middle-income customers. Their captive sales force gives them a differentiated
position in the market with more price flexibility than peers, driving higher returns and enabling management to return significant capital to shareholders through buybacks. The company should benefit from higher rates going forward as new money
yields finally surpass roll-off yields.
Other additions to the portfolio were Fidelity National Financial, Fortune Brands Innovations and MasterBrand.
We exited Baker Hughes (oil servicer), McKesson (pharma distributor), Cenovus Energy (oil sands driller), TechnipFMC (oil servicer), Hewlett Packard Enterprise (enterprise hardware and software) and
Ryder System (transport company), on strength. We also exited NRG (utility) as the range of outcomes widened following a recent large acquisition outside of its core industry, thereby increasing leverage and execution risk.
While the macroeconomic environment has not become any clearer this year, it bears remembering that the seeds of market rallies are planted during recession-driven selloffs. Historically, stocks perform
particularly well in the five-year period following the start of a recession, and value tends to materially outperform. We believe today’s backdrop is quite positive for cheap stocks, which remain one of the few options offering positive real
earnings yields. Given their shorter duration cash flows, cheap stocks also tend to perform well in both inflationary and rising rate environments, and the valuation spread between their growth counterparts remains exceptionally wide. The portfolio
is heavily skewed towards financials, consumer discretionary, and industrials, as absolute valuations remain compelling due to persistent recession fears.
3
Pzena Mid Cap Value Fund
Commentary (Continued)
February 2023
Mutual fund investing involves risk. Principal loss is possible. Investments in mid-cap companies involve additional risks such as limited liquidity and greater volatility than larger
companies. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. The Fund may have emphasis on a specific sector which could adversely affect a fund to a greater
extent than if its emphasis was less. The Fund emphasizes a “value” style of investing, which targets undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that valuations never improve or
that returns on “value” securities may not move in tandem with the returns on other styles of investing or the stock market in general.
The Pzena Funds are distributed by Quasar Distributors, LLC.
Fund holdings, exposures and characteristics are as of the date shown and are subject to change at any time. Please refer to the Schedule of Investments for more information. The opinions expressed in
this letter are those of the Fund manager, are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security.
The Russell Midcap® Value Index is an unmanaged index that measures the performance of those Russell Mid Cap® companies with lower price-to-book ratios and lower forecasted growth rates. The index cannot be invested in directly.
4
Pzena Emerging Markets Value Fund
Commentary
February 2023
CHANGE IN VALUE OF $1,000,000 INVESTMENT
Average Annual Total Returns for the Fiscal Year Ended February 28, 2023.
|
Since
|
||||||
|
Three
|
Six
|
One
|
Three
|
Five
|
Inception
|
|
|
Months(1)
|
Months(1)
|
Year(1)
|
Years
|
Years
|
(3/31/2014)
|
|
|
Pzena Emerging Markets Value Fund –
|
||||||
|
Investor Class (PZVEX)
|
2.63%
|
5.14%
|
-3.39%
|
9.00%
|
1.22%
|
2.71%
|
|
Pzena Emerging Markets Value Fund –
|
||||||
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Institutional Class (PZIEX)
|
2.72%
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5.31%
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-3.11%
|
9.35%
|
1.57%
|
3.03%
|
|
MSCI Emerging Markets Index
|
-0.52%
|
-2.29%
|
-15.28%
|
0.97%
|
-1.87%
|
2.07%
|
|
MSCI Emerging Markets Value Index
|
-0.12%
|
-0.07%
|
-12.55%
|
2.37%
|
-2.02%
|
0.92%
|
|
(1)
|
Not annualized.
|
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an
investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. The graph and table do not reflect the deduction of taxes that a shareholder may
pay on Fund distributions or the redemption of Fund shares. Performance data current to the most recent month-end may be obtained by calling 844.PZN.1996 (844.796.1996).
PZVEX Expense Ratio – Gross: 1.50%
PZVEX Expense Ratio – Net: 1.43%*
PZIEX Expense Ratio – Gross: 1.15%
PZIEX Expense Ratio – Net: 1.08%*
Expense ratios shown are as of the Fund’s prospectus dated June 28, 2022.
|
*
|
Pzena Investment Management, LLC, the Fund’s investment adviser, has contractually agreed to waive a portion or all of its management fees and pay Fund expenses through at least June 28, 2023.
|
Emerging markets weakness, which began in 2021 on COVID uncertainty and supply chain issues, persisted into 2022, driven by continued concerns over Chinese regulation – particularly, the potential
delisting of depository receipts – exacerbated by Russia’s invasion of Ukraine in late February. As a result of the war, the market values of Russian stocks traded overseas were effectively wiped out, while Hungarian and Chinese stocks also came
under pressure. With both energy and food costs spiking on continued Russian aggression in Ukraine (and consequential sanctions on Russia – both government-imposed and private sector self-sanctioning by Western companies), runaway inflation and
macroeconomic weakness heightened fears of a potentially painful global recession. Additionally, the Chinese market remained volatile, as the government took actions that impacted
5
Pzena Emerging Markets Value Fund
Commentary (Continued)
February 2023
multiple industries causing reverberations across global bourses. Emerging markets were weak in the third quarter driven by unremitting concerns over a global macroeconomic slowdown, as well as a
strengthening U.S. dollar. Emerging markets rebounded in the fourth quarter after initial concerns over the outcome of the politburo meetings in China were outweighed by subsequent actions taken by the Chinese government to reopen the economy.
Overall, the full period can be characterized by a relatively volatile Chinese economy, in combination with Russia’s war in Ukraine – both of which contributed to the material rise in global inflation.
The result thus far has been weaker GDP growth, higher global interest rates, and lower EM currencies, which negatively impacted EM stocks. In this environment, Value stocks have managed to outperform their Growth peers.
The Pzena Emerging Markets Value Fund fell but outperformed the MSCI Emerging Markets Index significantly this year. On a relative basis, the largest contributing sectors included financials, consumer
discretionary, and information technology while energy, health care and consumer staples were the only sectors to detract from relative performance. By country, China, Hong Kong, Korea, and Taiwan were the largest relative contributors, while Mexico,
South Africa and Peru detracted the most.
On an absolute basis, holdings in financials, consumer discretionary, and communication services drove portfolio returns. The largest detracting positions were from the information technology,
materials, and health care sectors. On a country basis, holdings from Turkey, China, and United Kingdom led the portfolio’s gainers whereas holdings in Taiwan, South Africa and Korea detracted the most.
Among individual names, Trip.com (Chinese online travel agency), Akbank (Turkish bank), and Flex Ltd. (Singaporean electronics original design manufacturer) were the strongest Fund performers.
Shares of Trip.com began to rise towards the end of 2022 as the Chinese government relaxed COVID-19 restrictions and Chinese reopening optimism surged. Shares of Turkish bank Akbank rose amid high
inflation in Turkey. Akbank announced a string of results that bested expectations. The company has benefitted from the upward trend in inflation due to their securities book which is linked to CPI, driving robust net interest income. Flex Ltd., the
leading outsourced electronics assembler, has reported strong earnings reports driven by continued strength across most end markets. Flex pushed forward on its plans to IPO its solar business Nextracker which was completed in February 2023.
The portfolio’s largest detractors were Sasol (South African energy and chemical company), Cognizant Technology Solutions (global IT service provider), and Taiwan Semiconductor Manufacturing.
Sasol’s shares declined as oil prices moderated in the second half of 2022, and the company manages through coal quality issues in their mining operations. Cognizant Technology Solutions fell amid the
challenging macro environment. The company experienced pressure on gross margins and elevated levels of turnover, which should normalize over time. Taiwan Semiconductor Manufacturing declined along with most semiconductor stocks, which are down in
general because of their high macro sensitivity and declining handset demand.
New names added to the portfolio included Credicorp (Peruvian bank), GF Securities (Chinese financial services company), Neoenergia (Brazilian utility), Ping An Insurance (Chinese insurer), Petroleo
Brasileiro (Brazilian gas company), and CIMC Enric (Chinese liquid/gas storage tank manufacturer).
Credicorp is a high return on equity bank within the underbanked Peruvian market where concerns over the Castillo administration, COVID’s impact on asset quality, and depressed earnings due to
accelerating digital transformation investments provided us with an attractive entry point.
GF Securities is the fifth-largest broker in China and generates over RMB 15 billion of operating profit from its brokerage, asset & fund management, lending, trading, and investment banking
business lines. The stock has recently traded down in sympathy with the Chinese A-share market; however, we believe opportunities exist for GF to pivot toward a more asset-light business mix, as well as optimize its balance sheet to further enhance
its return on tangible equity. At a higher level, GF should benefit from additional tailwinds by way of market reforms intended to promote greater foreign investment flows, direct financing (which is only 37% in China vs. over 80% in the U.S.), and
household asset reallocation from property/bank deposits into the equity markets. Further, we appreciate the valuation protection offered by a price-to-TBV currently near a ten-year low for a business that does not face risk of impairment, in our
view.
Neoenergia is a high-quality utility that is poised to show strong earnings growth as it is approaching the end of a capital expansion and as hydropower conditions normalize in Brazil.
Ping An is the largest life insurance company in China. Sales of new policies across the life insurance sector have been pressured due to lockdowns and lack of face-to-face meetings, but the company is
taking actions to prune and streamline its workforce to emerge as a stronger player.
We added Petroleo Brasileiro (“Petrobras”) to the portfolio. Petrobras is a state-owned oil and gas company with a high-quality asset base and high levels of free cash flow generation that is trading at
a very attractive valuation. The main controversy in the stock is concerns that the new Brazilian government will install management that could run it in an uneconomic manner that is unfriendly to minority shareholders. We believe that the company’s
robust reforms over the past six years provide better transparency and governance than in the past.
6
Pzena Emerging Markets Value Fund
Commentary (Continued)
February 2023
We began to build a position in CIMC Enric, a Chinese manufacturer of containers for the transportation and storage of liquids and gases. The company sells equipment to the Liquefied Natural Gas (LNG)
industry, beer brewers and is the leading chemical tank container manufacturer globally.
Disposals included CEZ A.S. (Czech utility), Tofas Turk Otomobil (Turkish auto OEM), Catcher Technology (Taiwanese original device manufacturer), Korea Shipbuilding & Offshore Engineering,
Antofagasta (Chilean mining), Reunert Limited (South African fiber cable manufacturer), Lukoil (Russian oil), Hyundai Motor (Korean auto OEM), and Light SA (Brazilian utility).
Emerging markets continue to be volatile as macro concerns and the invasion of Ukraine weigh on sentiment. We remain vigilant for opportunities to take advantage of companies that are being unduly
punished for issues that may ultimately be temporary. Our portfolio continues to offer compelling valuations given the underlying fundamentals of our companies.
Our largest sector exposures remain in Financials and Information Technology. Asia constitutes the bulk of the portfolio with the largest weights in China and Korea. We have a relative overweight to
emerging Europe and a relative underweight to China.
Mutual fund investing involves risk. Principal loss is possible. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences
in accounting methods. These risks are greater for investments in emerging markets. The Fund may have emphasis on a specific sector which could adversely affect a fund to a greater extent than if its emphasis was less. The Fund may invest in
securities which are less liquid and more difficult to sell than more liquid securities. The Fund emphasizes a “value” style of investing, which targets undervalued companies with characteristics for improved valuations. This style of investing is
subject to the risk that valuations never improve or that returns on “value” securities may not move in tandem with the returns on other styles of investing or the stock market in general.
The Pzena Funds are distributed by Quasar Distributors, LLC.
Fund holdings, exposures and characteristics are as of the date shown and are subject to change at any time. Please refer to the Schedule of Investments for more information.
The opinions expressed in this letter are those of the Fund manager, are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security.
The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets, and provides equity returns including
dividends net of withholding tax rates as calculated by MSCI. The index cannot be invested in directly.
The MSCI Emerging Markets Value Index is based on a traditional market cap weighted parent index, the MSCI Emerging Markets Index. The value investment style characteristics for index construction are
defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. The index cannot be invested in directly.
7
Pzena Small Cap Value Fund
Commentary
February 2023
CHANGE IN VALUE OF $1,000,000 INVESTMENT
Average Annual Total Returns for the Fiscal Year Ended February 28, 2023.
|
Since
|
||||||
|
Three
|
Six
|
One
|
Three
|
Five
|
Inception
|
|
|
Months(1)
|
Months(1)
|
Year(1)
|
Years
|
Years
|
(4/27/2016)
|
|
|
Pzena Small Cap Value Fund – Investor Class (PZVSX)
|
4.65%
|
16.43%
|
6.34%
|
17.45%
|
7.81%
|
8.45%
|
|
Pzena Small Cap Value Fund – Institutional Class (PZISX)
|
4.74%
|
16.45%
|
6.50%
|
17.74%
|
8.09%
|
8.75%
|
|
Russell 2000® Value Index
|
0.00%
|
4.20%
|
-4.40%
|
12.87%
|
6.38%
|
8.66%
|
|
(1)
|
Not annualized.
|
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an
investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. The graph and table do not reflect the deduction of taxes that a shareholder may
pay on Fund distributions or the redemption of Fund shares. Performance data current to the most recent month-end may be obtained by calling 844.PZN.1996 (844.796.1996).
PZVSX Expense Ratio – Gross: 1.52%
PZVSX Expense Ratio – Net: 1.35%*
PZISX Expense Ratio – Gross: 1.17%
PZISX Expense Ratio – Net: 1.00%*
Expense ratios shown are as of the Fund’s prospectus dated June 28, 2022.
|
*
|
Pzena Investment Management, LLC, the Fund’s investment adviser, has contractually agreed to waive a portion or all of its management fees and pay Fund expenses through at least June 28, 2023.
|
Equity markets whipsawed early in the period, vacillating between positive and negative developments on the war in Ukraine, as investors grappled with the economic implications of Western sanctions on
Russia – the effects of which reverberated across the world.
With consumer prices spiking, consequential Fed rate hikes heightened fears of a potentially painful domestic recession, taking a toll on the valuations of small cap stocks more levered to the economy.
Value started to outperform growth around this time, as the eventuality of material policy rate increases and associated higher yields, impacted longer duration growth stocks the most. Rising input costs also had a more pronounced effect on domestic
small caps, which underperformed their large cap peers. Equities rebounded strongly in the fourth quarter as supply chain issues began to dissipate, and fears of a deep recession were tempered by moderating inflation indicators. U.S. markets declined
slightly during February after a strong start to 2023, as increased interest rate expectations ended the rally that began at the turn of the year. Resilient
8
Pzena Small Cap Value Fund
Commentary (Continued)
February 2023
economic data, such as continued low unemployment, strong retail sales data and persistent inflation, indicated continued economic expansion. As a result, the Federal Reserve reiterated its commitment
to raising rates as necessary, in order to control inflation, which weighed on equities.
Amid this backdrop, the Pzena Small Cap Value Fund rose and outperformed the Russell 2000 Value Index markedly. Information technology and materials holdings contributed to absolute performance and
outperformance of the benchmark, while energy holdings were also strong on an absolute basis. Consumer staples holdings were the largest detractor in absolute terms and relative to the benchmark. Health care and industrials holdings also detracted
from Fund performance.
Individually, the Fund’s largest contributors were Belden, Orion Engineered Carbons, and Terex Corporation. Signal transmission company Belden reported a string of strong results with revenues and
earnings above prior guidance and recently raised 2023 guidance. The company’s multi-year strategy of focusing on core growth end markets (industrial automation, broadband & 5G, and smart buildings) continues to drive the stock’s performance.
Carbon black producer Orion Engineered Carbons reported a sales and earnings beat for the Fourth Quarter. Results were driven by continued strong demand in the Rubber business, along with price realization and improved mix in the Specialty and Rubber
businesses. We continue to believe Orion is a leading carbon black manufacturer with a strong specialty chemical business and a valuation well below replacement value. Terex, manufacturer of aerial work platforms, reported a string of earnings beats
driven by higher volumes and strong pricing. The backlog for aerial work platforms continued to grow throughout the year and the company provided 2023 guidance slightly ahead of consensus.
The largest detractors from Fund performance were Steelcase, JELD-WEN and Spectrum Brands. Office furniture manufacturer Steelcase traded down throughout the year as recessionary concerns and
return-to-office uncertainties have delayed companies’ decisions to invest in office space. The company has done well to increase pricing to offset cost inflation. Therefore, Steelcase has reduced their headcount by 8% and reduced its dividend, but
it is still yielding approximately 6%. The company remains attractively priced according to our normal earnings estimate. Steelcase has done well to manage the challenging environment it currently faces, and we expect margins to increase back to
their normal range as pricing continues to catch up with recent cost inflation. Window and door manufacturer JELD-WEN fell amid the difficult macro environment and a slowdown in new housing starts. The CEO’s departure also dampened sentiment. We
continue to believe JELD-WEN can maintain strong pricing and increase profitability in the housing market with their strong position in consolidated markets once they get past manufacturing bottlenecks. Consumer products company Spectrum Brands fell
after the U.S. Department of Justice (“DOJ”) challenged the planned sale of its home improvement segment on antitrust concerns. Spectrum and its acquisition partner, Assa Abloy, are contesting the decision, but there is a wide range of outcomes for
the stock, as Spectrum will have zero debt and is grossly undervalued if the deal occurs but will be highly levered if the transaction is blocked. Shares of Spectrum rebounded somewhat after Assa Abloy announced the divestment of some of its lock
businesses which increases the likelihood that the DOJ will approve Spectrum’s proposed divestment.
We initiated positions in Masonite, Adient, and Axalta. Masonite is a leading global manufacturer of interior and exterior doors for residential new and the repair/improvement and non-residential
building markets, and a stock we had previously owned. They and their principal competitor JELD-WEN are the only vertically integrated door manufacturers in North America and together they control approximately 80% of the door market. The stock
traded down on housing concerns with slowing starts and higher interest rates, which created an attractive entry opportunity. Adient, is a leading supplier of auto seating globally. The company’s shares had fallen as the prior CEO had focused on
share gain, but mispriced parts of the business and increased leverage. The company’s current management team has refocused the business on profitability and cash flow, creating an attractive valuation opportunity and a beneficiary as auto
manufacturing bottlenecks ease. Axalta is a leading supplier of coating products for automobiles and other industrial applications. The company maintains a heavy market share in the auto market, and switching costs are high in the premium refinish
market, where auto repair shops typically build out IT stacks and paint systems that are compatible with one supplier’s offerings. Axalta’s earnings are currently depressed because both new car volumes and miles driven are down, but the company is
well positioned to benefit from a recovery in each.
We also added GMS Inc., MasterBrand and Koppers Holdings to the Fund during the past twelve months.
We exited Super Micro Computer (server manufacturer), NexTier Oilfield Solutions (oil servicer), TechnipFMC (oil servicer), Murphy Oil (oil producer), and Ryder System (transport company), all on
strength.
We also sold out of Huntington Bancshares (regional bank) on valuation.
Despite the economic uncertainty gripping the market, overall positioning remains focused on holdings of strong businesses with healthy balance sheets that are executing on their individual business
strategies to deliver value to their shareholders at a time when their valuations give the portfolio exceptionally attractive entry points.
9
Pzena Small Cap Value Fund
Commentary (Continued)
February 2023
Inflation worries and the continuing concerns surrounding Russia’s invasion of Ukraine are at the top of investors’ minds, as disruption in the energy market significantly increases the probability of a
global recession in 2023. These geopolitical and macroeconomic concerns led to equity market declines this year that were, on average, in line with past recessions. While the macroeconomic environment did not become any clearer in 2022, it bears
remembering that recessions are typically short and manageable and the seeds of market rallies are planted during recession-driven market selloffs, as the market performs particularly well in the five-year period following the start of a recession,
and value tends to outperform. Similar to the prior period of stagflation from 1973-1982, we believe cheap stocks globally appear to stand out in offering solid positive inflation-adjusted earnings yields.
Mutual fund investing involves risk. Principal loss is possible. Investments in small-cap companies involve additional risks such as limited liquidity and greater volatility than
larger companies. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in emerging markets. The Fund may have emphasis on a
specific sector which could adversely affect a fund to a greater extent than if its emphasis was less. The Fund may invest in securities which are less liquid and more difficult to sell than more liquid securities. The Fund emphasizes a “value” style
of investing, which targets undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” securities may not move in tandem with the
returns on other styles of investing or the stock market in general.
The Pzena Funds are distributed by Quasar Distributors, LLC.
Fund holdings, exposures and characteristics are as of the date shown and are subject to change at any time. Please refer to the Schedule of Investments for more information. The opinions expressed in
this letter are those of the Fund manager, are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security.
The Russell 2000® Value Index measures the performance of those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values. The index cannot be invested in directly.
10
Pzena International Small Cap Value Fund
Commentary
February 2023
CHANGE IN VALUE OF $1,000,000 INVESTMENT
Average Annual Total Returns for the Fiscal Year Ended February 28, 2023.
|
Since
|
|||||
|
Three
|
Six
|
One
|
Three
|
Inception
|
|
|
Months(1)
|
Months(1)
|
Year(1)
|
Years
|
(7/2/2018)
|
|
|
Pzena International Small Cap Value Fund – Investor Class (PZVIX)
|
13.67%
|
25.07%
|
10.51%
|
14.85%
|
3.61%
|
|
Pzena International Small Cap Value Fund – Institutional Class (PZIIX)
|
13.78%
|
25.29%
|
10.73%
|
15.13%
|
3.88%
|
|
MSCI World ex-USA Small Cap Index
|
5.64%
|
7.18%
|
-9.68%
|
6.05%
|
2.20%
|
|
MSCI World ex-USA Small Cap Value Index
|
7.30%
|
9.60%
|
-6.09%
|
6.70%
|
2.42%
|
|
(1)
|
Not annualized.
|
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an
investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. The graph and table do not reflect the deduction of taxes that a shareholder may
pay on Fund distributions or the redemption of Fund shares. Performance data current to the most recent month-end may be obtained by calling 844.PZN.1996 (844.796.1996).
PZVIX Expense Ratio – Gross: 3.23%
PZVIX Expense Ratio – Net: 1.52%*
PZIIX Expense Ratio – Gross: 2.88%
PZIIX Expense Ratio – Net: 1.17%*
Expense ratios shown are as of the Fund’s prospectus dated June 28, 2022.
|
*
|
Pzena Investment Management, LLC, the Fund’s investment adviser, has contractually agreed to waive a portion or all of its management fees and pay Fund expenses through at least June 28, 2023.
|
Global bourses came under heavy selling pressure at the beginning of the period with the Russian invasion of Ukraine and the prospect of a European recession denting investor sentiment. In the months to
follow, equities continued to decline amid a deterioration in macroeconomic sentiment, with recession fears rising. Central banks increased policy rates, in order to combat persistent inflation, which weighed on equity valuations across geographies,
market capitalization and style. Markets rallied in the Fourth Quarter of 2022 and into 2023 due to a number of factors, including the moderation of various inflation indicators, a warmer start to the winter in Europe, the Bank of Japan’s policy
adjustment reversing decades of negative interest rates, and China ending its strict zero-COVID policy. Value outperformed growth though both fell during the 12-month period. Small cap equities trailed large caps, as the large caps typically benefit
during a ‘flight to safety’ instigated by recession concerns.
11
Pzena International Small Cap Value Fund
Commentary (Continued)
February 2023
The Pzena International Small Cap Value Fund rose significantly and outperformed the MSCI World ex USA Small Cap Index by a wide margin, with the industrials and energy sectors driving absolute
performance, while materials and information technology both detracted.
The top individual performers in the period were oil servicers Subsea 7 and TechnipFMC, along with Bank of Ireland Group. Oil service companies benefited from higher energy prices and expectations that
spend would have to ramp up materially soon to make up for the anticipated shortfall in oil & gas supply. Both Subsea 7 and TechnipFMC reported strong earnings through the year and order flow remains robust amid increased spending by oil &
gas companies. Bank of Ireland Group benefitted from rising interest rates and raised its FY 2022 net interest income guidance which propelled shares upward.
The largest detractors from the Fund’s performance in the period were Sabre Insurance Group, Scor SE, and VTech Holdings.
Sabre Insurance Group a private motor-only insurer that focuses on the specialty segment – was the worst individual performer. Shares fell precipitously on the company’s earnings release in July, which
revealed a combined ratio up 19 percentage points mostly on higher costs for repairs, parts, used cars, etc. Given that the industry as a whole has been losing money, we expect the standard players to retreat from the non-standard market (where Sabre
operates), leaving Sabre well-positioned going forward.
Shares of French multi-line reinsurer Scor SE fell after the company preannounced a 1Q loss back in April, as they incurred a material charge related to the war in Ukraine. Shares also dropped on its
earnings release in late July, which revealed larger-than-expected catastrophe losses, weighing on its combined ratio.
Hong Kong-based Vtech, electronic learning products manufacturer and contract manufacturing services provider, issued a profit warning in February 2023 which caused shares to fall. Weaker sales and
higher marketing expenses, similar to peers, were the drivers.
We initiated a position in Deutz AG, a German manufacturer of off-highway diesel engines products used in a variety of applications such as excavators, aerial work platforms, tractors, and generators.
While off-highway is expected to transition later to green powertrain solutions, Deutz is refocusing its green investments to areas that are both higher probability and core-adjacent, such as hydrogen fuel alternatives for their engines. We expect
earnings to rebound via both a cyclical recovery in off-highway volumes, as well as from self-help initiatives intended to improve the cost structure, while the servicing business generates material profits in the interim.
We also added Logista, a distributor of tobacco products in Spain, France and Italy, to the portfolio. Logista is a high-quality business with a solid dividend yield trading at an attractive valuation
relative to our estimate of normal earnings. Going forward, we expect Logista to prioritize either maintaining or growing its dividend, while building its pharmaceutical distribution business.
Other portfolio additions were Teijin Limited (Japanese chemical and healthcare), C&C Group (Irish brewer and beverage distributor), Direct Line Insurance (UK personal lines insurer), Duerr AG
(German industrial equipment, and engineering & construction), Wizz Air (European low-cost airline), ams OSRAM (German optics and sensor producer) and Wonik IPS (Korean memory and semiconductor manufacturing equipment supplier).
We exited recent outperformer TechnipFMC on strength. We also exited the positions in multinational market research company Ipsos and UK power company Drax on strength.
We exited the position in Scor SE, as the company hadn’t experienced material improvement in mortality trends as the COVID-19 pandemic dissipated, and the range of outcomes widened significantly.
Other disposals included United Integrated Services and Capita PLC.
Despite the economic uncertainty gripping the market, positioning remains focused on holdings of strong businesses with healthy balance sheets that are executing on their individual business strategies
to deliver value to their shareholders. Although short-term retracements in a number of holdings have erased some previous gains, we believe the current valuations are compelling for long-term investors, even factoring in a global recession.
Mutual fund investing involves risk. Principal loss is possible. Investments in small- and mid-cap companies involve additional risks such as limited liquidity and greater volatility
than larger companies. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences in accounting methods. These risks are greater for investments in emerging markets. The Fund may have emphasis
on a specific sector which could adversely affect a fund to a greater extent than if its emphasis was less. The Fund may invest in securities which are less liquid and more difficult to sell than more liquid securities. The Fund emphasizes a “value”
style of investing, which targets undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that valuations never improve or that returns on “value” securities may not move in tandem with the
returns on other styles of investing or the stock market in general.
The Pzena Funds are distributed by Quasar Distributors, LLC.
12
Pzena International Small Cap Value Fund
Commentary (Continued)
February 2023
Fund holdings, exposures and characteristics are as of the date shown and are subject to change at any time. Please refer to the Schedule of Investments for more information.
The opinions expressed in this letter are those of the Fund manager, are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security.
The MSCI World ex-USA Small Cap Index captures small cap representation across 22 of 23 Developed Markets (DM) countries* (excluding the United States). The index covers approximately 14% of the free
float-adjusted market capitalization in each country. *DM countries in this index include: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal,
Singapore, Spain, Sweden, Switzerland and the U.K. The index cannot be invested in directly.
The MSCI World ex-USA Small Cap Value Index captures small cap securities exhibiting overall value style characteristics across 22 Developed Markets countries. The value investment style characteristics
for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield. The index cannot be invested in directly.
13
Pzena International Value Fund
Commentary
February 2023
CHANGE IN VALUE OF $1,000,000 INVESTMENT
Average Annual Total Returns for the Fiscal Year Ended February 28, 2023.
|
Since
|
||||
|
Three
|
Six
|
One
|
Inception
|
|
|
Months(1)
|
Months(1)
|
Year(1)
|
(6/28/2021)
|
|
|
Pzena International Value Fund – Investor Class (PZVNX)
|
9.68%
|
20.95%
|
0.33%
|
-1.87%
|
|
Pzena International Value Fund – Institutional Class (PZINX)
|
9.65%
|
21.04%
|
0.53%
|
-1.67%
|
|
MSCI EAFE Index
|
5.93%
|
12.58%
|
-3.14%
|
-5.11%
|
|
MSCI EAFE Value Index
|
7.55%
|
15.68%
|
0.61%
|
-0.46%
|
|
(1)
|
Not annualized.
|
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an
investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the Fund may be lower or higher than the performance quoted. The graph and table do not reflect the deduction of taxes that a shareholder may
pay on Fund distributions or the redemption of Fund shares. Performance data current to the most recent month-end may be obtained by calling 844.PZN.1996 (844.796.1996).
PZVNX Expense Ratio - Gross: 2.93%
PZVNX Expense Ratio - Net: 1.09%*
PZINX Expense Ratio - Gross: 2.58%
PZINX Expense Ratio - Net: 0.74%*
Expense ratios shown are as of the Fund’s prospectus dated June 28, 2022.
|
*
|
Pzena Investment Management, LLC, the Fund’s investment adviser, has contractually agreed to waive a portion or all of its management fees and pay Fund expenses through at least June 28, 2023.
|
After a strong run that began in 2020, international equities started to weaken in late 2021 and took a major downturn in 2022. Ongoing COVID related disruption and rising geopolitical tension weighed
on markets. The war in Ukraine and resulting energy market turmoil have led to significant macro uncertainty in Europe and inflationary pressure around the world. As a result, along with higher interest rates, investors began to price in the
possibility of a global recession – most notably in Europe, the epicenter of the energy crisis. This translated into weakening foreign currencies against the dollar and declining equity market valuations, with value stocks outperforming growth stocks
on a relative basis. More recently markets staged a strong partial recovery in the fourth quarter. Investors reacted positively to tentative signs of easing inflationary pressures, an improving energy outlook in Europe and China’s exit from the
zero-COVID regime. Markets performed well to start 2023, though investor sentiment vacillates depending on economic data readouts and expectations for the path of interest rates, as central banks across the globe continue to combat heightened
inflation.
14
Pzena International Value Fund
Commentary (Continued)
February 2023
The Fund rose slightly during the period, in line with the MSCI EAFE Value Index and ahead of the MSCI EAFE Index. Holdings in financials, industrials, and energy stocks added to relative performance
against the MSCI EAFE Index, while health care, materials and utilities names detracted.
Specific to the Fund, financials (led by Bank of Ireland Group and ING Groep), energy (led by TechnipFMC), and industrials holdings added the most value. TechnipFMC, UK-domiciled oil services provider
was the top performer and reported impressive earnings and order flow for 2Q and 3Q 2022. The company gained from rising spending from customers in the oil & gas industries. Bank of Ireland Group benefitted from rising interest rates and raised
its FY 2022 net interest income guidance which propelled shares upward. Benelux bank ING Groep also climbed as it continues to benefit from heightened net interest income and investors appreciate the bank’s commitment to returning excess capital to
shareholders.
Consumer discretionary, consumer staples, and healthcare holdings were the largest detractors. UK builder merchant Travis Perkins fell due to margin erosion, particularly in its Toolstation unit,
precipitated by rising costs in conjunction with softening volumes. Labor shortages and inflation pressured the profitability of dialysis products and services provider Fresenius Medical Care’s dialysis centers, prompting management to issue a major
cut to their fiscal year 2022 guidance. We view these headwinds as manageable longer term. Swiss bank Credit Suisse declined following its late October strategic update in which the company detailed its restructuring plan, and management warned that
a large loss is expected in the 4th quarter due to client outflows. We ultimately exited our position in Credit Suisse in January, as we determined that the range of outcomes had widened significantly to the point that its valuation didn’t adequately
compensate us for the inherent risk.
The portfolio’s depressed valuation reflects systemic fears over short-term earnings degradation. Today, our opportunity set is shifting to companies where inflation has been negatively impacting
earnings, whose share prices are heavily discounted as a result, e.g. those companies whose price increases have lagged cost inflation thus far, resulting in margin contraction – a negative dynamic that we believe will be temporary as fluid
management teams adjust operations and cost structures. By focusing on well-positioned companies with resilient operations and good balance sheets, we expect to benefit from long-term earnings improvement despite near-term macro headwinds.
Among the positions we initiated during the year were Randstad NV (Dutch staffing company), Subaru Corp. (Japanese auto OEM), Daimler Truck (German commercial truck OEM), and Koninklijke Philips (Dutch
healthcare equipment company).
Randstad has been capitalizing on structural changes in the staffing industry, taking share in the process. Despite near-term recession concerns, we see the company as well positioned to weather the
storm given its strong balance sheet and cash flow generation. As such, we viewed the recent price action as an opportunity to buy a long-term industry winner at a very attractive valuation.
Supply chain disruption has severely impacted Subaru’s output volume and profits. Subaru’s limited product lineup meant fewer opportunities to enrich the product mix and pricing to protect margin. As
the semiconductor shortage eases, we expect robust recovery in Subaru’s volume and profits.
Daimler Truck Holding, a 2021 spinoff from Mercedes-Benz Group, is a global manufacturer of trucks and buses with leadership positions in North America and Europe. Following the spinoff, the stock has
been weak due to the drawdown in industrials on recession concerns and fears of cost inflation weighing on margins. Despite these headwinds we view Daimler Truck as attractively valued, and think the company should benefit from a more focused,
independent management team that can help turn around its underperforming European business.
We believe that Philips’ earnings are temporarily depressed due to supply chain issues, and a product recall for its CPAP machines, which has been an overhang on shares. We anticipate earnings will
recover over time as better pricing flows through, supply chain pressures ease, and the recall is addressed.
Other names added to the portfolio were Toray Industries (Japanese diversified chemical conglomerate), Bayer AG (German pharma and crop protection company), Samsung Electronics (Korean memory chip and
smartphone maker), Bank of Ireland Group, MinebeaMitsumi (Japanese machinery and electronic components) and Magna International (Canadian auto supplier).
We exited TechnipFMC (UK-based oil servicer), POSCO (Korean steel), Maersk (Danish shipper), and Schneider Electric (French electrical equipment), all on strength. Other disposals included Panasonic,
Wilmar, Honda, Novartis, Royal KPN, Suzuki Motor, Sumitomo Mitsui Financial Group and Royal KPN. We also sold out of SCOR SE as the range of outcomes widened.
15
Pzena International Value Fund
Commentary (Continued)
February 2023
Mutual fund investing involves risk. Principal loss is possible. Investments in foreign securities involve political, economic and currency risks, greater volatility and differences
in accounting methods. These risks are greater for investments in emerging markets. The Fund may have emphasis on a specific sector which could adversely affect a fund to a greater extent than if its emphasis was less. The Fund emphasizes a “value”
style of investing, which targets undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that valuations never improve or that returns on “value” securities may not move in tandem with the
returns on other styles of investing or the stock market in general.
The Pzena Funds are distributed by Quasar Distributors, LLC.
Fund holdings, exposures and characteristics are as of the date shown and are subject to change at any time. Please refer to the Schedule of Investments for more information. The opinions expressed in
this letter are those of the Fund manager, are subject to change, are not guaranteed, and should not be considered recommendations to buy or sell any security.
MSCI EAFE Index (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S.
& Canada, and provides equity returns including dividends net of withholding tax rates as calculated by MSCI. The index cannot be invested in directly.
MSCI EAFE Value Index captures large and mid-cap securities exhibiting overall value style characteristics across Developed Markets countries around the world, excluding the U.S. and Canada, and
provides equity returns including dividends net of withholding tax rates as calculated by MSCI. The index targets 50% coverage of the free float-adjusted market capitalization of the MSCI EAFE Index. The index cannot be invested in directly.
16
Pzena Mid Cap Value Fund
Portfolio Allocation
February 28, 2023 (Unaudited)
The portfolio’s holdings and allocations are subject to change. The percentages are of total investments as of February 28, 2023.
Note: For presentation purposes, the Fund has grouped some of the industry categories. For purposes of categorizing securities for compliance with Section 8(b)(1) of the Investment Company Act of 1940,
as amended, the Fund uses more specific industry classifications.
17
Pzena Mid Cap Value Fund
Schedule of Investments
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
COMMON STOCKS – 96.50%
|
||||||||
|
Basic Materials – 7.02%
|
||||||||
|
Dow, Inc.
|
99,810
|
$
|
5,709,132
|
|||||
|
Olin Corp.
|
65,091
|
3,759,005
|
||||||
|
9,468,137
|
||||||||
|
Consumer Discretionary – 18.72%
|
||||||||
|
Gap, Inc.
|
206,061
|
2,680,854
|
||||||
|
Gildan Activewear, Inc. (b)
|
132,579
|
4,209,383
|
||||||
|
Lear Corp.
|
38,836
|
5,423,447
|
||||||
|
Magna International, Inc. (b)
|
55,093
|
3,070,333
|
||||||
|
Newell Brands, Inc.
|
266,306
|
3,912,035
|
||||||
|
PVH Corp.
|
31,602
|
2,535,744
|
||||||
|
Skechers U.S.A., Inc. – Class A (a)
|
76,854
|
3,420,772
|
||||||
|
25,252,568
|
||||||||
|
Energy – 3.58%
|
||||||||
|
Halliburton Co.
|
67,179
|
2,433,895
|
||||||
|
NOV, Inc.
|
109,676
|
2,399,711
|
||||||
|
4,833,606
|
||||||||
|
Financials – 31.17%
|
||||||||
|
American International Group, Inc.
|
36,542
|
2,233,082
|
||||||
|
Axis Capital Holdings, Ltd. (b)
|
44,448
|
2,698,882
|
||||||
|
CNO Financial Group, Inc.
|
188,121
|
4,819,660
|
||||||
|
Equitable Holdings, Inc.
|
151,107
|
4,747,782
|
||||||
|
Fidelity National Financial, Inc.
|
64,017
|
2,551,717
|
||||||
|
Fifth Third Bancorp
|
114,459
|
4,154,862
|
||||||
|
Globe Life, Inc.
|
22,914
|
2,788,405
|
||||||
|
Invesco, Ltd. (b)
|
128,586
|
2,270,829
|
||||||
|
KeyCorp
|
216,452
|
3,958,907
|
||||||
|
Regions Financial Corp.
|
147,044
|
3,429,066
|
||||||
|
Reinsurance Group of America, Inc.
|
27,368
|
3,953,855
|
||||||
|
Voya Financial, Inc.
|
59,534
|
4,434,688
|
||||||
|
42,041,735
|
||||||||
|
Health Care – 7.86%
|
||||||||
|
Cardinal Health, Inc.
|
24,196
|
1,831,879
|
||||||
|
Fresenius Medical Care
|
||||||||
|
AG & Co. KGaA – ADR
|
318,218
|
6,256,166
|
||||||
|
Henry Schein, Inc. (a)
|
32,143
|
2,517,118
|
||||||
|
10,605,163
|
||||||||
|
Industrials – 16.72%
|
||||||||
|
Axalta Coating Systems, Ltd. (a)(b)
|
115,817
|
3,451,347
|
||||||
|
Fortune Brands Home & Security, Inc.
|
39,598
|
2,453,096
|
||||||
|
JELD-WEN Holding, Inc. (a)
|
219,746
|
2,889,660
|
||||||
|
MasTec, Inc. (a)
|
25,682
|
2,509,645
|
||||||
|
MasterBrand, Inc. (a)
|
39,598
|
385,684
|
||||||
|
Mohawk Industries, Inc. (a)
|
24,134
|
2,482,182
|
||||||
|
Terex Corp.
|
92,735
|
5,490,839
|
||||||
|
Wabtec Corp.
|
27,678
|
2,887,646
|
||||||
|
22,550,099
|
||||||||
|
Technology – 8.47%
|
||||||||
|
Avnet, Inc.
|
78,704
|
3,518,856
|
||||||
|
Cognizant Technology
|
||||||||
|
Solutions Corp. – Class A
|
62,496
|
3,914,124
|
||||||
|
SS&C Technologies Holdings, Inc.
|
68,168
|
4,001,462
|
||||||
|
11,434,442
|
||||||||
|
Utilities – 2.96%
|
||||||||
|
Edison International
|
60,286
|
3,991,536
|
||||||
|
Total Common Stocks
|
||||||||
|
(Cost $103,418,273)
|
130,177,286
|
|||||||
|
SHORT-TERM INVESTMENT – 3.08%
|
||||||||
|
Money Market Fund – 3.08%
|
||||||||
|
Fidelity Institutional Government
|
||||||||
|
Portfolio – Class I, 4.46% (c)
|
4,153,300
|
4,153,300
|
||||||
|
Total Short-Term Investment
|
||||||||
|
(Cost $4,153,300)
|
4,153,300
|
|||||||
|
Total Investments
|
||||||||
|
(Cost $107,571,573) – 99.58%
|
134,330,586
|
|||||||
|
Other Assets in Excess
|
||||||||
|
of Liabilities – 0.42%
|
561,097
|
|||||||
|
TOTAL NET ASSETS – 100.00%
|
$
|
134,891,683
|
||||||
Percentages are stated as a percent of net assets.
|
ADR
|
American Depositary Receipt
|
|
|
KGaA
|
Kommanditgesellschaft Auf Aktien
|
|
|
(a)
|
Non-income producing security.
|
|
|
(b)
|
Foreign issued security.
|
|
|
(c)
|
The rate listed is the 7-day annualized yield as of February 28, 2023.
|
The accompanying notes are an integral part of these financial statements.
18
Pzena Emerging Markets Value Fund
Portfolio Allocation
February 28, 2023
The portfolio’s holdings and allocations are subject to change. The percentages are of total investments as of February 28, 2023.
19
Pzena Emerging Markets Value Fund
Schedule of Investments
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
COMMON STOCKS – 90.35%
|
||||||||
|
Brazil – 4.68%
|
||||||||
|
Ambev S.A. (a)
|
14,869,000
|
$
|
38,142,026
|
|||||
|
Neoenergia S.A.
|
4,102,350
|
11,040,524
|
||||||
|
49,182,550
|
||||||||
|
China – 21.19%
|
||||||||
|
Alibaba Group Holding, Ltd. (a)
|
2,671,200
|
29,436,492
|
||||||
|
Baidu, Inc. – ADR (a)
|
90,638
|
12,479,946
|
||||||
|
Baidu, Inc. – Class A (a)
|
818,650
|
14,058,912
|
||||||
|
Brilliance China
|
||||||||
|
Automotive Holdings, Ltd.
|
9,972,000
|
4,980,029
|
||||||
|
China Construction Bank
|
||||||||
|
Corp. – H shares
|
15,105,000
|
9,236,884
|
||||||
|
China Overseas Land &
|
||||||||
|
Investment, Ltd.
|
11,760,118
|
29,155,336
|
||||||
|
CIMC Enric Holdings, Ltd.
|
9,464,000
|
9,705,863
|
||||||
|
Dongfeng Motor Group
|
||||||||
|
Co., Ltd. – H shares
|
2,392,000
|
1,221,994
|
||||||
|
GF Securities Co., Ltd. – H Shares
|
10,568,800
|
14,999,418
|
||||||
|
Grand Baoxin Auto Group, Ltd. (a)
|
9,587,000
|
470,226
|
||||||
|
Lenovo Group, Ltd.
|
30,608,000
|
27,451,821
|
||||||
|
Meituan – Class B (a)
|
24,770
|
429,485
|
||||||
|
Midea Group Co., Ltd. – Class A
|
1,360,000
|
10,281,235
|
||||||
|
Ping An Insurance (Group) Co.
|
||||||||
|
of China, Ltd. – A Shares
|
625,800
|
4,346,710
|
||||||
|
Ping An Insurance (Group) Co.
|
||||||||
|
of China, Ltd. – H Shares
|
1,604,000
|
10,891,686
|
||||||
|
Tencent Holdings, Ltd.
|
247,700
|
10,842,831
|
||||||
|
Trip.com Group, Ltd. – ADR (a)
|
850,424
|
30,232,573
|
||||||
|
Weichai Power Co., Ltd. – H Shares
|
1,631,000
|
2,418,636
|
||||||
|
222,640,077
|
||||||||
|
Hong Kong – 7.04%
|
||||||||
|
Galaxy Entertainment Group, Ltd.
|
4,189,000
|
27,857,645
|
||||||
|
Pacific Basin Shipping, Ltd.
|
73,733,000
|
26,771,352
|
||||||
|
VTech Holdings, Ltd.
|
1,435,800
|
7,883,785
|
||||||
|
Yue Yuen Industrial (Holdings), Ltd.
|
7,769,500
|
11,481,922
|
||||||
|
73,994,704
|
||||||||
|
Hungary – 1.95%
|
||||||||
|
OTP Bank PLC
|
675,079
|
20,504,683
|
||||||
|
India – 4.49%
|
||||||||
|
Aurobindo Pharma, Ltd.
|
2,650,533
|
14,836,957
|
||||||
|
ICICI Bank, Ltd.
|
270,321
|
2,795,342
|
||||||
|
Shriram Transport Finance Co., Ltd.
|
1,374,557
|
20,008,748
|
||||||
|
State Bank of India
|
1,102,858
|
6,974,617
|
||||||
|
State Bank of India – GDR
|
40,600
|
2,545,620
|
||||||
|
47,161,284
|
||||||||
|
Indonesia – 2.01%
|
||||||||
|
PT Bank Mandiri (Persero) Tbk
|
32,232,000
|
21,135,738
|
||||||
|
Peru – 1.26%
|
||||||||
|
Credicorp, Ltd.
|
104,027
|
13,255,120
|
||||||
|
Republic of Korea – 14.97%
|
||||||||
|
DB Insurance Co., Ltd.
|
483,930
|
28,159,917
|
||||||
|
Hankook Tire & Technology Co., Ltd.
|
1,237,438
|
34,787,601
|
||||||
|
KB Financial Group, Inc.
|
232,010
|
8,994,606
|
||||||
|
POSCO
|
129,070
|
31,017,767
|
||||||
|
Samsung Electronics Co., Ltd.
|
822,301
|
37,658,372
|
||||||
|
Shinhan Financial Group Co., Ltd.
|
473,260
|
13,894,692
|
||||||
|
Woink IPS Co., Ltd.
|
121,183
|
2,843,554
|
||||||
|
157,356,509
|
||||||||
|
Romania – 0.87%
|
||||||||
|
Banca Transilvania S.A.
|
2,173,634
|
9,187,426
|
||||||
|
Russian Federation – 0.00%
|
||||||||
|
Sberbank of Russia PJSC – ADR (a)(b)
|
408,511
|
4,085
|
||||||
|
Singapore – 2.16%
|
||||||||
|
Wilmar International, Ltd.
|
7,769,300
|
22,700,910
|
||||||
|
South Africa – 2.44%
|
||||||||
|
Sasol
|
1,739,350
|
25,603,914
|
||||||
|
Taiwan – 14.31%
|
||||||||
|
Compal Electronics, Inc.
|
35,824,000
|
28,393,955
|
||||||
|
Elite Material Co., Ltd.
|
2,269,000
|
14,186,137
|
||||||
|
Hon Hai Precision Industry Co., Ltd.
|
11,148,132
|
36,953,719
|
||||||
|
Lite-On Technology Corp.
|
9,967,000
|
22,734,423
|
||||||
|
Taiwan Semiconductor
|
||||||||
|
Manufacturing Co., Ltd.
|
1,349,000
|
22,623,902
|
||||||
|
Taiwan Semiconductor
|
||||||||
|
Manufacturing Co., Ltd. – ADR
|
142,670
|
12,422,277
|
||||||
|
United Integrated Services Co., Ltd.
|
1,771,000
|
13,106,894
|
||||||
|
150,421,307
|
||||||||
|
Thailand – 3.18%
|
||||||||
|
Bangkok Bank Public Co., Ltd.
|
2,924,100
|
13,403,720
|
||||||
|
Bangkok Bank Public
|
||||||||
|
Co., Ltd. – NVDR
|
656,900
|
3,039,031
|
||||||
|
Siam Commercial Bank
|
||||||||
|
PLC – NVDR (a)
|
5,796,100
|
16,974,395
|
||||||
|
33,417,146
|
||||||||
|
Turkey – 0.77%
|
||||||||
|
Akbank T.A.S.
|
8,746,357
|
8,104,911
|
||||||
The accompanying notes are an integral part of these financial statements.
20
Pzena Emerging Markets Value Fund
Schedule of Investments (Continued)
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
COMMON STOCKS – 90.35% (Continued)
|
||||||||
|
United Arab Emirates – 2.07%
|
||||||||
|
Abu Dhabi Commercial Bank PJSC
|
9,519,458
|
$
|
21,718,183
|
|||||
|
United Kingdom – 2.23%
|
||||||||
|
Standard Chartered PLC
|
2,479,170
|
23,385,358
|
||||||
|
United States – 4.73%
|
||||||||
|
Cognizant Technology Solutions
|
||||||||
|
Corp. – Class A
|
492,237
|
30,828,803
|
||||||
|
Flex, Ltd. (a)
|
829,317
|
18,875,255
|
||||||
|
49,704,058
|
||||||||
|
Total Common Stocks
|
||||||||
|
(Cost $923,083,881)
|
949,477,963
|
|||||||
|
PREFERRED STOCKS – 5.22%
|
||||||||
|
Brazil – 5.22%
|
||||||||
|
Cia Energetica de
|
||||||||
|
Minas Gerais, 12.90%
|
12,575,210
|
25,196,297
|
||||||
|
Itau Unibanco Holding S.A., 3.96%
|
4,042,443
|
19,681,569
|
||||||
|
Petroleo Brasileiro S.A., 40.24%
|
2,052,200
|
10,019,050
|
||||||
|
Total Preferred Stocks
|
||||||||
|
(Cost $53,756,110)
|
54,896,916
|
|||||||
|
SHORT-TERM INVESTMENT – 4.40%
|
||||||||
|
Money Market Fund – 4.40%
|
||||||||
|
Fidelity Institutional Government
|
||||||||
|
Portfolio – Class I, 4.46% (c)
|
46,205,232
|
46,205,232
|
||||||
|
Total Short-Term Investment
|
||||||||
|
(Cost $46,205,232)
|
46,205,232
|
|||||||
|
Total Investments
|
||||||||
|
(Cost $1,023,045,223) – 99.97%
|
1,050,580,111
|
|||||||
|
Other Assets in Excess
|
||||||||
|
of Liabilities – 0.03%
|
328,617
|
|||||||
|
TOTAL NET ASSETS – 100.00%
|
$
|
1,050,908,728
|
||||||
Percentages are stated as a percent of net assets.
|
ADR
|
American Depository Receipt
|
|
|
GDR
|
Global Depository Receipt
|
|
|
NVDR
|
Non-voting Depository Receipt
|
|
|
PJSC
|
Private Joint Stock Company
|
|
|
PLC
|
Public Limited Company
|
|
|
S.A.
|
Société Anonyme
|
|
|
T.A.S.
|
Turk Anonim Şirketi
|
|
|
(a)
|
Non-income producing security.
|
|
|
(b)
|
Value determined using significant unobservable inputs.
|
|
|
(c)
|
The rate listed is the 7-day annualized yield as of February 28, 2023.
|
The accompanying notes are an integral part of these financial statements.
21
Pzena Emerging Markets Value Fund
Portfolio Diversification
February 28, 2023
|
Fair
|
% of
|
|||||||
|
Value
|
Net Assets
|
|||||||
|
COMMON STOCKS
|
||||||||
|
Communication Services
|
$
|
37,381,689
|
3.56
|
%
|
||||
|
Consumer Discretionary
|
151,179,202
|
14.39
|
%
|
|||||
|
Consumer Staples
|
60,842,936
|
5.79
|
%
|
|||||
|
Financials
|
273,560,890
|
26.03
|
%
|
|||||
|
Health Care
|
14,836,957
|
1.41
|
%
|
|||||
|
Industrials
|
52,002,745
|
4.95
|
%
|
|||||
|
Information Technology
|
262,856,003
|
25.01
|
%
|
|||||
|
Materials
|
56,621,681
|
5.39
|
%
|
|||||
|
Real Estate
|
29,155,336
|
2.77
|
%
|
|||||
|
Utilities
|
11,040,524
|
1.05
|
%
|
|||||
|
Total Common Stocks
|
949,477,963
|
90.35
|
%
|
|||||
|
PREFERRED STOCKS
|
||||||||
|
Energy
|
10,019,050
|
0.95
|
%
|
|||||
|
Financials
|
19,681,569
|
1.87
|
%
|
|||||
|
Utilities
|
25,196,297
|
2.40
|
%
|
|||||
|
Total Preferred Stocks
|
54,896,916
|
5.22
|
%
|
|||||
|
Short-Term Investment
|
46,205,232
|
4.40
|
%
|
|||||
|
Total Investments
|
1,050,580,111
|
99.97
|
%
|
|||||
|
Other Assets in
|
||||||||
|
Excess of Liabilities
|
328,617
|
0.03
|
%
|
|||||
|
Total Net Assets
|
$
|
1,050,908,728
|
100.00
|
%
|
||||
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive
property of MSCI, Inc. and Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by Pzena Investment Management, LLC.
The accompanying notes are an integral part of these financial statements.
22
Pzena Small Cap Value Fund
Portfolio Allocation
February 28, 2023
The portfolio’s holdings and allocations are subject to change. The percentages are of total investments as of February 28, 2023.
Note: For presentation purposes, the Fund has grouped some of the industry categories. For purposes of categorizing securities for compliance with Section 8(b)(1) of the Investment Company Act of 1940,
as amended, the Fund uses more specific industry classifications.
23
Pzena Small Cap Value Fund
Schedule of Investments
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
COMMON STOCKS – 94.80%
|
||||||||
|
Basic Materials – 7.41%
|
||||||||
|
Koppers Holdings, Inc.
|
23,782
|
$
|
853,536
|
|||||
|
Olin Corp.
|
49,358
|
2,850,424
|
||||||
|
Orion Engineered Carbons S.A. (b)
|
133,501
|
3,404,276
|
||||||
|
7,108,236
|
||||||||
|
Consumer Discretionary – 13.93%
|
||||||||
|
Adient PLC (a)(b)
|
46,432
|
1,983,575
|
||||||
|
Dana, Inc.
|
182,966
|
2,898,181
|
||||||
|
Gap, Inc.
|
172,359
|
2,242,390
|
||||||
|
Hooker Furnishings Corp.
|
49,360
|
1,085,180
|
||||||
|
Motorcar Parts of America, Inc. (a)
|
60,378
|
790,348
|
||||||
|
PVH Corp.
|
18,875
|
1,514,530
|
||||||
|
Steelcase, Inc. – Class A
|
362,270
|
2,851,065
|
||||||
|
13,365,269
|
||||||||
|
Consumer Staples – 4.56%
|
||||||||
|
Spectrum Brands Holdings, Inc.
|
15,108
|
967,214
|
||||||
|
Universal Corp.
|
33,119
|
1,675,490
|
||||||
|
USANA Health Sciences, Inc. (a)
|
28,567
|
1,736,303
|
||||||
|
4,379,007
|
||||||||
|
Energy – 4.74%
|
||||||||
|
MRC Global, Inc. (a)
|
207,100
|
2,319,520
|
||||||
|
NOV, Inc.
|
102,076
|
2,233,423
|
||||||
|
4,552,943
|
||||||||
|
Financials – 26.87%
|
||||||||
|
American Equity Investment
|
||||||||
|
Life Holding Co.
|
39,525
|
1,646,216
|
||||||
|
Argo Group International
|
||||||||
|
Holdings, Ltd. (b)
|
66,665
|
1,936,618
|
||||||
|
Associated Banc-Corp.
|
113,626
|
2,630,442
|
||||||
|
Axis Capital Holdings, Ltd. (b)
|
43,762
|
2,657,229
|
||||||
|
CNO Financial Group, Inc.
|
154,461
|
3,957,291
|
||||||
|
Hope Bancorp, Inc.
|
131,014
|
1,678,289
|
||||||
|
Old National Bancorp of Indiana
|
140,826
|
2,488,395
|
||||||
|
Umpqua Holdings Corp.
|
122,411
|
2,161,778
|
||||||
|
Univest Financial Corp.
|
66,679
|
1,880,348
|
||||||
|
Webster Financial Corp.
|
54,914
|
2,917,032
|
||||||
|
WSFS Financial Corp.
|
36,601
|
1,826,756
|
||||||
|
25,780,394
|
||||||||
|
Health Care – 2.30%
|
||||||||
|
Phibro Animal Health Corp. – Class A
|
90,272
|
1,418,173
|
||||||
|
Varex Imaging Corp. (a)
|
44,517
|
787,506
|
||||||
|
2,205,679
|
||||||||
|
Industrials – 27.44%
|
||||||||
|
American Woodmark Corp. (a)
|
31,890
|
1,625,752
|
||||||
|
Axalta Coating Systems, Ltd. (a)(b)
|
61,957
|
1,846,319
|
||||||
|
Belden, Inc.
|
32,010
|
2,701,004
|
||||||
|
Enerpac Tool Group Corp.
|
55,239
|
1,487,586
|
||||||
|
GMS, Inc. (a)
|
34,259
|
2,079,864
|
||||||
|
JELD-WEN Holding, Inc. (a)
|
166,633
|
2,191,224
|
||||||
|
Masonite International Corp. (a)(b)
|
28,393
|
2,521,298
|
||||||
|
MasTec, Inc. (a)
|
7,441
|
727,135
|
||||||
|
MasterBrand, Inc. (a)
|
111,522
|
1,086,224
|
||||||
|
Moog, Inc. – Class A
|
9,803
|
966,772
|
||||||
|
REV Group, Inc.
|
141,967
|
1,659,594
|
||||||
|
Terex Corp.
|
50,119
|
2,967,546
|
||||||
|
TriMas Corp.
|
91,452
|
2,742,646
|
||||||
|
TrueBlue, Inc. (a)
|
92,132
|
1,722,868
|
||||||
|
26,325,832
|
||||||||
|
Technology – 7.55%
|
||||||||
|
Avnet, Inc.
|
52,102
|
2,329,480
|
||||||
|
Celestica, Inc. (a)(b)
|
228,463
|
2,958,596
|
||||||
|
ScanSource, Inc. (a)
|
62,602
|
1,951,930
|
||||||
|
7,240,006
|
||||||||
|
Total Common Stocks
|
||||||||
|
(Cost $85,519,186)
|
90,957,366
|
|||||||
|
REIT – 1.25%
|
||||||||
|
Real Estate – 1.25%
|
||||||||
|
DiamondRock Hospitality Co.
|
137,483
|
1,198,852
|
||||||
|
Total REIT
|
||||||||
|
(Cost $1,150,120)
|
1,198,852
|
|||||||
The accompanying notes are an integral part of these financial statements.
24
Pzena Small Cap Value Fund
Schedule of Investments (Continued)
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
SHORT-TERM INVESTMENT – 3.54%
|
||||||||
|
Money Market Fund – 3.54%
|
||||||||
|
Fidelity Institutional Government
|
||||||||
|
Portfolio – Class I, 4.46% (c)
|
3,397,439
|
$
|
3,397,439
|
|||||
|
Total Short-Term Investment
|
||||||||
|
(Cost $3,397,439)
|
3,397,439
|
|||||||
|
Total Investments
|
||||||||
|
(Cost $90,066,745) – 99.59%
|
95,553,657
|
|||||||
|
Other Assets in Excess
|
||||||||
|
of Liabilities – 0.41%
|
392,098
|
|||||||
|
TOTAL NET ASSETS – 100.00%
|
$
|
95,945,755
|
||||||
Percentages are stated as a percent of net assets.
|
PLC
|
Public Limited Company
|
|
|
REIT
|
Real Estate Investment Trust
|
|
|
S.A.
|
Société Anonyme
|
|
|
(a)
|
Non-income producing security.
|
|
|
(b)
|
Foreign issued security.
|
|
|
(c)
|
The rate listed is the 7-day annualized yield as of February 28, 2023.
|
Note: For presentation purposes, the Fund has grouped some of the industry categories. For purposes of categorizing securities for compliance with Section 8(b)(1) of the Investment
Company Act of 1940, as amended, the Fund uses more specific industry classifications.
The accompanying notes are an integral part of these financial statements.
25
Pzena International Small Cap Value Fund
Portfolio Allocation
February 28, 2023
The portfolio’s holdings and allocations are subject to change. The percentages are of total investments as of February 28, 2023.
Note: For presentation purposes, the Fund has grouped some of the industry categories. For purposes of categorizing securities for compliance with Section 8(b)(1) of the Investment Company Act of 1940,
as amended, the Fund uses more specific industry classifications.
26
Pzena International Small Cap Value Fund
Schedule of Investments
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
COMMON STOCKS – 96.51%
|
||||||||
|
Austria – 3.05%
|
||||||||
|
ams-OSRAM AG (a)
|
17,276
|
$
|
134,598
|
|||||
|
ANDRITZ AG
|
6,715
|
415,138
|
||||||
|
549,736
|
||||||||
|
Canada – 5.58%
|
||||||||
|
Celestica, Inc. (a)
|
23,385
|
302,145
|
||||||
|
Linamar Corp.
|
7,014
|
381,671
|
||||||
|
Transcontinental, Inc. – Class A
|
28,136
|
321,672
|
||||||
|
1,005,488
|
||||||||
|
France – 5.92%
|
||||||||
|
Rexel S.A.
|
29,700
|
739,790
|
||||||
|
Societe BIC S.A.
|
5,054
|
327,151
|
||||||
|
1,066,941
|
||||||||
|
Germany – 8.12%
|
||||||||
|
Deutz AG
|
100,854
|
620,837
|
||||||
|
Duerr AG
|
9,134
|
344,898
|
||||||
|
SAF-Holland S.A.
|
31,900
|
398,476
|
||||||
|
Salzgitter AG
|
2,327
|
97,909
|
||||||
|
1,462,120
|
||||||||
|
Hong Kong – 4.75%
|
||||||||
|
Pacific Basin Shipping, Ltd.
|
1,046,000
|
379,787
|
||||||
|
VTech Holdings, Ltd.
|
43,200
|
237,205
|
||||||
|
Yue Yuen Industrial (Holdings), Ltd.
|
161,000
|
237,929
|
||||||
|
854,921
|
||||||||
|
Ireland – 6.89%
|
||||||||
|
Bank of Ireland Group PLC
|
46,988
|
518,361
|
||||||
|
C&C Group PLC (a)
|
149,078
|
267,005
|
||||||
|
Origin Enterprises PLC
|
101,723
|
455,115
|
||||||
|
1,240,481
|
||||||||
|
Israel – 1.97%
|
||||||||
|
Ituran Location and Control, Ltd.
|
15,839
|
353,843
|
||||||
|
Italy – 9.36%
|
||||||||
|
Anima Holding S.p.A.
|
100,361
|
434,160
|
||||||
|
BPER Banca
|
182,770
|
519,439
|
||||||
|
Danieli & C Officine Meccaniche S.p.A.
|
30,258
|
614,473
|
||||||
|
Maire Tecnimont S.p.A.
|
29,282
|
118,311
|
||||||
|
1,686,383
|
||||||||
|
Japan – 20.08%
|
||||||||
|
DIC Corp.
|
15,000
|
267,710
|
||||||
|
Foster Electric Co., Ltd.
|
63,534
|
471,296
|
||||||
|
Fukuoka Financial Group, Inc.
|
21,800
|
486,739
|
||||||
|
Hokkoku Financial Holdings, Inc.
|
5,600
|
171,716
|
||||||
|
Open House Co., Ltd.
|
3,800
|
136,756
|
||||||
|
Sankyu, Inc.
|
9,600
|
353,245
|
||||||
|
Teijin, Ltd.
|
26,100
|
271,246
|
||||||
|
Toho Holdings Co., Ltd.
|
22,600
|
365,504
|
||||||
|
TS Tech Co., Ltd.
|
27,800
|
352,617
|
||||||
|
Tsubakimoto Chain Co.
|
11,100
|
260,064
|
||||||
|
Ube Industries, Ltd.
|
8,700
|
130,479
|
||||||
|
Zeon Corp.
|
37,000
|
350,013
|
||||||
|
3,617,385
|
||||||||
|
Netherlands – 3.94%
|
||||||||
|
Flow Traders Ltd.
|
3,331
|
80,822
|
||||||
|
Koninklijke BAM Groep N.V. (a)
|
93,092
|
238,478
|
||||||
|
Technip Energies N.V.
|
15,377
|
298,448
|
||||||
|
Technip Energies N.V. – ADR
|
4,760
|
91,963
|
||||||
|
709,711
|
||||||||
|
Norway – 2.56%
|
||||||||
|
Subsea 7 S.A.
|
35,404
|
461,267
|
||||||
|
Republic of Korea – 5.46%
|
||||||||
|
DB Insurance Co., Ltd.
|
8,773
|
510,501
|
||||||
|
Hankook Tire & Technology Co., Ltd.
|
15,184
|
426,862
|
||||||
|
Woink IPS Co., Ltd.
|
1,936
|
45,428
|
||||||
|
982,791
|
||||||||
|
Spain – 4.44%
|
||||||||
|
Cia de Distribucion Integral
|
||||||||
|
Logista Holdings S.A.
|
16,352
|
395,029
|
||||||
|
Unicaja Banco S.A.
|
316,539
|
405,111
|
||||||
|
800,140
|
||||||||
|
Taiwan – 0.97%
|
||||||||
|
Elite Material Co., Ltd.
|
28,000
|
175,060
|
||||||
|
United Kingdom – 13.42%
|
||||||||
|
Balfour Beatty PLC
|
86,470
|
379,430
|
||||||
|
Direct Line Insurance Group PLC
|
121,607
|
263,807
|
||||||
|
Inchcape PLC
|
14,997
|
164,156
|
||||||
|
John Wood Group PLC (a)
|
82,736
|
194,510
|
||||||
|
Sabre Insurance Group PLC
|
377,765
|
454,394
|
||||||
|
Senior PLC
|
333,385
|
668,887
|
||||||
|
Travis Perkins PLC
|
9,301
|
112,324
|
||||||
|
Wizz Air Holdings PLC (a)
|
5,794
|
179,808
|
||||||
|
2,417,316
|
||||||||
|
Total Common Stocks
|
||||||||
|
(Cost $16,669,472)
|
17,383,583
|
|||||||
The accompanying notes are an integral part of these financial statements.
27
Pzena International Small Cap Value Fund
Schedule of Investments (Continued)
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
SHORT-TERM INVESTMENT – 4.17%
|
||||||||
|
Money Market Fund – 4.17%
|
||||||||
|
Fidelity Institutional Government
|
||||||||
|
Portfolio – Class I, 4.46% (b)
|
751,701
|
$
|
751,701
|
|||||
|
Total Short-Term Investment
|
||||||||
|
(Cost $751,701)
|
751,701
|
|||||||
|
Total Investments
|
||||||||
|
(Cost $17,421,173) – 100.68%
|
18,135,284
|
|||||||
|
Liabilities in Excess
|
||||||||
|
of Other Assets – (0.68)%
|
(122,403
|
)
|
||||||
|
TOTAL NET ASSETS – 100.00%
|
$
|
18,012,881
|
||||||
Percentages are stated as a percent of net assets.
|
ADR
|
American Depositary Receipt
|
|
|
AG
|
Aktiengesellschaft
|
|
|
N.V.
|
Naamloze Vennootschap
|
|
|
PLC
|
Public Limited Company
|
|
|
S.A.
|
Société Anonyme
|
|
|
S.p.A
|
Società per azioni
|
|
|
(a)
|
Non-income producing security.
|
|
|
(b)
|
The rate listed is the 7-day annualized yield as of February 28, 2023.
|
The accompanying notes are an integral part of these financial statements.
28
Pzena International Small Cap Value Fund
Portfolio Diversification
February 28, 2023
|
Fair
|
% of
|
|||||||
|
Value
|
Net Assets
|
|||||||
|
COMMON STOCKS
|
||||||||
|
Consumer Discretionary
|
$
|
2,569,763
|
14.27
|
%
|
||||
|
Consumer Staples
|
722,120
|
4.01
|
%
|
|||||
|
Energy
|
1,046,188
|
5.81
|
%
|
|||||
|
Financials
|
3,845,050
|
21.34
|
%
|
|||||
|
Health Care
|
365,504
|
2.03
|
%
|
|||||
|
Industrials
|
6,147,650
|
34.13
|
%
|
|||||
|
Information Technology
|
1,248,279
|
6.93
|
%
|
|||||
|
Materials
|
1,439,029
|
7.99
|
%
|
|||||
|
Total Common Stocks
|
17,383,583
|
96.51
|
%
|
|||||
|
Short-Term Investment
|
751,701
|
4.17
|
%
|
|||||
|
Total Investments
|
18,135,284
|
100.68
|
%
|
|||||
|
Liabilities in Excess
|
||||||||
|
of Other Assets
|
(122,403
|
)
|
(0.68
|
)%
|
||||
|
Total Net Assets
|
$
|
18,012,881
|
100.00
|
%
|
||||
Note: For presentation purposes, the Fund has grouped some of the industry categories. For purposes of categorizing securities for compliance with Section 8(b)(1) of the Investment Company Act of 1940,
as amended, the Fund uses more specific industry classifications.
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and
Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by Pzena Investment Management, LLC.
The accompanying notes are an integral part of these financial statements.
29
Pzena International Value Fund
Portfolio Allocation
February 28, 2023
The portfolio’s holdings and allocations are subject to change. The percentages are of total investments as of February 28, 2023.
30
Pzena International Value Fund
Schedule of Investments
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
COMMON STOCKS – 95.15%
|
||||||||
|
Brazil – 2.05%
|
||||||||
|
Ambev S.A. (a)
|
333,000
|
$
|
854,213
|
|||||
|
Ambev S.A. – ADR
|
13,543
|
34,535
|
||||||
|
888,748
|
||||||||
|
Canada – 0.88%
|
||||||||
|
Magna International, Inc.
|
3,600
|
200,645
|
||||||
|
Magna International, Inc. – ADR
|
3,230
|
180,008
|
||||||
|
380,653
|
||||||||
|
China – 3.25%
|
||||||||
|
Alibaba Group Holding, Ltd. (a)
|
65,900
|
726,215
|
||||||
|
Alibaba Group Holding, Ltd. – ADR (a)
|
563
|
49,426
|
||||||
|
Trip.com Group, Ltd. – ADR (a)
|
17,831
|
633,892
|
||||||
|
1,409,533
|
||||||||
|
Denmark – 1.37%
|
||||||||
|
Danske Bank A/S
|
25,554
|
593,544
|
||||||
|
Finland – 2.17%
|
||||||||
|
Nokia Oyj
|
107,014
|
495,709
|
||||||
|
Nokia Oyj – ADR
|
96,837
|
445,450
|
||||||
|
941,159
|
||||||||
|
France – 16.37%
|
||||||||
|
Accor S.A. (a)
|
31,200
|
1,038,845
|
||||||
|
Amundi S.A.
|
18,641
|
1,230,312
|
||||||
|
Bouygues S.A.
|
11,875
|
402,427
|
||||||
|
Cie Generale des Etablissements
|
||||||||
|
Michelin SCA
|
41,773
|
1,313,787
|
||||||
|
Publicis Groupe S.A.
|
6,244
|
496,905
|
||||||
|
Rexel S.A.
|
62,466
|
1,555,952
|
||||||
|
Sanofi
|
11,347
|
1,066,830
|
||||||
|
7,105,058
|
||||||||
|
Germany – 11.11%
|
||||||||
|
BASF SE
|
20,282
|
1,039,896
|
||||||
|
Bayer AG
|
7,506
|
446,891
|
||||||
|
Covestro AG
|
30,793
|
1,356,527
|
||||||
|
Daimler Truck Holding AG (a)
|
32,760
|
1,040,025
|
||||||
|
Fresenius Medical Care AG & Co. KGaA
|
18,558
|
724,693
|
||||||
|
Siemens AG
|
1,389
|
212,585
|
||||||
|
4,820,617
|
||||||||
|
Hong Kong – 1.76%
|
||||||||
|
Galaxy Entertainment Group, Ltd.
|
115,000
|
764,772
|
||||||
|
Ireland – 1.60%
|
||||||||
|
Bank of Ireland Group PLC
|
62,832
|
693,149
|
||||||
|
Italy – 2.06%
|
||||||||
|
Enel S.p.A
|
159,051
|
894,467
|
||||||
|
Japan – 14.68%
|
||||||||
|
Bridgestone Corp.
|
5,800
|
222,577
|
||||||
|
Fukuoka Financial Group, Inc.
|
13,600
|
303,654
|
||||||
|
Honda Motor Co., Ltd.
|
7,000
|
182,101
|
||||||
|
Iida Group Holdings Co., Ltd.
|
10,800
|
179,504
|
||||||
|
Isuzu Motors, Ltd.
|
44,200
|
528,822
|
||||||
|
Komatsu, Ltd.
|
45,100
|
1,079,843
|
||||||
|
Komatsu, Ltd. – ADR (a)
|
4,000
|
95,680
|
||||||
|
Minebea Mitsumi, Inc.
|
16,500
|
286,240
|
||||||
|
Mitsui & Co., Ltd.
|
8,300
|
233,111
|
||||||
|
MS&AD Insurance
|
||||||||
|
Group Holdings, Inc. (a)
|
6,100
|
199,458
|
||||||
|
Resona Holdings, Inc.
|
133,100
|
733,074
|
||||||
|
Subaru Corp.
|
51,200
|
822,592
|
||||||
|
Sumitomo Mitsui Financial Group, Inc.
|
5,000
|
219,309
|
||||||
|
T&D Holdings, Inc.
|
13,400
|
202,838
|
||||||
|
Takeda Pharmaceutical Co., Ltd.
|
19,200
|
593,958
|
||||||
|
Toray Industries, Inc.
|
85,000
|
486,446
|
||||||
|
6,369,207
|
||||||||
|
Luxembourg – 2.02%
|
||||||||
|
ArcelorMittal S.A.
|
29,094
|
875,328
|
||||||
|
Netherlands – 6.92%
|
||||||||
|
ING Groep N.V.
|
81,869
|
1,148,738
|
||||||
|
Koninklijke Philips N.V.
|
36,602
|
598,129
|
||||||
|
Randstad N.V.
|
20,452
|
1,256,820
|
||||||
|
3,003,687
|
||||||||
|
Republic of Korea – 1.57%
|
||||||||
|
Samsung Electronics Co Ltd.
|
8,380
|
383,773
|
||||||
|
Shinhan Financial
|
||||||||
|
Group Co., Ltd. – ADR
|
10,210
|
298,847
|
||||||
|
682,620
|
||||||||
|
Singapore – 0.67%
|
||||||||
|
DBS Group Holdings, Ltd.
|
11,400
|
288,878
|
||||||
|
Spain – 2.05%
|
||||||||
|
CaixaBank S.A.
|
207,594
|
889,704
|
||||||
|
Switzerland – 5.94%
|
||||||||
|
Julius Baer Group, Ltd.
|
8,025
|
531,336
|
||||||
|
Roche Holding AG
|
3,304
|
953,472
|
||||||
|
UBS Group AG
|
50,327
|
1,092,729
|
||||||
|
2,577,537
|
||||||||
The accompanying notes are an integral part of these financial statements.
31
Pzena International Value Fund
Schedule of Investments (Continued)
February 28, 2023
|
Shares
|
Fair Value
|
|||||||
|
COMMON STOCKS – 95.15% (Continued)
|
||||||||
|
Taiwan – 1.90%
|
||||||||
|
Hon Hai Precision
|
||||||||
|
Industry Co., Ltd. – GDR
|
127,000
|
$
|
826,072
|
|||||
|
United Kingdom – 16.78%
|
||||||||
|
Aviva PLC
|
73,334
|
393,768
|
||||||
|
Barclays PLC
|
245,713
|
516,158
|
||||||
|
HSBC Holdings PLC
|
112,586
|
860,754
|
||||||
|
J Sainsbury PLC
|
311,903
|
1,006,211
|
||||||
|
John Wood Group PLC (a)
|
150,824
|
354,582
|
||||||
|
NatWest Group PLC
|
116,680
|
410,238
|
||||||
|
Reckitt Benckiser Group PLC
|
4,454
|
308,699
|
||||||
|
Shell PLC – Class A
|
35,040
|
1,069,045
|
||||||
|
Standard Chartered PLC
|
63,737
|
601,215
|
||||||
|
Tesco PLC
|
240,362
|
737,254
|
||||||
|
Travis Perkins PLC
|
63,234
|
763,652
|
||||||
|
Vodafone Group PLC
|
217,082
|
260,542
|
||||||
|
7,282,118
|
||||||||
|
Total Common Stocks
|
||||||||
|
(Cost $38,530,962)
|
41,286,851
|
|||||||
|
PREFERRED STOCK – 1.60%
|
||||||||
|
Germany – 1.60%
|
||||||||
|
Volkswagen AG, 20.58%
|
5,091
|
695,493
|
||||||
|
Total Preferred Stock
|
||||||||
|
(Cost $912,354)
|
695,493
|
|||||||
|
SHORT-TERM INVESTMENT – 2.49%
|
||||||||
|
Money Market Fund – 2.49%
|
||||||||
|
Fidelity Institutional Government
|
||||||||
|
Portfolio – Class I, 4.46% (b)
|
1,081,318
|
1,081,318
|
||||||
|
Total Short-Term Investment
|
||||||||
|
(Cost $1,081,318)
|
1,081,318
|
|||||||
|
Total Investments
|
||||||||
|
(Cost $40,524,634) – 99.24%
|
43,063,662
|
|||||||
|
Other Assets in Excess
|
||||||||
|
of Liabilities – 0.76%
|
329,435
|
|||||||
|
TOTAL NET ASSETS – 100.00%
|
$
|
43,393,097
|
||||||
Percentages are stated as a percent of net assets.
|
A/S
|
Aktieselskab
|
|
|
ADR
|
American Depository Receipt
|
|
|
AG
|
Aktiengesellschaft
|
|
|
GDR
|
Global Depository Receipt
|
|
|
KGaA
|
Kommanditgesellschaft Auf Aktien
|
|
|
N.V.
|
Naamloze Vennootschap
|
|
|
Oyj
|
Julkinen osakeyhtiö
|
|
|
PLC
|
Public Limited Company
|
|
|
S.A.
|
Société Anonyme
|
|
|
S.p.A
|
Società per azioni
|
|
|
SCA
|
Société en Commandite par Actions
|
|
|
SE
|
Societas Europea
|
|
|
(a)
|
Non-income producing security.
|
|
|
(b)
|
The rate listed is the 7-day annualized yield as of February 28, 2023.
|
The accompanying notes are an integral part of these financial statements.
32
Pzena International Value Fund
Portfolio Diversification
February 28, 2023
|
Fair
|
% of
|
|||||||
|
Value
|
Net Assets
|
|||||||
|
COMMON STOCKS
|
||||||||
|
Communication Services
|
$
|
757,447
|
1.75
|
%
|
||||
|
Consumer Discretionary
|
6,843,186
|
15.77
|
%
|
|||||
|
Consumer Staples
|
2,940,912
|
6.78
|
%
|
|||||
|
Energy
|
1,423,627
|
3.28
|
%
|
|||||
|
Financials
|
11,207,703
|
25.83
|
%
|
|||||
|
Health Care
|
4,383,973
|
10.10
|
%
|
|||||
|
Industrials
|
6,926,335
|
15.96
|
%
|
|||||
|
Information Technology
|
2,151,004
|
4.96
|
%
|
|||||
|
Materials
|
3,758,197
|
8.66
|
%
|
|||||
|
Utilities
|
894,467
|
2.06
|
%
|
|||||
|
Total Common Stocks
|
41,286,851
|
95.15
|
%
|
|||||
|
PREFERRED STOCK
|
||||||||
|
Consumer Discretionary
|
695,493
|
1.60
|
%
|
|||||
|
Total Preferred Stock
|
695,493
|
1.60
|
%
|
|||||
|
Short-Term Investment
|
1,081,318
|
2.49
|
%
|
|||||
|
Total Investments
|
43,063,662
|
99.24
|
%
|
|||||
|
Other Assets in
|
||||||||
|
Excess of Liabilities
|
329,435
|
0.76
|
%
|
|||||
|
Total Net Assets
|
$
|
43,393,097
|
100.00
|
%
|
||||
The Global Industry Classification Standard (GICS®) was developed by and/or is the exclusive property of MSCI, Inc. and
Standard & Poor’s Financial Services LLC (“S&P”). GICS is a service mark of MSCI and S&P and has been licensed for use by Pzena Investment Management, LLC.
The accompanying notes are an integral part of these financial statements.
33
Pzena Funds
Statements of Assets and Liabilities
February 28, 2023
|
PZENA
|
||||||||||||
|
PZENA
|
EMERGING
|
PZENA
|
||||||||||
|
MID CAP
|
MARKETS
|
SMALL CAP
|
||||||||||
|
VALUE FUND
|
VALUE FUND
|
VALUE FUND
|
||||||||||
|
ASSETS:
|
||||||||||||
|
Investments in securities, at value
|
||||||||||||
|
(cost $107,571,573, $1,023,045,223, and $90,066,745, respectively)
|
$
|
134,330,586
|
$
|
1,050,580,111
|
$
|
95,553,657
|
||||||
|
Cash
|
31
|
—
|
—
|
|||||||||
|
Foreign currency, at value (cost $0, $1,221,739, and $0, respectively)
|
—
|
1,211,351
|
—
|
|||||||||
|
Receivables:
|
||||||||||||
|
Fund shares sold
|
8,298
|
1,353,748
|
100,478
|
|||||||||
|
Securities sold
|
345,375
|
77,200
|
421,616
|
|||||||||
|
Dividends and interest
|
336,221
|
4,991,903
|
89,555
|
|||||||||
|
Dividend tax reclaim
|
6,917
|
3,868
|
—
|
|||||||||
|
Prepaid expenses
|
26,443
|
62,480
|
19,747
|
|||||||||
|
Total assets
|
135,053,871
|
1,058,280,661
|
96,185,053
|
|||||||||
|
LIABILITIES:
|
||||||||||||
|
Payables:
|
||||||||||||
|
Securities purchased
|
—
|
5,710,635
|
100,835
|
|||||||||
|
Fund shares redeemed
|
27,548
|
623,332
|
23,436
|
|||||||||
|
Due to Adviser (Note 4)
|
77,226
|
727,110
|
54,567
|
|||||||||
|
Audit fees
|
22,500
|
22,500
|
22,500
|
|||||||||
|
Administration fees
|
12,723
|
103,562
|
14,865
|
|||||||||
|
12b-1 distribution fees – Investor Class
|
8,049
|
34,265
|
7,047
|
|||||||||
|
Transfer agent fees and expenses
|
7,775
|
13,070
|
9,466
|
|||||||||
|
Chief Compliance Officer fee
|
2,250
|
2,250
|
2,250
|
|||||||||
|
Custody fees
|
1,662
|
120,505
|
1,793
|
|||||||||
|
Shareholder reporting
|
1,173
|
10,813
|
865
|
|||||||||
|
Shareholder servicing fees – Investor Class
|
529
|
2,919
|
224
|
|||||||||
|
Fund accounting fees
|
344
|
740
|
400
|
|||||||||
|
Legal fees
|
232
|
232
|
232
|
|||||||||
|
Miscellaneous
|
177
|
—
|
818
|
|||||||||
|
Total liabilities
|
162,188
|
7,371,933
|
239,298
|
|||||||||
|
NET ASSETS
|
$
|
134,891,683
|
$
|
1,050,908,728
|
$
|
95,945,755
|
||||||
|
NET ASSETS CONSIST OF:
|
||||||||||||
|
Paid-in capital
|
$
|
105,956,501
|
$
|
1,039,790,658
|
$
|
90,935,865
|
||||||
|
Total distributable earnings
|
28,935,182
|
11,118,070
|
5,009,890
|
|||||||||
|
Net assets
|
$
|
134,891,683
|
$
|
1,050,908,728
|
$
|
95,945,755
|
||||||
|
CALCULATION OF NET ASSET VALUE PER SHARE
|
||||||||||||
|
Investor Class:
|
||||||||||||
|
Net assets
|
$
|
6,666,752
|
$
|
36,799,974
|
$
|
4,132,206
|
||||||
|
Shares outstanding [unlimited number of shares (par value $0.01) authorized]
|
467,005
|
3,345,868
|
320,345
|
|||||||||
|
Net asset value, offering and redemption price per share
|
$
|
14.28
|
$
|
11.00
|
$
|
12.90
|
||||||
|
Institutional Class:
|
||||||||||||
|
Net assets
|
$
|
128,224,931
|
$
|
1,014,108,754
|
$
|
91,813,549
|
||||||
|
Shares outstanding [unlimited number of shares (par value $0.01) authorized]
|
9,113,712
|
91,867,786
|
7,077,689
|
|||||||||
|
Net asset value, offering and redemption price per share
|
$
|
14.07
|
$
|
11.04
|
$
|
12.97
|
||||||
The accompanying notes are an integral part of these financial statements.
34
Pzena Funds
Statements of Assets and Liabilities (Continued)
February 28, 2023
|
PZENA
|
||||||||
|
INTERNATIONAL
|
PZENA
|
|||||||
|
SMALL CAP
|
INTERNATIONAL
|
|||||||
|
VALUE FUND
|
VALUE FUND
|
|||||||
|
ASSETS:
|
||||||||
|
Investments in securities, at value (cost $17,421,173 and $40,524,634, respectively)
|
$
|
18,135,284
|
$
|
43,063,662
|
||||
|
Foreign currency, at value (cost $216 and $4, respectively)
|
189
|
4
|
||||||
|
Receivables:
|
||||||||
|
Fund shares sold
|
1,997
|
306,461
|
||||||
|
Securities sold
|
19,820
|
19,900
|
||||||
|
Dividends and interest
|
33,598
|
44,992
|
||||||
|
Dividend tax reclaim
|
12,003
|
63,068
|
||||||
|
Due from Adviser (Note 4)
|
1,348
|
—
|
||||||
|
Prepaid expenses
|
6,974
|
431
|
||||||
|
Total assets
|
18,211,213
|
43,498,518
|
||||||
|
LIABILITIES:
|
||||||||
|
Payables:
|
||||||||
|
Securities purchased
|
86,515
|
36,606
|
||||||
|
Fund shares redeemed
|
54,174
|
2,635
|
||||||
|
Due to Adviser (Note 4)
|
—
|
4,220
|
||||||
|
Audit fees
|
22,500
|
22,500
|
||||||
|
Administration fees
|
20,314
|
20,365
|
||||||
|
12b-1 distribution fees – Investor Class
|
—
|
257
|
||||||
|
Transfer agent fees and expenses
|
6,470
|
6,669
|
||||||
|
Chief Compliance Officer fee
|
2,250
|
2,250
|
||||||
|
Custody fees
|
3,440
|
7,232
|
||||||
|
Shareholder reporting
|
223
|
262
|
||||||
|
Shareholder servicing fees – Investor Class
|
48
|
15
|
||||||
|
Fund accounting fees
|
1,886
|
861
|
||||||
|
Legal fees
|
232
|
232
|
||||||
|
Miscellaneous
|
280
|
1,317
|
||||||
|
Total liabilities
|
198,332
|
105,421
|
||||||
|
NET ASSETS
|
$
|
18,012,881
|
$
|
43,393,097
|
||||
|
NET ASSETS CONSIST OF:
|
||||||||
|
Paid-in capital
|
$
|
17,374,874
|
$
|
41,609,010
|
||||
|
Total distributable earnings
|
638,007
|
1,784,087
|
||||||
|
Net assets
|
$
|
18,012,881
|
$
|
43,393,097
|
||||
|
CALCULATION OF NET ASSET VALUE PER SHARE
|
||||||||
|
Investor Class:
|
||||||||
|
Net assets
|
$
|
1,589,318
|
$
|
968,789
|
||||
|
Shares outstanding [unlimited number of shares (par value $0.01) authorized]
|
149,648
|
102,206
|
||||||
|
Net asset value, offering and redemption price per share
|
$
|
10.62
|
$
|
9.48
|
||||
|
Institutional Class:
|
||||||||
|
Net assets
|
$
|
16,423,563
|
$
|
42,424,308
|
||||
|
Shares outstanding [unlimited number of shares (par value $0.01) authorized]
|
1,543,496
|
4,473,226
|
||||||
|
Net asset value, offering and redemption price per share
|
$
|
10.64
|
$
|
9.48
|
||||
The accompanying notes are an integral part of these financial statements.
35
Pzena Funds
Statements of Operations
For the Year Ended February 28, 2023
|
PZENA
|
||||||||||||
|
PZENA
|
EMERGING
|
PZENA
|
||||||||||
|
MID CAP
|
MARKETS
|
SMALL CAP
|
||||||||||
|
VALUE FUND
|
VALUE FUND
|
VALUE FUND
|
||||||||||
|
INVESTMENT INCOME:
|
||||||||||||
|
Dividends (net of foreign taxes withheld and
|
||||||||||||
|
issuance fees of $45,503, $3,163,800, and $2,071, respectively)
|
$
|
2,958,122
|
$
|
28,213,363
|
$
|
1,820,956
|
||||||
|
Interest income
|
66,295
|
822,943
|
35,333
|
|||||||||
|
Total investment income
|
3,024,417
|
29,036,306
|
1,856,289
|
|||||||||
|
EXPENSES:
|
||||||||||||
|
Investment advisory fees (Note 4)
|
1,010,329
|
7,071,092
|
980,352
|
|||||||||
|
Administration fees (Note 4)
|
72,606
|
288,707
|
74,812
|
|||||||||
|
Federal and state registration fees
|
33,661
|
61,653
|
37,448
|
|||||||||
|
Transfer agent fees and expenses (Note 4)
|
30,980
|
56,040
|
38,177
|
|||||||||
|
12b-1 distribution fees – Investor Class (Note 5)
|
23,298
|
72,857
|
9,053
|
|||||||||
|
Audit fees
|
22,500
|
22,500
|
22,500
|
|||||||||
|
Trustee fees and expenses
|
13,230
|
13,231
|
13,230
|
|||||||||
|
Custody fees (Note 4)
|
10,616
|
544,260
|
10,472
|
|||||||||
|
Chief Compliance Officer fees (Note 4)
|
9,000
|
9,000
|
9,000
|
|||||||||
|
Shareholder servicing fees – Investor Class (Note 6)
|
8,757
|
28,594
|
1,998
|
|||||||||
|
Interest expense (Note 9)
|
7,267
|
—
|
9,313
|
|||||||||
|
Legal fees
|
6,711
|
6,711
|
6,913
|
|||||||||
|
Reports to shareholders
|
6,372
|
19,257
|
7,287
|
|||||||||
|
Insurance expense
|
3,441
|
7,983
|
3,153
|
|||||||||
|
Fund accounting fees (Note 4)
|
1,293
|
2,841
|
1,518
|
|||||||||
|
Other expenses
|
6,943
|
20,430
|
6,909
|
|||||||||
|
Total expenses before advisory fee waiver
|
1,267,004
|
8,225,156
|
1,232,135
|
|||||||||
|
Advisory fee waiver (Note 4)
|
(98,328
|
)
|
(485,364
|
)
|
(159,587
|
)
|
||||||
|
Net expenses
|
1,168,676
|
7,739,792
|
1,072,548
|
|||||||||
|
NET INVESTMENT INCOME
|
1,855,741
|
21,296,514
|
783,741
|
|||||||||
|
REALIZED AND UNREALIZED GAIN/(LOSS):
|
||||||||||||
|
Net realized gain/(loss) on transactions from:
|
||||||||||||
|
Investments
|
15,554,123
|
(17,883,049
|
)
|
14,730,376
|
||||||||
|
Foreign currency
|
(33
|
)
|
(782,073
|
)
|
—
|
|||||||
|
Net change in unrealized appreciation/(depreciation) from:
|
||||||||||||
|
Investments
|
(15,205,505
|
)
|
(240,049
|
)
|
(12,359,658
|
)
|
||||||
|
Foreign currency
|
(6
|
)
|
(159,308
|
)
|
—
|
|||||||
|
Net gain/(loss) on investments and foreign currency
|
348,579
|
(19,064,479
|
)
|
2,370,718
|
||||||||
|
NET INCREASE IN NET ASSETS
|
||||||||||||
|
RESULTING FROM OPERATIONS
|
$
|
2,204,320
|
$
|
2,232,035
|
$
|
3,154,459
|
||||||
The accompanying notes are an integral part of these financial statements.
36
Pzena Funds
Statements of Operations (Continued)
For the Year Ended February 28, 2023
|
PZENA
|
||||||||
|
INTERNATIONAL
|
PZENA
|
|||||||
|
SMALL CAP
|
INTERNATIONAL
|
|||||||
|
VALUE FUND
|
VALUE FUND
|
|||||||
|
INVESTMENT INCOME:
|
||||||||
|
Dividends (net of foreign taxes withheld and issuance fees of $48,259 and $147,508, respectively)
|
$
|
472,598
|
$
|
1,062,078
|
||||
|
Interest income
|
13,206
|
25,390
|
||||||
|
Total investment income
|
485,804
|
1,087,468
|
||||||
|
EXPENSES:
|
||||||||
|
Investment advisory fees (Note 4)
|
146,412
|
206,488
|
||||||
|
Administration fees (Note 4)
|
81,152
|
81,511
|
||||||
|
Federal and state registration fees
|
32,250
|
42,654
|
||||||
|
Transfer agent fees and expenses (Note 4)
|
25,750
|
26,453
|
||||||
|
12b-1 distribution fees – Investor Class (Note 5)
|
3,448
|
2,177
|
||||||
|
Audit fees
|
22,500
|
22,500
|
||||||
|
Trustee fees and expenses
|
15,400
|
14,260
|
||||||
|
Custody fees (Note 4)
|
11,159
|
44,266
|
||||||
|
Chief Compliance Officer fees (Note 4)
|
9,000
|
9,000
|
||||||
|
Shareholder servicing fees – Investor Class (Note 6)
|
417
|
40
|
||||||
|
Legal fees
|
6,520
|
6,460
|
||||||
|
Reports to shareholders
|
3,678
|
4,623
|
||||||
|
Insurance expense
|
2,112
|
1,729
|
||||||
|
Fund accounting fees (Note 4)
|
2,894
|
3,296
|
||||||
|
Other expenses
|
8,042
|
7,197
|
||||||
|
Total expenses before advisory fee waiver and expense reimbursement
|
370,734
|
472,654
|
||||||
|
Advisory fee waiver and expense reimbursement (Note 4)
|
(195,567
|
)
|
(235,358
|
)
|
||||
|
Net expenses
|
175,167
|
237,296
|
||||||
|
NET INVESTMENT INCOME
|
310,637
|
850,172
|
||||||
|
REALIZED AND UNREALIZED GAIN/(LOSS):
|
||||||||
|
Net realized gain/(loss) on transactions from:
|
||||||||
|
Investments
|
69,658
|
(786,308
|
)
|
|||||
|
Foreign currency
|
(13,509
|
)
|
(15,362
|
)
|
||||
|
Net change in unrealized appreciation/(depreciation) from:
|
||||||||
|
Investments
|
1,324,717
|
2,896,168
|
||||||
|
Foreign currency
|
(1,113
|
)
|
(979
|
)
|
||||
|
Net gain on investments and foreign currency
|
1,379,753
|
2,093,519
|
||||||
|
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
|
$
|
1,690,390
|
$
|
2,943,691
|
||||
The accompanying notes are an integral part of these financial statements.
37
Pzena Mid Cap Value Fund
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
|
February 28,
|
February 28,
|
|||||||
|
2023
|
2022
|
|||||||
|
INCREASE/(DECREASE) IN NET ASSETS FROM:
|
||||||||
|
OPERATIONS:
|
||||||||
|
Net investment income
|
$
|
1,855,741
|
$
|
1,328,926
|
||||
|
Net realized gain/(loss) from:
|
||||||||
|
Investments
|
15,554,123
|
15,857,002
|
||||||
|
Foreign currency
|
(33
|
)
|
(14
|
)
|
||||
|
Change in unrealized appreciation/(depreciation) on:
|
||||||||
|
Investments
|
(15,205,505
|
)
|
3,433,674
|
|||||
|
Foreign currency
|
(6
|
)
|
—
|
|||||
|
Net increase in net assets resulting from operations
|
2,204,320
|
20,619,588
|
||||||
|
DISTRIBUTIONS:
|
||||||||
|
Net dividends and distributions to shareholders – Investor Class
|
(1,082,994
|
)
|
(1,186,537
|
)
|
||||
|
Net dividends and distributions to shareholders – Institutional Class
|
(15,897,427
|
)
|
(11,162,005
|
)
|
||||
|
Net decrease in net assets resulting from distributions paid
|
(16,980,421
|
)
|
(12,348,542
|
)
|
||||
|
CAPITAL SHARE TRANSACTIONS:
|
||||||||
|
Proceeds from shares subscribed – Investor Class
|
436,447
|
10,470,070
|
||||||
|
Proceeds from shares subscribed – Institutional Class
|
25,089,255
|
18,384,935
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Investor Class
|
1,004,419
|
1,127,310
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Institutional Class
|
8,871,842
|
6,191,942
|
||||||
|
Payments for shares redeemed – Investor Class
|
(5,535,811
|
)
|
(9,433,029
|
)
|
||||
|
Payments for shares redeemed – Institutional Class
|
(16,058,473
|
)
|
(17,019,600
|
)
|
||||
|
Net increase in net assets derived from capital share transactions
|
13,807,679
|
9,721,628
|
||||||
|
TOTAL INCREASE/(DECREASE) IN NET ASSETS
|
(968,422
|
)
|
17,992,674
|
|||||
|
NET ASSETS:
|
||||||||
|
Beginning of year
|
135,860,105
|
117,867,431
|
||||||
|
End of year
|
$
|
134,891,683
|
$
|
135,860,105
|
||||
|
CHANGES IN SHARES OUTSTANDING:
|
||||||||
|
Shares sold – Investor Class
|
30,554
|
632,535
|
||||||
|
Shares sold – Institutional Class
|
1,772,714
|
1,122,503
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Investor Class
|
75,920
|
73,681
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Institutional Class
|
680,878
|
410,063
|
||||||
|
Shares redeemed – Investor Class
|
(379,887
|
)
|
(562,064
|
)
|
||||
|
Shares redeemed – Institutional Class
|
(1,124,758
|
)
|
(1,068,684
|
)
|
||||
|
Net increase in shares outstanding
|
1,055,421
|
608,034
|
||||||
The accompanying notes are an integral part of these financial statements.
38
Pzena Emerging Markets Value Fund
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
|
February 28,
|
February 28,
|
|||||||
|
2023
|
2022
|
|||||||
|
INCREASE/(DECREASE) IN NET ASSETS FROM:
|
||||||||
|
OPERATIONS:
|
||||||||
|
Net investment income
|
$
|
21,296,514
|
$
|
9,821,670
|
||||
|
Net realized gain/(loss) from:
|
||||||||
|
Investments
|
(17,883,049
|
)
|
8,803,139
|
|||||
|
Foreign currency
|
(782,073
|
)
|
(351,380
|
)
|
||||
|
Change in unrealized appreciation/(depreciation) on:
|
||||||||
|
Investments
|
(240,049
|
)
|
(20,467,170
|
)
|
||||
|
Foreign currency
|
(159,308
|
)
|
102,668
|
|||||
|
Net increase/(decrease) in net assets resulting from operations
|
2,232,035
|
(2,091,073
|
)
|
|||||
|
DISTRIBUTIONS:
|
||||||||
|
Net dividends and distributions to shareholders – Investor Class
|
(585,945
|
)
|
(510,167
|
)
|
||||
|
Net dividends and distributions to shareholders – Institutional Class
|
(18,017,824
|
)
|
(13,454,757
|
)
|
||||
|
Net decrease in net assets resulting from distributions paid
|
(18,603,769
|
)
|
(13,964,924
|
)
|
||||
|
CAPITAL SHARE TRANSACTIONS:
|
||||||||
|
Proceeds from shares subscribed – Investor Class
|
29,917,010
|
19,609,951
|
||||||
|
Proceeds from shares subscribed – Institutional Class
|
692,225,655
|
206,107,099
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Investor Class
|
571,987
|
505,421
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Institutional Class
|
12,277,850
|
10,598,943
|
||||||
|
Payments for shares redeemed – Investor Class
|
(15,068,732
|
)
|
(15,224,590
|
)
|
||||
|
Payments for shares redeemed – Institutional Class
|
(212,449,963
|
)
|
(67,142,636
|
)
|
||||
|
Net increase in net assets derived from capital share transactions
|
507,473,807
|
154,454,188
|
||||||
|
TOTAL INCREASE IN NET ASSETS
|
491,102,073
|
138,398,191
|
||||||
|
NET ASSETS:
|
||||||||
|
Beginning of year
|
559,806,655
|
421,408,464
|
||||||
|
End of year
|
$
|
1,050,908,728
|
$
|
559,806,655
|
||||
|
CHANGES IN SHARES OUTSTANDING:
|
||||||||
|
Shares sold – Investor Class
|
2,772,130
|
1,583,391
|
||||||
|
Shares sold – Institutional Class
|
64,646,801
|
16,838,998
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Investor Class
|
53,307
|
44,103
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Institutional Class
|
1,140,005
|
922,449
|
||||||
|
Shares redeemed – Investor Class
|
(1,405,801
|
)
|
(1,221,679
|
)
|
||||
|
Shares redeemed – Institutional Class
|
(20,145,453
|
)
|
(5,524,627
|
)
|
||||
|
Net increase in shares outstanding
|
47,060,989
|
12,642,635
|
||||||
The accompanying notes are an integral part of these financial statements.
39
Pzena Small Cap Value Fund
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
|
February 28,
|
February 28,
|
|||||||
|
2023
|
2022
|
|||||||
|
INCREASE/(DECREASE) IN NET ASSETS FROM:
|
||||||||
|
OPERATIONS:
|
||||||||
|
Net investment income
|
$
|
783,741
|
$
|
379,991
|
||||
|
Net realized gain on investments
|
14,730,376
|
3,644,547
|
||||||
|
Net change in unrealized appreciation/(depreciation) on investments
|
(12,359,658
|
)
|
3,883,847
|
|||||
|
Net increase in net assets resulting from operations
|
3,154,459
|
7,908,385
|
||||||
|
DISTRIBUTIONS:
|
||||||||
|
Net dividends and distributions to shareholders – Investor Class
|
(553,706
|
)
|
(45,616
|
)
|
||||
|
Net dividends and distributions to shareholders – Institutional Class
|
(11,926,073
|
)
|
(1,671,698
|
)
|
||||
|
Net decrease in net assets resulting from distributions paid
|
(12,479,779
|
)
|
(1,717,314
|
)
|
||||
|
CAPITAL SHARE TRANSACTIONS:
|
||||||||
|
Proceeds from shares subscribed – Investor Class
|
417,112
|
1,171,661
|
||||||
|
Proceeds from shares subscribed – Institutional Class
|
39,672,273
|
49,844,868
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Investor Class
|
553,706
|
45,616
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Institutional Class
|
10,669,139
|
1,417,975
|
||||||
|
Payments for shares redeemed – Investor Class
|
(199,320
|
)
|
(167,175
|
)
|
||||
|
Payments for shares redeemed – Institutional Class
|
(68,502,989
|
)
|
(8,263,722
|
)
|
||||
|
Net increase/(decrease) in net assets derived from capital share transactions
|
(17,390,079
|
)
|
44,049,223
|
|||||
|
TOTAL INCREASE/(DECREASE) IN NET ASSETS
|
(26,715,399
|
)
|
50,240,294
|
|||||
|
NET ASSETS:
|
||||||||
|
Beginning of year
|
122,661,154
|
72,420,860
|
||||||
|
End of year
|
$
|
95,945,755
|
$
|
122,661,154
|
||||
|
CHANGES IN SHARES OUTSTANDING:
|
||||||||
|
Shares sold – Investor Class
|
31,976
|
82,264
|
||||||
|
Shares sold – Institutional Class
|
2,995,844
|
3,488,489
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Investor Class
|
46,648
|
3,258
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Institutional Class
|
894,312
|
100,780
|
||||||
|
Shares redeemed – Investor Class
|
(16,201
|
)
|
(11,897
|
)
|
||||
|
Shares redeemed – Institutional Class
|
(5,143,345
|
)
|
(586,283
|
)
|
||||
|
Net increase/(decrease) in shares outstanding
|
(1,190,766
|
)
|
3,076,611
|
|||||
The accompanying notes are an integral part of these financial statements.
40
Pzena International Small Cap Value Fund
Statements of Changes in Net Assets
|
Year Ended
|
Year Ended
|
|||||||
|
February 28,
|
February 28,
|
|||||||
|
2023
|
2022
|
|||||||
|
INCREASE/(DECREASE) IN NET ASSETS FROM:
|
||||||||
|
OPERATIONS:
|
||||||||
|
Net investment income
|
$
|
310,637
|
$
|
86,720
|
||||
|
Net realized gain/(loss) from:
|
||||||||
|
Investments
|
69,658
|
661,766
|
||||||
|
Foreign currency
|
(13,509
|
)
|
(258
|
)
|
||||
|
Change in unrealized appreciation/(depreciation) on:
|
||||||||
|
Investments
|
1,324,717
|
(1,028,722
|
)
|
|||||
|
Foreign currency
|
(1,113
|
)
|
(678
|
)
|
||||
|
Net increase/(decrease) in net assets resulting from operations
|
1,690,390
|
(281,172
|
)
|
|||||
|
DISTRIBUTIONS:
|
||||||||
|
Net dividends and distributions to shareholders – Investor Class
|
(63,740
|
)
|
(12,526
|
)
|
||||
|
Net dividends and distributions to shareholders – Institutional Class
|
(641,563
|
)
|
(150,874
|
)
|
||||
|
Net decrease in net assets resulting from distributions paid
|
(705,303
|
)
|
(163,400
|
)
|
||||
|
CAPITAL SHARE TRANSACTIONS:
|
||||||||
|
Proceeds from shares subscribed – Investor Class
|
554,032
|
577,075
|
||||||
|
Proceeds from shares subscribed – Institutional Class
|
1,150,132
|
12,284,217
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Investor Class
|
63,740
|
12,526
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Institutional Class
|
641,562
|
150,874
|
||||||
|
Payments for shares redeemed – Investor Class
|
(642,646
|
)
|
(387,967
|
)
|
||||
|
Payments for shares redeemed – Institutional Class
|
(195,587
|
)
|
(96,686
|
)
|
||||
|
Net increase in net assets derived from capital share transactions
|
1,571,233
|
12,540,039
|
||||||
|
TOTAL INCREASE IN NET ASSETS
|
2,556,320
|
12,095,467
|
||||||
|
NET ASSETS:
|
||||||||
|
Beginning of year
|
15,456,561
|
3,361,094
|
||||||
|
End of year
|
$
|
18,012,881
|
$
|
15,456,561
|
||||
|
CHANGES IN SHARES OUTSTANDING:
|
||||||||
|
Shares sold – Investor Class
|
64,477
|
55,288
|
||||||
|
Shares sold – Institutional Class
|
113,891
|
1,154,366
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Investor Class
|
6,674
|
1,289
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Institutional Class
|
67,109
|
15,522
|
||||||
|
Shares redeemed – Investor Class
|
(74,401
|
)
|
(35,969
|
)
|
||||
|
Shares redeemed – Institutional Class
|
(20,262
|
)
|
(9,059
|
)
|
||||
|
Net increase in shares outstanding
|
157,488
|
1,181,437
|
||||||
The accompanying notes are an integral part of these financial statements.
41
Pzena International Value Fund
Statements of Changes in Net Assets
|
For the Period
|
||||||||
|
Year Ended
|
June 28, 2021(1)
|
|||||||
|
February 28,
|
through
|
|||||||
|
2023
|
February 28, 2022
|
|||||||
|
INCREASE/(DECREASE) IN NET ASSETS FROM:
|
||||||||
|
OPERATIONS:
|
||||||||
|
Net investment income
|
$
|
850,172
|
$
|
59,973
|
||||
|
Net realized gain/(loss) from:
|
||||||||
|
Investments
|
(786,308
|
)
|
17,563
|
|||||
|
Foreign currency
|
(15,362
|
)
|
(5,471
|
)
|
||||
|
Change in unrealized appreciation/(depreciation) on:
|
||||||||
|
Investments
|
2,896,168
|
(357,140
|
)
|
|||||
|
Foreign Currency
|
(979
|
)
|
332
|
|||||
|
Net increase/(decrease) in net assets resulting from operations
|
2,943,691
|
(284,743
|
)
|
|||||
|
DISTRIBUTIONS:
|
||||||||
|
Net dividends and distributions to shareholders – Investor Class
|
(16,048
|
)
|
(3,650
|
)
|
||||
|
Net dividends and distributions to shareholders – Institutional Class
|
(763,152
|
)
|
(92,011
|
)
|
||||
|
Net decrease in net assets resulting from distributions paid
|
(779,200
|
)
|
(95,661
|
)
|
||||
|
CAPITAL SHARE TRANSACTIONS:
|
||||||||
|
Proceeds from shares subscribed – Investor Class
|
—
|
1,000,000
|
||||||
|
Proceeds from shares subscribed – Institutional Class
|
17,013,283
|
23,913,072
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Investor Class
|
16,048
|
3,650
|
||||||
|
Net asset value of shares issued to shareholders
|
||||||||
|
in payment of distributions declared – Institutional Class
|
441,083
|
92,011
|
||||||
|
Payments for shares redeemed – Institutional Class
|
(819,741
|
)
|
(50,396
|
)
|
||||
|
Net increase in net assets derived from capital share transactions
|
16,650,673
|
24,958,337
|
||||||
|
TOTAL INCREASE IN NET ASSETS
|
18,815,164
|
24,577,933
|
||||||
|
NET ASSETS:
|
||||||||
|
Beginning of period
|
24,577,933
|
—
|
||||||
|
End of period
|
$
|
43,393,097
|
$
|
24,577,933
|
||||
|
CHANGES IN SHARES OUTSTANDING:
|
||||||||
|
Shares sold – Investor Class
|
—
|
100,000
|
||||||
|
Shares sold – Institutional Class
|
2,068,119
|
2,450,103
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Investor Class
|
1,817
|
389
|
||||||
|
Shares issued in reinvestments of dividends and distributions – Institutional Class
|
49,953
|
9,799
|
||||||
|
Shares redeemed – Institutional Class
|
(99,381
|
)
|
(5,367
|
)
|
||||
|
Net increase in shares outstanding
|
2,020,508
|
2,554,924
|
||||||
|
(1)
|
Commencement of operations.
|
The accompanying notes are an integral part of these financial statements.
42
Pzena Mid Cap Value Fund – Investor Class
Financial Highlights
For a share outstanding throughout each year
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||||||||||
|
February 28,
|
February 28,
|
February 28,
|
February 29,
|
February 28,
|
||||||||||||||||
|
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||||
|
PER SHARE DATA:
|
||||||||||||||||||||
|
Net asset value, beginning of year
|
$
|
16.12
|
$
|
15.05
|
$
|
10.86
|
$
|
11.59
|
$
|
12.92
|
||||||||||
|
Income from investment operations:
|
||||||||||||||||||||
|
Net investment income(1)
|
0.17
|
0.12
|
0.16
|
0.12
|
0.11
|
|||||||||||||||
|
Net realized and unrealized gain/(loss) on investments
|
(0.01
|
)
|
2.44
|
4.32
|
(0.74
|
)
|
(1.18
|
)
|
||||||||||||
|
Total from investment operations
|
0.16
|
2.56
|
4.48
|
(0.62
|
)
|
(1.07
|
)
|
|||||||||||||
|
Less distributions:
|
||||||||||||||||||||
|
Dividends from net investment income
|
(0.15
|
)
|
(0.24
|
)
|
(0.05
|
)
|
(0.06
|
)
|
—
|
|||||||||||
|
Dividends from net realized gain on investments
|
(1.85
|
)
|
(1.25
|
)
|
(0.24
|
)
|
(0.05
|
)
|
(0.26
|
)
|
||||||||||
|
Total distributions
|
(2.00
|
)
|
(1.49
|
)
|
(0.29
|
)
|
(0.11
|
)
|
(0.26
|
)
|
||||||||||
|
Redemption fees retained
|
—
|
—
|
—
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
|||||||||||||
|
Net asset value, end of year
|
$
|
14.28
|
$
|
16.12
|
$
|
15.05
|
$
|
10.86
|
$
|
11.59
|
||||||||||
|
TOTAL RETURN
|
1.96
|
%
|
17.52
|
%
|
41.53
|
%
|
-5.49
|
%
|
-8.12
|
%
|
||||||||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||||||||||||||
|
Net assets, end of year (thousands)
|
$
|
6,667
|
$
|
11,934
|
$
|
8,972
|
$
|
3,387
|
$
|
8,920
|
||||||||||
|
Ratio of expenses to average net assets:
|
||||||||||||||||||||
|
Before fee waivers
|
1.32
|
%
|
1.31
|
%
|
1.40
|
%
|
1.56
|
%
|
1.66
|
%
|
||||||||||
|
After fee waivers
|
1.24
|
%
|
1.24
|
%
|
1.24
|
%
|
1.23
|
%
|
1.24
|
%
|
||||||||||
|
Ratio of net investment income to average net assets:
|
||||||||||||||||||||
|
Before fee waivers
|
1.07
|
%
|
0.63
|
%
|
1.33
|
%
|
0.69
|
%
|
0.48
|
%
|
||||||||||
|
After fee waivers
|
1.15
|
%
|
0.70
|
%
|
1.49
|
%
|
1.02
|
%
|
0.90
|
%
|
||||||||||
|
Portfolio turnover rate(3)
|
35
|
%
|
22
|
%
|
45
|
%
|
32
|
%
|
34
|
%
|
||||||||||
|
(1)
|
Based on average shares outstanding.
|
|
(2)
|
Amount is less than $0.01 per share.
|
|
(3)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
43
Pzena Mid Cap Value Fund – Institutional Class
Financial Highlights
For a share outstanding throughout each year
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||||||||||
|
February 28,
|
February 28,
|
February 28,
|
February 29,
|
February 28,
|
||||||||||||||||
|
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||||
|
PER SHARE DATA:
|
||||||||||||||||||||
|
Net asset value, beginning of year
|
$
|
15.92
|
$
|
14.87
|
$
|
10.72
|
$
|
11.44
|
$
|
12.93
|
||||||||||
|
Income from investment operations:
|
||||||||||||||||||||
|
Net investment income(1)
|
0.22
|
0.17
|
0.20
|
0.16
|
0.15
|
|||||||||||||||
|
Net realized and unrealized gain/(loss) on investments
|
—
|
2.42
|
4.27
|
(0.73
|
)
|
(1.20
|
)
|
|||||||||||||
|
Total from investment operations
|
0.22
|
2.59
|
4.47
|
(0.57
|
)
|
(1.05
|
)
|
|||||||||||||
|
Less distributions:
|
||||||||||||||||||||
|
Dividends from net investment income
|
(0.22
|
)
|
(0.29
|
)
|
(0.08
|
)
|
(0.10
|
)
|
(0.18
|
)
|
||||||||||
|
Dividends from net realized gain on investments
|
(1.85
|
)
|
(1.25
|
)
|
(0.24
|
)
|
(0.05
|
)
|
(0.26
|
)
|
||||||||||
|
Total distributions
|
(2.07
|
)
|
(1.54
|
)
|
(0.32
|
)
|
(0.15
|
)
|
(0.44
|
)
|
||||||||||
|
Redemption fees retained
|
—
|
—
|
—
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
|||||||||||||
|
Net asset value, end of year
|
$
|
14.07
|
$
|
15.92
|
$
|
14.87
|
$
|
10.72
|
$
|
11.44
|
||||||||||
|
TOTAL RETURN
|
2.37
|
%
|
17.99
|
%
|
42.06
|
%
|
-5.17
|
%
|
-7.82
|
%
|
||||||||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||||||||||||||
|
Net assets, end of year (thousands)
|
$
|
128,225
|
$
|
123,926
|
$
|
108,895
|
$
|
51,867
|
$
|
33,928
|
||||||||||
|
Ratio of expenses to average net assets:
|
||||||||||||||||||||
|
Before fee waivers
|
0.98
|
%
|
0.97
|
%
|
1.06
|
%
|
1.23
|
%
|
1.32
|
%
|
||||||||||
|
After fee waivers
|
0.90
|
%
|
0.90
|
%
|
0.90
|
%
|
0.90
|
%
|
0.90
|
%
|
||||||||||
|
Ratio of net investment income to average net assets:
|
||||||||||||||||||||
|
Before fee waivers
|
1.42
|
%
|
0.97
|
%
|
1.67
|
%
|
1.02
|
%
|
0.82
|
%
|
||||||||||
|
After fee waivers
|
1.50
|
%
|
1.04
|
%
|
1.83
|
%
|
1.35
|
%
|
1.24
|
%
|
||||||||||
|
Portfolio turnover rate(3)
|
35
|
%
|
22
|
%
|
45
|
%
|
32
|
%
|
34
|
%
|
||||||||||
|
(1)
|
Based on average shares outstanding.
|
|
(2)
|
Amount is less than $0.01 per share.
|
|
(3)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
44
Pzena Emerging Markets Value Fund – Investor Class
Financial Highlights
For a share outstanding throughout each year
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||||||||||
|
February 28,
|
February 28,
|
February 28,
|
February 29,
|
February 28,
|
||||||||||||||||
|
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||||
|
PER SHARE DATA:
|
||||||||||||||||||||
|
Net asset value, beginning of year
|
$
|
11.59
|
$
|
11.84
|
$
|
8.96
|
$
|
10.56
|
$
|
11.46
|
||||||||||
|
Income from investment operations:
|
||||||||||||||||||||
|
Net investment income(1)
|
0.29
|
0.20
|
0.14
|
0.16
|
0.13
|
|||||||||||||||
|
Net realized and unrealized gain/(loss) on investments
|
(0.69
|
)
|
(0.16
|
)
|
2.86
|
(1.37
|
)
|
(0.93
|
)
|
|||||||||||
|
Total from investment operations
|
(0.40
|
)
|
0.04
|
3.00
|
(1.21
|
)
|
(0.80
|
)
|
||||||||||||
|
Less distributions:
|
||||||||||||||||||||
|
Dividends from net investment income
|
(0.16
|
)
|
(0.21
|
)
|
(0.09
|
)
|
(0.14
|
)
|
(0.10
|
)
|
||||||||||
|
Dividends from net realized gain on investments
|
(0.03
|
)
|
(0.08
|
)
|
(0.03
|
)
|
(0.25
|
)
|
—
|
|||||||||||
|
Total distributions
|
(0.19
|
)
|
(0.29
|
)
|
(0.12
|
)
|
(0.39
|
)
|
(0.10
|
)
|
||||||||||
|
Redemption fees retained
|
—
|
—
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
||||||||||||
|
Net asset value, end of year
|
$
|
11.00
|
$
|
11.59
|
$
|
11.84
|
$
|
8.96
|
$
|
10.56
|
||||||||||
|
TOTAL RETURN
|
-3.39
|
%
|
0.31
|
%
|
33.63
|
%
|
-11.85
|
%
|
-6.95
|
%
|
||||||||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||||||||||||||
|
Net assets, end of year (thousands)
|
$
|
36,800
|
$
|
22,332
|
$
|
17,996
|
$
|
10,563
|
$
|
12,814
|
||||||||||
|
Ratio of expenses to average net assets:
|
||||||||||||||||||||
|
Before fee waivers
|
1.50
|
%
|
1.50
|
%
|
1.56
|
%
|
1.58
|
%
|
1.60
|
%
|
||||||||||
|
After fee waivers
|
1.43
|
%
|
1.43
|
%
|
1.43
|
%
|
1.56
|
%
|
1.59
|
%
|
||||||||||
|
Ratio of net investment income to average net assets:
|
||||||||||||||||||||
|
Before fee waivers
|
2.61
|
%
|
1.57
|
%
|
1.32
|
%
|
1.55
|
%
|
1.25
|
%
|
||||||||||
|
After fee waivers
|
2.68
|
%
|
1.64
|
%
|
1.45
|
%
|
1.57
|
%
|
1.26
|
%
|
||||||||||
|
Portfolio turnover rate(3)
|
15
|
%
|
10
|
%
|
43
|
%
|
18
|
%
|
21
|
%
|
||||||||||
|
(1)
|
Based on average shares outstanding.
|
|
(2)
|
Amount is less than $0.01 per share.
|
|
(3)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
45
Pzena Emerging Markets Value Fund – Institutional Class
Financial Highlights
For a share outstanding throughout each year
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||||||||||
|
February 28,
|
February 28,
|
February 28,
|
February 29,
|
February 28,
|
||||||||||||||||
|
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||||
|
PER SHARE DATA:
|
||||||||||||||||||||
|
Net asset value, beginning of year
|
$
|
11.63
|
$
|
11.87
|
$
|
8.98
|
$
|
10.57
|
$
|
11.46
|
||||||||||
|
Income from investment operations:
|
||||||||||||||||||||
|
Net investment income(1)
|
0.33
|
0.24
|
0.17
|
0.20
|
0.17
|
|||||||||||||||
|
Net realized and unrealized gain/(loss) on investments
|
(0.70
|
)
|
(0.15
|
)
|
2.86
|
(1.37
|
)
|
(0.93
|
)
|
|||||||||||
|
Total from investment operations
|
(0.37
|
)
|
0.09
|
3.03
|
(1.17
|
)
|
(0.76
|
)
|
||||||||||||
|
Less distributions:
|
||||||||||||||||||||
|
Dividends from net investment income
|
(0.19
|
)
|
(0.25
|
)
|
(0.11
|
)
|
(0.17
|
)
|
(0.13
|
)
|
||||||||||
|
Dividends from net realized gain on investments
|
(0.03
|
)
|
(0.08
|
)
|
(0.03
|
)
|
(0.25
|
)
|
—
|
|||||||||||
|
Total distributions
|
(0.22
|
)
|
(0.33
|
)
|
(0.14
|
)
|
(0.42
|
)
|
(0.13
|
)
|
||||||||||
|
Redemption fees retained
|
—
|
—
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
||||||||||||
|
Net asset value, end of year
|
$
|
11.04
|
$
|
11.63
|
$
|
11.87
|
$
|
8.98
|
$
|
10.57
|
||||||||||
|
TOTAL RETURN
|
-3.11
|
%
|
0.74
|
%
|
33.96
|
%
|
-11.51
|
%
|
-6.57
|
%
|
||||||||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||||||||||||||
|
Net assets, end of year (thousands)
|
$
|
1,014,109
|
$
|
537,475
|
$
|
403,412
|
$
|
299,920
|
$
|
298,532
|
||||||||||
|
Ratio of expenses to average net assets:
|
||||||||||||||||||||
|
Before fee waivers
|
1.15
|
%
|
1.15
|
%
|
1.21
|
%
|
1.23
|
%
|
1.26
|
%
|
||||||||||
|
After fee waivers
|
1.08
|
%
|
1.08
|
%
|
1.08
|
%
|
1.21
|
%
|
1.25
|
%
|
||||||||||
|
Ratio of net investment income to average net assets:
|
||||||||||||||||||||
|
Before fee waivers
|
2.96
|
%
|
1.92
|
%
|
1.67
|
%
|
1.90
|
%
|
1.59
|
%
|
||||||||||
|
After fee waivers
|
3.03
|
%
|
1.99
|
%
|
1.80
|
%
|
1.92
|
%
|
1.60
|
%
|
||||||||||
|
Portfolio turnover rate(3)
|
15
|
%
|
10
|
%
|
43
|
%
|
18
|
%
|
21
|
%
|
||||||||||
|
(1)
|
Based on average shares outstanding.
|
|
(2)
|
Amount is less than $0.01 per share.
|
|
(3)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
46
Pzena Small Cap Value Fund – Investor Class
Financial Highlights
For a share outstanding throughout each year
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||||||||||
|
February 28,
|
February 28,
|
February 28,
|
February 29,
|
February 28,
|
||||||||||||||||
|
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||||
|
PER SHARE DATA:
|
||||||||||||||||||||
|
Net asset value, beginning of year
|
$
|
14.20
|
$
|
13.07
|
$
|
9.57
|
$
|
10.90
|
$
|
11.10
|
||||||||||
|
Income from investment operations:
|
||||||||||||||||||||
|
Net investment income(1)
|
0.06
|
0.01
|
0.11
|
0.06
|
0.00
|
(2)
|
||||||||||||||
|
Net realized and unrealized gain/(loss) on investments
|
0.66
|
1.31
|
3.55
|
(1.39
|
)
|
0.22
|
||||||||||||||
|
Total from investment operations
|
0.72
|
1.32
|
3.66
|
(1.33
|
)
|
0.22
|
||||||||||||||
|
Less distributions:
|
||||||||||||||||||||
|
Dividends from net investment income
|
(0.08
|
)
|
(0.09
|
)
|
—
|
—
|
—
|
|||||||||||||
|
Dividends from net realized gain on investments
|
(1.94
|
)
|
(0.10
|
)
|
(0.16
|
)
|
—
|
(0.42
|
)
|
|||||||||||
|
Total distributions
|
(2.02
|
)
|
(0.19
|
)
|
(0.16
|
)
|
—
|
(0.42
|
)
|
|||||||||||
|
Redemption fees retained
|
—
|
—
|
—
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
|||||||||||||
|
Net asset value, end of year
|
$
|
12.90
|
$
|
14.20
|
$
|
13.07
|
$
|
9.57
|
$
|
10.90
|
||||||||||
|
TOTAL RETURN
|
6.34
|
%
|
10.04
|
%
|
38.46
|
%
|
-12.20
|
%
|
2.40
|
%
|
||||||||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||||||||||||||
|
Net assets, end of year (thousands)
|
$
|
4,132
|
$
|
3,663
|
$
|
2,409
|
$
|
1,310
|
$
|
6,139
|
||||||||||
|
Ratio of expenses to average net assets:
|
||||||||||||||||||||
|
Before fee waivers and expense reimbursement
|
1.49
|
%
|
1.48
|
%
|
1.69
|
%
|
2.09
|
%
|
2.36
|
%
|
||||||||||
|
After fee waivers and expense reimbursement
|
1.34
|
%
|
1.41
|
%
|
1.38
|
%
|
1.42
|
%
|
1.52
|
%
|
||||||||||
|
Ratio of net investment income/(loss) to average net assets:
|
||||||||||||||||||||
|
Before fee waivers and expense reimbursement
|
0.31
|
%
|
0.00
|
%
|
0.90
|
%
|
(0.13
|
)%
|
(0.81
|
)%
|
||||||||||
|
After fee waivers and expense reimbursement
|
0.46
|
%
|
0.07
|
%
|
1.21
|
%
|
0.54
|
%
|
0.03
|
%
|
||||||||||
|
Portfolio turnover rate(3)
|
28
|
%
|
10
|
%
|
26
|
%
|
38
|
%
|
52
|
%
|
||||||||||
|
(1)
|
Based on average shares outstanding.
|
|
(2)
|
Amount is less than $0.01 per share.
|
|
(3)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
47
Pzena Small Cap Value Fund – Institutional Class
Financial Highlights
For a share outstanding throughout each year
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
||||||||||||||||
|
February 28,
|
February 28,
|
February 28,
|
February 29,
|
February 28,
|
||||||||||||||||
|
2023
|
2022
|
2021
|
2020
|
2019
|
||||||||||||||||
|
PER SHARE DATA:
|
||||||||||||||||||||
|
Net asset value, beginning of year
|
$
|
14.28
|
$
|
13.14
|
$
|
9.60
|
$
|
10.99
|
$
|
11.17
|
||||||||||
|
Income from investment operations:
|
||||||||||||||||||||
|
Net investment income(1)
|
0.10
|
0.05
|
0.14
|
0.09
|
0.04
|
|||||||||||||||
|
Net realized and unrealized gain/(loss) on investments
|
0.65
|
1.31
|
3.57
|
(1.40
|
)
|
0.23
|
||||||||||||||
|
Total from investment operations
|
0.75
|
1.36
|
3.71
|
(1.31
|
)
|
0.27
|
||||||||||||||
|
Less distributions:
|
||||||||||||||||||||
|
Dividends from net investment income
|
(0.12
|
)
|
(0.12
|
)
|
(0.01
|
)
|
(0.08
|
)
|
(0.03
|
)
|
||||||||||
|
Dividends from net realized gain on investments
|
(1.94
|
)
|
(0.10
|
)
|
(0.16
|
)
|
—
|
(0.42
|
)
|
|||||||||||
|
Total distributions
|
(2.06
|
)
|
(0.22
|
)
|
(0.17
|
)
|
(0.08
|
)
|
(0.45
|
)
|
||||||||||
|
Redemption fees retained
|
—
|
—
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
0.00
|
(1)(2)
|
||||||||||||
|
Net asset value, end of year
|
$
|
12.97
|
$
|
14.28
|
$
|
13.14
|
$
|
9.60
|
$
|
10.99
|
||||||||||
|
TOTAL RETURN
|
6.50
|
%
|
10.36
|
%
|
38.87
|
%
|
-12.07
|
%
|
2.83
|
%
|
||||||||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||||||||||||||
|
Net assets, end of year (thousands)
|
$
|
91,814
|
$
|
118,998
|
$
|
70,012
|
$
|
30,593
|
$
|
20,083
|
||||||||||
|
Ratio of expenses to average net assets:
|
||||||||||||||||||||
|
Before fee waivers and expense reimbursement
|
1.18
|
%
|
1.17
|
%
|
1.41
|
%
|
1.77
|
%
|
2.03
|
%
|
||||||||||
|
After fee waivers and expense reimbursement
|
1.03
|
%
|
1.10
|
%
|
1.10
|
%
|
1.10
|
%
|
1.19
|
%
|
||||||||||
|
Ratio of net investment income/(loss) to average net assets:
|
||||||||||||||||||||
|
Before fee waivers and expense reimbursement
|
0.62
|
%
|
0.31
|
%
|
1.18
|
%
|
0.19
|
%
|
(0.48
|
)%
|
||||||||||
|
After fee waivers and expense reimbursement
|
0.77
|
%
|
0.38
|
%
|
1.49
|
%
|
0.86
|
%
|
0.36
|
%
|
||||||||||
|
Portfolio turnover rate(3)
|
28
|
%
|
10
|
%
|
26
|
%
|
38
|
%
|
52
|
%
|
||||||||||
|
(1)
|
Based on average shares outstanding.
|
|
(2)
|
Amount is less than $0.01 per share.
|
|
(3)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
48
Pzena International Small Cap Value Fund – Investor Class
Financial Highlights
For a share outstanding throughout each period
|
For the Period
|
||||||||||||||||||||
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
July 2, 2018(1)
|
||||||||||||||||
|
February 28,
|
February 28,
|
February 28,
|
February 29,
|
through
|
||||||||||||||||
|
2023
|
2022
|
2021
|
2020
|
February 28, 2019
|
||||||||||||||||
|
PER SHARE DATA:
|
||||||||||||||||||||
|
Net asset value, beginning of period
|
$
|
10.05
|
$
|
9.48
|
$
|
7.48
|
$
|
9.07
|
$
|
10.00
|
||||||||||
|
Income from investment operations:
|
||||||||||||||||||||
|
Net investment income(2)
|
0.18
|
0.05
|
0.09
|
0.18
|
0.03
|
|||||||||||||||
|
Net realized and unrealized gain/(loss) on investments
|
0.83
|
0.61
|
2.01
|
(1.59
|
)
|
(0.79
|
)
|
|||||||||||||
|
Total from investment operations
|
1.01
|
0.66
|
2.10
|
(1.41
|
)
|
(0.76
|
)
|
|||||||||||||
|
Less distributions:
|
||||||||||||||||||||
|
Dividends from net investment income
|
(0.16
|
)
|
(0.07
|
)
|
(0.09
|
)
|
(0.18
|
)
|
(0.04
|
)
|
||||||||||
|
Dividends from net realized gain on investments
|
(0.28
|
)
|
(0.02
|
)
|
(0.01
|
)
|
(0.00
|
)(3)
|
(0.13
|
)
|
||||||||||
|
Total distributions
|
(0.44
|
)
|
(0.09
|
)
|
(0.10
|
)
|
(0.18
|
)
|
(0.17
|
)
|
||||||||||
|
Net asset value, end of period
|
$
|
10.62
|
$
|
10.05
|
$
|
9.48
|
$
|
7.48
|
$
|
9.07
|
||||||||||
|
TOTAL RETURN
|
10.51
|
%
|
6.93
|
%
|
28.19
|
%
|
-15.83
|
%
|
-7.48
|
%(4)
|
||||||||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||||||||||||||
|
Net assets, end of period (thousands)
|
$
|
1,589
|
$
|
1,538
|
$
|
1,254
|
$
|
819
|
$
|
925
|
||||||||||
|
Ratio of expenses to average net assets:
|
||||||||||||||||||||
|
Before expense reimbursement
|
2.79
|
%
|
3.16
|
%
|
8.18
|
%
|
13.43
|
%
|
13.92
|
%(5)
|
||||||||||
|
After expense reimbursement
|
1.45
|
%
|
1.45
|
%
|
1.42
|
%
|
1.42
|
%
|
1.44
|
%(5)
|
||||||||||
|
Ratio of net investment income/(loss) to average net assets:
|
||||||||||||||||||||
|
Before expense reimbursement
|
0.53
|
%
|
(1.25
|
)%
|
(5.56
|
)%
|
(9.91
|
)%
|
(12.05
|
)%(5)
|
||||||||||
|
After expense reimbursement
|
1.87
|
%
|
0.46
|
%
|
1.20
|
%
|
2.10
|
%
|
0.43
|
%(5)
|
||||||||||
|
Portfolio turnover rate(6)
|
26
|
%
|
22
|
%
|
32
|
%
|
18
|
%
|
32
|
%(4)
|
||||||||||
|
(1)
|
Commencement of operations.
|
|
(2)
|
Based on average shares outstanding.
|
|
(3)
|
Amount is less than $0.01 per share.
|
|
(4)
|
Not annualized.
|
|
(5)
|
Annualized.
|
|
(6)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
49
Pzena International Small Cap Value Fund – Institutional Class
Financial Highlights
For a share outstanding throughout each period
|
For the Period
|
||||||||||||||||||||
|
Year Ended
|
Year Ended
|
Year Ended
|
Year Ended
|
July 2, 2018(1)
|
||||||||||||||||
|
February 28,
|
February 28,
|
February 28,
|
February 29,
|
through
|
||||||||||||||||
|
2023
|
2022
|
2021
|
2020
|
February 28, 2019
|
||||||||||||||||
|
PER SHARE DATA:
|
||||||||||||||||||||
|
Net asset value, beginning of period
|
$
|
10.07
|
$
|
9.49
|
$
|
7.49
|
$
|
9.07
|
$
|
10.00
|
||||||||||
|
Income from investment operations:
|
||||||||||||||||||||
|
Net investment income(2)
|
0.20
|
0.08
|
0.10
|
0.20
|
0.04
|
|||||||||||||||
|
Net realized and unrealized gain/(loss) on investments
|
0.83
|
0.61
|
2.01
|
(1.59
|
)
|
(0.78
|
)
|
|||||||||||||
|
Total from investment operations
|
1.03
|
0.69
|
2.11
|
(1.39
|
)
|
(0.74
|
)
|
|||||||||||||
|
Less distributions:
|
||||||||||||||||||||
|
Dividends from net investment income
|
(0.18
|
)
|
(0.09
|
)
|
(0.10
|
)
|
(0.19
|
)
|
(0.06
|
)
|
||||||||||
|
Dividends from net realized gain on investments
|
(0.28
|
)
|
(0.02
|
)
|
(0.01
|
)
|
(0.00
|
)(3)
|
(0.13
|
)
|
||||||||||
|
Total distributions
|
(0.46
|
)
|
(0.11
|
)
|
(0.11
|
)
|
(0.19
|
)
|
(0.19
|
)
|
||||||||||
|
Net asset value, end of period
|
$
|
10.64
|
$
|
10.07
|
$
|
9.49
|
$
|
7.49
|
$
|
9.07
|
||||||||||
|
TOTAL RETURN
|
10.73
|
%
|
7.32
|
%
|
28.40
|
%
|
-15.55
|
%
|
-7.32
|
%(4)
|
||||||||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||||||||||||||
|
Net assets, end of period (thousands)
|
$
|
16,424
|
$
|
13,919
|
$
|
2,107
|
$
|
1,424
|
$
|
1,006
|
||||||||||
|
Ratio of expenses to average net assets:
|
||||||||||||||||||||
|
Before expense reimbursement
|
2.51
|
%
|
2.88
|
%
|
7.93
|
%
|
13.18
|
%
|
13.65
|
%(5)
|
||||||||||
|
After expense reimbursement
|
1.17
|
%
|
1.17
|
%
|
1.17
|
%
|
1.17
|
%
|
1.17
|
%(5)
|
||||||||||
|
Ratio of net investment income/(loss) to average net assets:
|
||||||||||||||||||||
|
Before expense reimbursement
|
0.81
|
%
|
(0.97
|
)%
|
(5.31
|
)%
|
(9.66
|
)%
|
(11.78
|
)%(5)
|
||||||||||
|
After expense reimbursement
|
2.15
|
%
|
0.74
|
%
|
1.45
|
%
|
2.35
|
%
|
0.70
|
%(5)
|
||||||||||
|
Portfolio turnover rate(6)
|
26
|
%
|
22
|
%
|
32
|
%
|
18
|
%
|
32
|
%(4)
|
||||||||||
|
(1)
|
Commencement of operations.
|
|
(2)
|
Based on average shares outstanding.
|
|
(3)
|
Amount is less than $0.01 per share.
|
|
(4)
|
Not annualized.
|
|
(5)
|
Annualized.
|
|
(6)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
50
Pzena International Value Fund – Investor Class
Financial Highlights
For a share outstanding throughout each period
|
For the Period
|
||||||||
|
Year Ended
|
June 28, 2021(1)
|
|||||||
|
February 28,
|
through
|
|||||||
|
2023
|
February 28, 2022
|
|||||||
|
PER SHARE DATA:
|
||||||||
|
Net asset value, beginning of period
|
$
|
9.62
|
$
|
10.00
|
||||
|
Income from investment operations:
|
||||||||
|
Net investment income(2)
|
0.21
|
0.03
|
||||||
|
Net realized and unrealized loss on investments
|
(0.19
|
)
|
(0.37
|
)
|
||||
|
Total from investment operations
|
0.02
|
(0.34
|
)
|
|||||
|
Less distributions:
|
||||||||
|
Dividends from net investment income
|
(0.16
|
)
|
(0.04
|
)
|
||||
|
Dividends from net realized gain on investments
|
(0.00
|
)(3)
|
—
|
|||||
|
Total distributions
|
(0.16
|
)
|
(0.04
|
)
|
||||
|
Net asset value, end of period
|
$
|
9.48
|
$
|
9.62
|
||||
|
TOTAL RETURN
|
0.33
|
%
|
-3.43
|
%(4)
|
||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||
|
Net assets, end of period (thousands)
|
$
|
969
|
$
|
966
|
||||
|
Ratio of expenses to average net assets:
|
||||||||
|
Before expense reimbursement
|
1.73
|
%
|
2.83
|
%(5)
|
||||
|
After expense reimbursement
|
0.99
|
%
|
0.99
|
%(5)
|
||||
|
Ratio of net investment income/(loss) to average net assets:
|
||||||||
|
Before expense reimbursement
|
1.69
|
%
|
(1.34
|
)%(5)
|
||||
|
After expense reimbursement
|
2.43
|
%
|
0.50
|
%(5)
|
||||
|
Portfolio turnover rate(6)
|
19
|
%
|
4
|
%(4)
|
||||
|
(1)
|
Commencement of operations.
|
|
(2)
|
Based on average shares outstanding.
|
|
(3)
|
Amount is less than $0.01 per share.
|
|
(4)
|
Not annualized.
|
|
(5)
|
Annualized
|
|
(6)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
51
Pzena International Value Fund – Institutional Class
Financial Highlights
For a share outstanding throughout each period
|
For the Period
|
||||||||
|
Year Ended
|
June 28, 2021(1)
|
|||||||
|
February 28,
|
through
|
|||||||
|
2023
|
February 28, 2022
|
|||||||
|
PER SHARE DATA:
|
||||||||
|
Net asset value, beginning of period
|
$
|
9.62
|
$
|
10.00
|
||||
|
Income from investment operations:
|
||||||||
|
Net investment income(2)
|
0.23
|
0.05
|
||||||
|
Net realized and unrealized loss on investments
|
(0.19
|
)
|
(0.38
|
)
|
||||
|
Total from investment operations
|
0.04
|
(0.33
|
)
|
|||||
|
Less distributions:
|
||||||||
|
Dividends from net investment income
|
(0.18
|
)
|
(0.05
|
)
|
||||
|
Dividends from net realized gain on investments
|
(0.00
|
)(3)
|
—
|
|||||
|
Total distributions
|
(0.18
|
)
|
(0.05
|
)
|
||||
|
Net asset value, end of period
|
$
|
9.48
|
$
|
9.62
|
||||
|
TOTAL RETURN
|
0.53
|
%
|
-3.29
|
%(4)
|
||||
|
SUPPLEMENTAL DATA AND RATIOS:
|
||||||||
|
Net assets, end of period (thousands)
|
$
|
42,424
|
$
|
23,612
|
||||
|
Ratio of expenses to average net assets:
|
||||||||
|
Before expense reimbursement
|
1.48
|
%
|
2.58
|
%(5)
|
||||
|
After expense reimbursement
|
0.74
|
%
|
0.74
|
%(5)
|
||||
|
Ratio of net investment income/(loss) to average net assets:
|
||||||||
|
Before expense reimbursement
|
1.94
|
%
|
(1.09
|
)%(5)
|
||||
|
After expense reimbursement
|
2.68
|
%
|
0.75
|
%(5)
|
||||
|
Portfolio turnover rate(6)
|
19
|
%
|
4
|
%(4)
|
||||
|
(1)
|
Commencement of operations.
|
|
(2)
|
Based on average shares outstanding.
|
|
(3)
|
Amount is less than $0.01 per share.
|
|
(4)
|
Not annualized.
|
|
(5)
|
Annualized
|
|
(6)
|
Portfolio turnover is calculated on the basis of the Fund as a whole.
|
The accompanying notes are an integral part of these financial statements.
52
Pzena Funds
Notes to Financial Statements
February 28, 2023
NOTE 1 – ORGANIZATION
The Pzena Mid Cap Value Fund (the “Mid Cap Value Fund”), Pzena Emerging Markets Value Fund (the “Emerging Markets Value Fund”), Pzena Small Cap Value Fund (the “Small Cap Value Fund”), Pzena
International Small Cap Value Fund (the “International Small Cap Value Fund”), and Pzena International Value Fund (the “International Value Fund”) (collectively, the “Funds”), are each a diversified series of Advisors Series Trust (the “Trust”),
which is registered under the Investment Company Act of 1940, as amended, (the “1940 Act”) as an open-end management investment company. The Funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards
Board (“FASB”) Accounting Standard Codification Topic 946 “Financial Services – Investment Companies”.
The primary investment objective for each Fund is to achieve long-term capital appreciation. Currently, each Fund offers Investor Class and Institutional Class shares. Each class of shares differs
principally in its respective distribution and shareholder servicing expenses and sales charges, if any. Each class of shares has identical rights to earnings, assets and voting privileges, except for class-specific expenses and exclusive rights to
vote on matters affecting only individual classes.
The Mid Cap Value Fund and Emerging Markets Value Fund commenced operations on March 31, 2014. The Small Cap Value Fund commenced operations on April 27, 2016, the International Small Cap Value Fund
commenced operations on July 2, 2018, and the International Value Fund commenced operations on June 28, 2021.
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with accounting
principles generally accepted in the United States of America.
Security Valuation – All investments in securities are recorded at their estimated fair value, as described in Note 3.
Federal Income Taxes – It is the policy of the Funds to comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its taxable income to shareholders. Therefore, no Federal income or excise tax provision is required.
The Funds recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. The tax returns of the Funds’
prior three fiscal years are open for examination. Management has reviewed all open tax years in major jurisdictions and concluded that there is no impact on the Funds’ net assets and no tax liability resulting from unrecognized tax events relating
to uncertain income tax positions taken or expected to be taken on a tax return. The Funds identify their major tax jurisdictions as U.S. Federal and the state of Wisconsin. The Funds are not aware of any tax positions for which it is reasonably
possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
Security Transactions, Income and Distributions – Security transactions are accounted for on the trade date. Realized gains and losses on securities sold are
determined on the basis of identified cost. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Withholding taxes on foreign dividends have been provided for in accordance with each Fund’s understanding of the
applicable country’s tax rules and rates. The Funds will make distributions of dividends and capital gains, if any, at least annually, typically in December. The amount of dividends and distributions to shareholders from net investment income and
net realized capital gains is determined in accordance with Federal income tax regulations which differ from accounting principles generally accepted in the United States of America.
Investment income, expenses (other than those specific to the class of shares), and realized and unrealized gains and losses on investments are allocated to the separate classes of each Fund based upon
their relative net assets on the date income is earned or expensed and realized and unrealized gains and losses are incurred.
Each Fund is charged for those expenses that are directly attributable to the Fund, such as investment advisory, custody and transfer agent fees. Expenses that are not attributable to a Fund are
typically allocated among the Funds in proportion to their respective net assets. Common expenses of the Trust are typically allocated among the funds in the Trust based on a fund’s respective net assets, or by other equitable means.
Reclassification of Capital Accounts – Accounting principles generally accepted in the United States of America require that certain components of net assets
relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended February 28, 2023, the Emerging Markets Value Fund,
53
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
International Small Cap Value Fund, and International Value Fund did not require any permanent tax adjustments on the Statements of Assets and Liabilities. For the year ended February 28, 2023, the Mid
Cap Value Fund and Small Cap Fund made the following permanent tax adjustments on the Statements of Assets and Liabilities:
|
Distributable Earnings
|
Paid-in Capital
|
|
|
Mid Cap Value Fund
|
$(1,555,888)
|
$1,555,888
|
|
Small Cap Fund
|
$(4,564,596)
|
$4,564,596
|
Use of Estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in
net assets from operation during the reporting period. Actual results could differ from those estimates.
Foreign Currency – Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date
of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated to U.S. dollar amounts on the respective dates of such transactions.
The Funds do not isolate those portions of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, and
the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds’ books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the fair values of assets and liabilities, other than investments in securities at fiscal period-end, resulting from changes in exchange rates.
REITs – The Funds can make certain investments in real estate investment trusts (“REITs”) which pay dividends to their shareholders based upon funds available
from operations. It is quite common for these dividends to exceed the REITs’ taxable earnings and profits resulting in the excess portion of such dividends being designated as a return of capital. Each Fund intends to include the gross dividends
from such REITs in its annual distributions to its shareholders and, accordingly, a portion of each Fund’s distributions may also be designated as a return of capital.
Events Subsequent to the Fiscal Year End – In preparing the financial statements as of February 28, 2023, management considered the impact of subsequent events
for the potential recognition or disclosure in the financial statements. Management has determined there were no subsequent events that would need to be disclosed in the Funds’ financial statements.
NOTE 3 – SECURITIES VALUATION
The Funds have adopted authoritative fair value accounting standards which establish an authoritative definition of fair value and set out a hierarchy for measuring fair value. These standards require
additional disclosures about the various inputs and valuation techniques used to develop the measurements of fair value, a discussion in changes in valuation techniques and related inputs during the period and expanded disclosure of valuation levels
for major security types. These inputs are summarized in the three broad levels listed below:
|
Level 1 –
|
Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
|
|
Level 2 –
|
Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the
identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
|
|
Level 3 –
|
Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Funds’ own assumptions about the assumptions a market participant
would use in valuing the asset or liability, and would be based on the best information available.
|
54
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
Following is a description of the valuation techniques applied to the Funds’ major categories of assets and liabilities measured at fair value on a recurring basis:
Each Fund determines the fair value of its investments and computes its net asset value per share as of the close of regular trading on the New York Stock Exchange (4:00 pm EST).
Equity Securities – Equity securities, including common stocks, preferred stocks, foreign-issued common stocks, exchange-traded funds, closed-end mutual funds
and REITs, that are primarily traded on a national securities exchange shall be valued at the last sale price on the exchange on which they are primarily traded on the day of valuation or, if there has been no sale on such day, at the mean between
the bid and asked prices. Securities primarily traded in the NASDAQ Global Market System for which market quotations are readily available shall be valued using the NASDAQ Official Closing Price (“NOCP”). If the NOCP is not available, such
securities shall be valued at the last sale price on the day of valuation, or if there has been no sale on such day, at the mean between the bid and asked prices. Over-the-counter securities which are not traded in the NASDAQ Global Market System
shall be valued at the most recent sales price. The values for foreign securities are reported in local currency and converted to U.S. dollars using currency exchange rates. Exchange rates are provided daily by a recognized independent pricing
agent. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy.
Participatory Notes – Participatory notes are valued with an evaluated price provided by an independent pricing service. These securities will generally be
classified in Level 2 of the fair value hierarchy.
Investment Companies – Investments in open-end mutual funds, including money market funds, are valued at their net asset value per share provided by the service
agent of the funds and will be classified in Level 1 of the fair value hierarchy.
Short-Term Securities – Short-term securities having a maturity of less than 60 days are valued at the evaluated mean between bid and asked price. To the extent
the inputs are observable and timely, these securities would be classified in Level 2 of the fair value hierarchy.
Restricted Securities – The Funds may invest in securities that are subject to legal or contractual restrictions on resale (“restricted securities”). Restricted
securities are often purchased in private placement transactions, are not registered under the Securities Act of 1933, may have contractual restrictions on resale, and may be valued under methods approved by the Board of Trustees (“Board”) as
reflecting fair value. Certain restricted securities eligible for resale to qualified institutional investors, including Rule 144a securities, are not subject to the limitation on the Funds’ investment in illiquid securities if they are determined
to be liquid in accordance with the procedures adopted by the Board.
Accounting Pronouncements – In October 2020, the Securities and Exchange Commission (the “SEC”) adopted new regulations governing the use of derivatives by
registered investment companies (“Rule 18f-4”). Funds were required to implement and comply with Rule 18f-4 by August 19, 2022. Rule 18f-4 imposes limits on the amount of derivatives a fund can enter into, eliminates the asset segregation framework
currently used by funds to comply with Section 18 of the 1940 Act, treats derivatives as senior securities and requires funds whose use of derivatives is more than a limited specified exposure amount to establish and maintain a comprehensive
derivatives risk management program and appoint a derivatives risk manager. As of the Funds’ most recently filed Statement of Additional Information, the Funds cannot enter into derivative transactions.
In December 2020, the SEC adopted a rule providing a framework for fund valuation practices (“Rule 2a-5”). Rule 2a-5 establishes requirements for determining fair value in good faith for purposes of the
1940 Act. Rule 2a-5 permits fund boards to designate certain parties to perform fair value determinations, subject to board oversight and certain other conditions. Rule 2a-5 also defines when market quotations are “readily available” for purposes of
the 1940 Act and the threshold for determining whether a fund must fair value a security. In connection with Rule 2a-5, the SEC also adopted related recordkeeping requirements and rescinded previously issued guidance, including with respect to the
role of a board in determining fair value and the accounting and auditing of fund investments. The Funds are in compliance with Rule 2a-5, which had a compliance date of September 8, 2022.
Prior to the effectiveness of Rule 2a-5, the Board had delegated day-to-day valuation issues to a Valuation Committee of the Trust which was comprised of representatives from the Funds’ administrator,
U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“Fund Services”). The function of the Valuation Committee was to value securities where current and reliable market quotations were not readily available, or the
closing price did not represent fair value by following procedures approved by the Board. These procedures considered many factors, including the type of security, size of holding, trading volume and news events. All actions taken by the Valuation
Committee were subsequently reviewed and ratified by the Board. The Valuation Committee served through September 7, 2022. Effective September 8, 2022, the Board approved Pzena Investment Management, LLC (the “Adviser”) as the Funds’ valuation
designee under Rule 2a-5.
In June 2022, the FASB issued Accounting Standards Update 2022-03, which amends Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions
(“ASU 2022-03”). ASU 2022-03 clarifies guidance for fair value
55
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
measurement of an equity security subject to a contractual sale restriction and establishes new disclosure requirements for such equity securities. ASU 2022-03 is effective for fiscal years beginning
after December 15, 2023 and for interim periods within those fiscal years, with early adoption permitted. Management is currently evaluating the impact of these amendments on the Funds’ financial statements.
Depending on the relative significance of the valuation inputs, fair valued securities may be classified in either Level 2 or Level 3 of the fair value hierarchy.
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Funds’ securities as of February 28, 2023:
|
Mid Cap Value Fund
|
||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
Common Stocks
|
||||||||||||||||
|
Basic Materials
|
$
|
9,468,137
|
$
|
—
|
$
|
—
|
$
|
9,468,137
|
||||||||
|
Consumer Discretionary
|
25,252,568
|
—
|
—
|
25,252,568
|
||||||||||||
|
Energy
|
4,833,606
|
—
|
—
|
4,833,606
|
||||||||||||
|
Financials
|
42,041,735
|
—
|
—
|
42,041,735
|
||||||||||||
|
Health Care
|
10,605,163
|
—
|
—
|
10,605,163
|
||||||||||||
|
Industrials
|
22,550,099
|
—
|
—
|
22,550,099
|
||||||||||||
|
Technology
|
11,434,442
|
—
|
—
|
11,434,442
|
||||||||||||
|
Utilities
|
3,991,536
|
—
|
—
|
3,991,536
|
||||||||||||
|
Total Common Stocks
|
130,177,286
|
—
|
—
|
130,177,286
|
||||||||||||
|
Short-Term Investment
|
4,153,300
|
—
|
—
|
4,153,300
|
||||||||||||
|
Total Investments
|
$
|
134,330,586
|
$
|
—
|
$
|
—
|
$
|
134,330,586
|
||||||||
|
Emerging Markets Value Fund
|
||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
Common Stocks
|
||||||||||||||||
|
Brazil
|
$
|
49,182,550
|
$
|
—
|
$
|
—
|
$
|
49,182,550
|
||||||||
|
China
|
222,640,077
|
—
|
—
|
222,640,077
|
||||||||||||
|
Hong Kong
|
73,994,704
|
—
|
—
|
73,994,704
|
||||||||||||
|
Hungary
|
20,504,683
|
—
|
—
|
20,504,683
|
||||||||||||
|
India
|
47,161,284
|
—
|
—
|
47,161,284
|
||||||||||||
|
Indonesia
|
21,135,738
|
—
|
—
|
21,135,738
|
||||||||||||
|
Peru
|
13,255,120
|
—
|
—
|
13,255,120
|
||||||||||||
|
Republic of Korea
|
157,356,509
|
—
|
—
|
157,356,509
|
||||||||||||
|
Romania
|
9,187,426
|
—
|
—
|
9,187,426
|
||||||||||||
|
Russian Federation
|
—
|
—
|
4,085
|
4,085
|
||||||||||||
|
Singapore
|
22,700,910
|
—
|
—
|
22,700,910
|
||||||||||||
|
South Africa
|
25,603,914
|
—
|
—
|
25,603,914
|
||||||||||||
|
Taiwan
|
150,421,307
|
—
|
—
|
150,421,307
|
||||||||||||
|
Thailand
|
20,013,426
|
13,403,720
|
—
|
33,417,146
|
||||||||||||
|
Turkey
|
8,104,911
|
—
|
—
|
8,104,911
|
||||||||||||
|
United Arab Emirates
|
21,718,183
|
—
|
—
|
21,718,183
|
||||||||||||
|
United Kingdom
|
23,385,358
|
—
|
—
|
23,385,358
|
||||||||||||
|
United States
|
49,704,058
|
—
|
—
|
49,704,058
|
||||||||||||
|
Total Common Stocks
|
936,070,158
|
13,403,720
|
4,085
|
949,477,963
|
||||||||||||
|
Preferred Stocks
|
||||||||||||||||
|
Brazil
|
54,896,916
|
—
|
—
|
54,896,916
|
||||||||||||
|
Total Preferred Stocks
|
54,896,916
|
—
|
—
|
54,896,916
|
||||||||||||
|
Short-Term Investment
|
46,205,232
|
—
|
—
|
46,205,232
|
||||||||||||
|
Total Investments
|
$
|
1,037,172,306
|
$
|
13,403,720
|
$
|
4,085
|
$
|
1,050,580,111
|
||||||||
56
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
|
Small Cap Value Fund
|
||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
Common Stocks
|
||||||||||||||||
|
Basic Materials
|
$
|
7,108,236
|
$
|
—
|
$
|
—
|
$
|
7,108,236
|
||||||||
|
Consumer Discretionary
|
13,365,269
|
—
|
—
|
13,365,269
|
||||||||||||
|
Consumer Staples
|
4,379,007
|
—
|
—
|
4,379,007
|
||||||||||||
|
Energy
|
4,552,943
|
—
|
—
|
4,552,943
|
||||||||||||
|
Financials
|
25,780,394
|
—
|
—
|
25,780,394
|
||||||||||||
|
Health Care
|
2,205,679
|
—
|
—
|
2,205,679
|
||||||||||||
|
Industrials
|
26,325,832
|
—
|
—
|
26,325,832
|
||||||||||||
|
Technology
|
7,240,006
|
—
|
—
|
7,240,006
|
||||||||||||
|
Total Common Stocks
|
90,957,366
|
—
|
—
|
90,957,366
|
||||||||||||
|
REIT
|
1,198,852
|
—
|
—
|
1,198,852
|
||||||||||||
|
Short-Term Investment
|
3,397,439
|
—
|
—
|
3,397,439
|
||||||||||||
|
Total Investments
|
$
|
95,553,657
|
$
|
—
|
$
|
—
|
$
|
95,553,657
|
||||||||
|
International Small Cap Value Fund
|
||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
Common Stocks
|
||||||||||||||||
|
Austria
|
$
|
549,736
|
$
|
—
|
$
|
—
|
$
|
549,736
|
||||||||
|
Canada
|
1,005,488
|
—
|
—
|
1,005,488
|
||||||||||||
|
France
|
1,066,941
|
—
|
—
|
1,066,941
|
||||||||||||
|
Germany
|
1,462,120
|
—
|
—
|
1,462,120
|
||||||||||||
|
Hong Kong
|
854,921
|
—
|
—
|
854,921
|
||||||||||||
|
Ireland
|
1,240,481
|
—
|
—
|
1,240,481
|
||||||||||||
|
Israel
|
353,843
|
—
|
—
|
353,843
|
||||||||||||
|
Italy
|
1,686,383
|
—
|
—
|
1,686,383
|
||||||||||||
|
Japan
|
3,617,385
|
—
|
—
|
3,617,385
|
||||||||||||
|
Netherlands
|
709,711
|
—
|
—
|
709,711
|
||||||||||||
|
Norway
|
461,267
|
—
|
—
|
461,267
|
||||||||||||
|
Republic of Korea
|
982,791
|
—
|
—
|
982,791
|
||||||||||||
|
Spain
|
800,140
|
—
|
—
|
800,140
|
||||||||||||
|
Taiwan
|
175,060
|
—
|
—
|
175,060
|
||||||||||||
|
United Kingdom
|
2,417,316
|
—
|
—
|
2,417,316
|
||||||||||||
|
Total Common Stocks
|
17,383,583
|
—
|
—
|
17,383,583
|
||||||||||||
|
Short-Term Investment
|
751,701
|
—
|
—
|
751,701
|
||||||||||||
|
Total Investments
|
$
|
18,135,284
|
$
|
—
|
$
|
—
|
$
|
18,135,284
|
||||||||
57
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
|
International Value Fund
|
||||||||||||||||
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
|
Common Stocks
|
||||||||||||||||
|
Brazil
|
$
|
888,748
|
$
|
—
|
$
|
—
|
$
|
888,748
|
||||||||
|
Canada
|
380,653
|
—
|
—
|
380,653
|
||||||||||||
|
China
|
1,409,533
|
—
|
—
|
1,409,533
|
||||||||||||
|
Denmark
|
593,544
|
—
|
—
|
593,544
|
||||||||||||
|
Finland
|
941,159
|
—
|
—
|
941,159
|
||||||||||||
|
France
|
7,105,058
|
—
|
—
|
7,105,058
|
||||||||||||
|
Germany
|
4,820,617
|
—
|
—
|
4,820,617
|
||||||||||||
|
Hong Kong
|
764,772
|
—
|
—
|
764,772
|
||||||||||||
|
Ireland
|
693,149
|
—
|
—
|
693,149
|
||||||||||||
|
Italy
|
894,467
|
—
|
—
|
894,467
|
||||||||||||
|
Japan
|
6,369,207
|
—
|
—
|
6,369,207
|
||||||||||||
|
Luxembourg
|
875,328
|
—
|
—
|
875,328
|
||||||||||||
|
Netherlands
|
3,003,687
|
—
|
—
|
3,003,687
|
||||||||||||
|
Republic of Korea
|
682,620
|
—
|
—
|
682,620
|
||||||||||||
|
Singapore
|
288,878
|
—
|
—
|
288,878
|
||||||||||||
|
Spain
|
889,704
|
—
|
—
|
889,704
|
||||||||||||
|
Switzerland
|
2,577,537
|
—
|
—
|
2,577,537
|
||||||||||||
|
Taiwan
|
826,072
|
—
|
—
|
826,072
|
||||||||||||
|
United Kingdom
|
7,282,118
|
—
|
—
|
7,282,118
|
||||||||||||
|
Total Common Stocks
|
41,286,851
|
—
|
—
|
41,286,851
|
||||||||||||
|
Preferred Stock
|
||||||||||||||||
|
Germany
|
695,493
|
—
|
—
|
695,493
|
||||||||||||
|
Total Preferred Stock
|
695,493
|
—
|
—
|
695,493
|
||||||||||||
|
Short-Term Investment
|
1,081,318
|
—
|
—
|
1,081,318
|
||||||||||||
|
Total Investments
|
$
|
43,063,662
|
$
|
—
|
$
|
—
|
$
|
43,063,662
|
||||||||
Refer to the Funds’ schedule of investments for a detailed break-out of securities.
Pzena Emerging Markets Value Fund
Level 3 Reconciliation Disclosure (Unaudited)
|
Common Stocks
|
||||
|
Balance as of February 28, 2022
|
$
|
5,377
|
||
|
Transfer into Level 3
|
4,085
|
|||
|
Transfer out of Level 3
|
(5,377
|
)
|
||
|
Balance as of February 28, 2023
|
$
|
4,085
|
||
|
Change in unrealized appreciation/(depreciation) during
|
||||
|
the period for Level 3 investments held at February 28, 2023
|
$
|
—
|
||
The Level 3 investments as of February 28, 2023 represented less than 0.01% of net assets and did not warrant a disclosure of significant unobservable valuation inputs.
On February 24, 2022, Russia commenced a military attack on Ukraine. The outbreak of hostilities between the two countries could result in more widespread conflict and could have a severe adverse effect
on the region and the markets. In addition, sanctions imposed on Russia by the United States and other countries, and any sanctions imposed in the future could have a significant adverse impact on the Russian economy and related markets. The price
and liquidity of investments may fluctuate widely as a result of the conflict and related events. How long such conflict and related events will last and whether it will escalate further cannot be predicted, nor its effect on the Funds.
58
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
The global outbreak of COVID-19 (commonly referred to as “coronavirus”) has disrupted economic markets and the prolonged economic impact is uncertain. Although vaccines for COVID-19 are becoming more
widely available, the ultimate economic fallout from the pandemic, amid the spread of COVID-19 variants, and the long-term impact on economies, markets, industries and individual companies are not known. The operational and financial performance of
individual companies and the market in general depends on future developments, including the duration and spread of any future outbreaks and the pace of recovery which may vary from market to market, and such uncertainty may in turn adversely affect
the value and liquidity of the Funds’ investments, impair the Funds’ ability to satisfy redemption requests, and negatively impact the Funds’ performance.
NOTE 4 – INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Funds have an investment advisory agreement with the Adviser pursuant to which the Adviser is responsible for providing investment management services to each Fund. The Adviser furnishes all
investment advice, office space and facilities, and provides most of the personnel needed by the Funds. As compensation for its services, the Adviser is entitled to a monthly management fee, based upon the average daily net assets of the Funds at
the annual rates of:
|
Mid Cap Value Fund
|
0.80%
|
|
|
Emerging Markets Value Fund
|
1.00%
|
|
|
Small Cap Value Fund
|
0.95%
|
|
|
International Small Cap Value Fund
|
1.00%
|
|
|
International Value Fund
|
0.65%
|
For the year ended February 28, 2023, the Funds incurred the following in advisory fees:
|
Advisory Fees
|
||||
|
Mid Cap Value Fund
|
$
|
1,010,329
|
||
|
Emerging Markets Value Fund
|
7,071,092
|
|||
|
Small Cap Value Fund
|
980,352
|
|||
|
International Small Cap Value Fund
|
146,412
|
|||
|
International Value Fund
|
206,488
|
|||
The Funds are responsible for their own operating expenses. The Adviser has contractually agreed to waive a portion or all of its management fees and pay expenses of the Funds to ensure that the net
annual operating expenses (excluding acquired fund fees, interest expense, taxes, dividends on securities sold short, extraordinary expenses, Rule 12b-1 fees, shareholder servicing fees, and other class-specific expenses) do not exceed the following
amounts of the average daily net assets for each class of shares:
|
Emerging
|
International
|
|||||
|
Mid Cap
|
Markets
|
Small Cap
|
Small Cap
|
International
|
||
|
Value Fund
|
Value Fund
|
Value Fund(a)
|
Value Fund
|
Value Fund
|
||
|
0.90%
|
1.08%
|
1.00%
|
1.17%
|
0.74%
|
|
(a)
|
Effective June 1, 2022, the Board approved an amendment to the Operating Expense Limitation Agreement between the Trust, on behalf of the Pzena Small Cap Value Fund (the “Fund”) and the Adviser,
pursuant to which the Adviser has agreed to reduce the operating expense limit for the Fund from 1.10% to 1.00%.
|
Any such reduction made by the Adviser in its fees or payment of expenses which are the Funds’ obligation are subject to reimbursement by the Funds to the Adviser, if so requested by the Adviser, in any
subsequent month in the 36-month period from the date of the management fee reduction and expense payment if the aggregate amount actually paid by the Funds toward the operating expenses for such fiscal year (taking into account the reimbursement)
will not cause the Funds to exceed the lesser of: (1) the expense limitation in place at the time of the management fee reduction and expense payment; or (2) the expense limitation in place at the time of the reimbursement. Any such reimbursement is
also contingent upon Board review and approval. Such reimbursement may not be paid prior to the Funds’ payment of current ordinary operating expenses. For the year ended February 28, 2023, the Adviser reduced its fees and reduced other operating
expenses in the amount of $98,328 for the Mid Cap Value Fund, $485,364 for the Emerging Markets Value Fund, $159,587 for the Small Cap Value Fund, $195,567 for the International Small Cap Value Fund, and $235,358 for the International Value Fund.
The Adviser may recapture portions of the amounts shown below no later than the corresponding dates:
59
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
|
2/29/2024
|
2/28/2025
|
2/28/2026
|
Total
|
|||||||||||||
|
Mid Cap Value Fund
|
$
|
131,027
|
$
|
86,609
|
$
|
98,328
|
$
|
315,964
|
||||||||
|
Emerging Markets Value Fund
|
401,667
|
351,524
|
485,364
|
1,238,555
|
||||||||||||
|
Small Cap Value Fund
|
121,914
|
68,655
|
159,587
|
350,156
|
||||||||||||
|
International Small Cap Value Fund
|
158,624
|
209,293
|
195,567
|
563,484
|
||||||||||||
|
International Value Fund
|
N/A
|
151,402
|
235,358
|
386,760
|
||||||||||||
Fund Services serves as the Funds’ administrator, fund accountant, and transfer agent. U.S. Bank N.A. serves as custodian (the “Custodian”) to the Funds. The Custodian is an affiliate of Fund Services. Fund Services
maintains the Funds’ books and records, calculates the Funds’ NAV, prepares various federal and state regulatory filings, coordinates the payment of fund expenses, reviews expense accruals and prepares materials supplied to the Board. The officers
of the Trust and the Chief Compliance Officer are also employees of Fund Services. Fees paid by the Funds for administration and accounting, transfer agency, custody and compliance services for the year ended February 28, 2023 are disclosed in the
statements of operations.
Quasar Distributors, LLC (“Quasar” or the “Distributor”) acts as the Funds’ principal underwriter in a continuous public offering of the Fund’s shares. Quasar is a wholly-owned broker-dealer subsidiary
of Foreside Financial Group, LLC, doing business as ACA Foreside, a division of ACA Group.
NOTE 5 – 12b-1 DISTRIBUTION FEES
The Funds have adopted a Distribution Plan pursuant to Rule 12b-1 (the “Plan”). The Plan permits the Funds to pay for distribution and related expenses at an annual rate of up to 0.25% of the average
daily net assets of the Funds’ Investor Class shares. The expenses covered by the Plan may include the cost in connection with the promotion and distribution of shares and the provision of personal services to shareholders, including, but not
necessarily limited to, advertising, compensation to underwriters, dealers and selling personnel, the printing and mailing of prospectuses to other than current Fund shareholders, and the printing and mailing of sales literature. Payments made
pursuant to the Plan will represent compensation for distribution and service activities, not reimbursements for specific expenses incurred. For the year ended February 28, 2023, the 12b-1 distribution fees incurred under the Plan by each of the
Fund’s Investor Class shares are disclosed in the statements of operations.
NOTE 6 – SHAREHOLDER SERVICING FEES
The Funds have entered into a shareholder servicing agreement (the “Agreement”) with the Adviser, under which the Adviser will provide, or arrange for others to provide, certain specified shareholder
services. As compensation for the provision of shareholder services, the Funds may pay servicing fees at an annual rate of up to 0.10% of the average daily net assets of the Investor Class shares. Payments to the Adviser under the Agreement may
reimburse the Adviser for payments it makes to selected brokers, dealers and administrators which have entered into service agreements with the Adviser for services provided to shareholders of each Fund. The services provided by such intermediaries
are primarily designed to assist shareholders of the Funds and include the furnishing of office space and equipment, telephone facilities, personnel, and assistance to the Funds in servicing such shareholders. Services provided by such
intermediaries also include the provision of support services to the Funds and include establishing and maintaining shareholders’ accounts and record processing, purchase and redemption transactions, answering routine client inquiries regarding the
Funds, and providing such other personal services to shareholders as the Funds may reasonably request. For the year ended February 28, 2023, the shareholder servicing fees incurred under the Agreement by each of the Fund’s Investor Class shares are
disclosed in the statements of operations.
NOTE 7 – PURCHASES AND SALES OF SECURITIES
For the year ended February 28, 2023, the cost of purchases and the proceeds from sales of securities, excluding short-term securities, were as follows:
|
Purchases
|
Sales
|
|||||||
|
Mid Cap Value Fund
|
$
|
43,709,158
|
$
|
46,733,636
|
||||
|
Emerging Markets Value Fund
|
591,593,157
|
100,653,616
|
||||||
|
Small Cap Value Fund
|
28,872,058
|
57,243,621
|
||||||
|
International Small Cap Value Fund
|
4,800,491
|
3,674,151
|
||||||
|
International Value Fund
|
22,060,000
|
5,900,058
|
||||||
There were no purchases or sales of long-term U.S. Government securities.
60
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
NOTE 8 – CONTROL OWNERSHIP
The beneficial ownership, either directly or indirectly of more than 25% of the voting securities of a Fund creates a presumption of control of the Fund, under Section 2(a)(9) of the 1940 Act. The
following table reflects shareholders that maintain accounts of more than 25% of the voting securities of a Fund as of February 28, 2023:
|
Fund
|
Shareholder
|
Percent of Shares Held
|
|
|
Mid Cap Value Fund
|
Mac & Co.
|
46%
|
|
|
Emerging Markets Value Fund
|
National Financial Services, LLC
|
40%
|
|
|
Small Cap Value Fund
|
Charles Schwab & Co.
|
32%
|
|
|
National Financial Services, LLC
|
31%
|
||
|
Pershing, LLC
|
27%
|
||
|
International Small Cap Value Fund
|
J.P. Morgan Securities, LLC
|
48%
|
|
|
ValueQuest Partners, LLC
|
35%
|
||
|
International Value Fund
|
J.P. Morgan Securities, LLC
|
33%
|
NOTE 9 – LINE OF CREDIT
The Funds have a secured line of credit in the amount of $50,000,000. This line of credit is intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with
shareholder redemptions. The credit facility is with the Funds’ custodian, U.S. Bank N.A. During the year ended February 28, 2023, the Emerging Markets Value Fund, the International Small Cap Value Fund, and the International Value Fund did not draw
upon the line of credit. During the year ended February 28, 2023, the Mid Cap Value Fund had an average daily outstanding balance of $95,814, a weighted average interest rate of 7.48%, incurred interest expense of $7,267 and had a maximum amount
outstanding of $9,275,000. The Small Cap Value Fund had an average daily outstanding balance of $155,088, a weighted average interest rate of 5.92%, incurred interest expense of $9,313 and had a maximum amount outstanding of $3,478,000. At February
28, 2023, the Funds had no outstanding loan amounts.
NOTE 10 – INCOME TAXES AND DISTRIBUTIONS TO SHAREHOLDERS
As of February 28, 2023, the components of accumulated earnings/(losses) on a tax basis were as follows:
|
Emerging
|
International
|
|||||||||||||||||||
|
Mid Cap
|
Markets
|
Small Cap
|
Small Cap
|
International
|
||||||||||||||||
|
Value Fund
|
Value Fund
|
Value Fund
|
Value Fund
|
Value Fund
|
||||||||||||||||
|
Cost of investments (a)
|
$
|
109,087,975
|
$
|
1,025,500,945
|
$
|
90,782,133
|
$
|
17,425,407
|
$
|
40,668,967
|
||||||||||
|
Gross unrealized appreciation
|
32,806,114
|
109,735,760
|
14,791,716
|
2,517,268
|
5,579,162
|
|||||||||||||||
|
Gross unrealized depreciation
|
(7,563,503
|
)
|
(84,656,594
|
)
|
(10,020,192
|
)
|
(1,807,391
|
)
|
(3,184,467
|
)
|
||||||||||
|
Net unrealized appreciation (a)
|
25,242,611
|
25,079,166
|
4,771,524
|
709,877
|
2,394,695
|
|||||||||||||||
|
Net unrealized depreciation on foreign currency
|
(6
|
)
|
(110,764
|
)
|
—
|
(1,885
|
)
|
(647
|
)
|
|||||||||||
|
Undistributed ordinary income
|
251,091
|
5,068,062
|
238,366
|
14,509
|
92,956
|
|||||||||||||||
|
Undistributed long-term capital gains
|
3,441,486
|
—
|
—
|
—
|
—
|
|||||||||||||||
|
Total distributable earnings
|
3,692,577
|
5,068,062
|
238,366
|
14,509
|
92,956
|
|||||||||||||||
|
Other accumulated gain/loss
|
—
|
(18,918,394
|
)
|
—
|
(84,494
|
)
|
(702,917
|
)
|
||||||||||||
|
Total accumulated earnings
|
$
|
28,935,182
|
$
|
11,118,070
|
$
|
5,009,890
|
$
|
638,007
|
$
|
1,784,087
|
||||||||||
|
(a)
|
The difference between the book basis and tax basis net unrealized appreciation/(depreciation) and cost is attributable primarily to the tax deferral of losses on wash sales adjustments and passive foreign
investment companies.
|
61
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
At February 28, 2023, the Funds had tax basis capital losses to offset future gains as follows:
|
Capital Loss Carryover
|
|||||||||||||
|
Long-Term
|
Short-Term
|
Total
|
Expiration Date
|
||||||||||
|
Pzena Emerging Markets Value Fund
|
$
|
17,474,043
|
$
|
1,444,351
|
$
|
18,918,394
|
No Expiration
|
||||||
|
Pzena International Value Fund
|
226,759
|
476,158
|
702,917
|
No Expiration
|
|||||||||
At February 28, 2023, the following Fund deferred, on a tax basis, post-October losses:
|
Post-October
|
Late Year Ordinary
|
|
|
Capital Loss
|
Loss Deferral
|
|
|
International Small Cap Value Fund
|
$84,494
|
$ —
|
The tax character of distributions paid during the years ended February 28, 2023 and February 28, 2022 was as follows:
|
Year Ended
|
Year Ended
|
|||||||
|
February 28, 2023
|
February 28, 2022
|
|||||||
|
Mid Cap Value Fund
|
||||||||
|
Ordinary income
|
$
|
1,738,933
|
$
|
3,737,482
|
||||
|
Long-term capital gains
|
15,241,488
|
8,611,060
|
||||||
|
Emerging Markets Value Fund
|
||||||||
|
Ordinary income
|
$
|
16,166,313
|
$
|
11,333,096
|
||||
|
Long-term capital gains
|
2,437,456
|
2,631,828
|
||||||
|
Small Cap Value Fund
|
||||||||
|
Ordinary income
|
$
|
1,171,434
|
$
|
1,628,429
|
||||
|
Long-term capital gains
|
11,308,345
|
88,885
|
||||||
|
International Small Cap Value Fund
|
||||||||
|
Ordinary income
|
$
|
554,897
|
$
|
137,637
|
||||
|
Long-term capital gains
|
150,406
|
25,763
|
||||||
|
International Value Fund
|
||||||||
|
Ordinary income
|
$
|
779,200
|
$
|
95,661
|
||||
NOTE 11 – PRINCIPAL RISKS
Below is a summary of some, but not all, of the principal risks of investing in the Funds, each of which may adversely affect a Fund’s net asset value and total return. The Funds’ most recent prospectus
provides further descriptions of each Fund’s investment objective, principal investment strategies and principal risks. The following risks apply to all Funds, unless specifically noted.
• Currency Risk. Changes in foreign currency exchange rates will affect the value of what the Funds own and the Funds’ share price. Generally, when the U.S.
dollar rises in value against a foreign currency, an investment in that country loses value because that currency is worth fewer U.S. dollars. Devaluation of a currency by a country’s government or banking authority also will have a significant
impact on the value of any investments denominated in that currency. Currency markets generally are not as regulated as securities markets and the risk may be higher in emerging markets.
• Emerging Markets Risk. In addition to the risks of foreign securities in general, investments in emerging markets may be riskier than investments in or exposure
to investments in the U.S. and other developed markets for many reasons, including smaller market capitalizations, greater price volatility, less liquidity, a higher degree of political and economic instability (which can freeze, restrict or suspend
transactions in those investments, including cash), the impact of economic sanctions, less governmental regulation and supervision of the financial industry and markets, and less stringent financial reporting and accounting standards and controls.
• Equity Securities Risk. The price of equity securities may rise or fall because of economic or political changes or changes in a company’s financial condition,
sometimes rapidly or unpredictably. These price movements may result from factors affecting individual companies, sectors or industries selected for the Funds’ portfolio or the securities market as a whole, such as changes in economic or political
conditions.
62
Pzena Funds
Notes to Financial Statements (Continued)
February 28, 2023
• Foreign Securities Risk. Investing in foreign securities typically involves more risks than investing in U.S. securities, and includes risks associated with:
(i) internal and external political and economic developments – e.g., the political, economic and social policies and structures of some foreign countries may be less stable and more volatile than those in
the U.S. or some foreign countries may be subject to trading restrictions or economic sanctions; (ii) trading practices – e.g., government supervision and regulation of foreign securities and currency
markets, trading systems and brokers may be less than in the U.S.; (iii) availability of information – e.g., foreign issuers may not be subject to the same disclosure, accounting and financial reporting
standards and practices as U.S. issuers; (iv) limited markets – e.g., the securities of certain foreign issuers may be less liquid (harder to sell) and more volatile; and (v) currency exchange rate
fluctuations and policies.
• Management Risk. Each Fund is an actively managed investment portfolio and each Fund relies on the Adviser’s ability to pursue the Fund’s goal. The Adviser will
apply its investment techniques and risk analyses in making investment decisions for the Funds, but there can be no guarantee that its decisions will produce the desired results.
• Market and Regulatory Risk. Events in the financial markets and economy may cause volatility and uncertainty and adversely affect performance. Such adverse
effect on performance could include a decline in the value and liquidity of securities held by the Funds, unusually high and unanticipated levels of redemptions, an increase in portfolio turnover, a decrease in NAV, and an increase in Fund expenses.
It may also be unusually difficult to identify both investment risks and opportunities, in which case investment goals may not be met. Market events may affect a single issuer, industry, sector, or the market as a whole. In addition, because of
interdependencies between markets, events in one market may adversely impact markets or issuers in which the Fund invests in unforeseen ways. Traditionally liquid investments may experience periods of diminished liquidity. During a general downturn
in the financial markets, multiple asset classes may decline in value and the Fund may lose value, even if the individual results of the securities and other instruments in which the Fund invests outperform the broader financial markets. It is
impossible to predict whether or for how long such market events will continue, particularly if they are unprecedented, unforeseen or widespread events or conditions. Therefore it is important to understand that the value of your investment may fall,
sometimes sharply and for extended periods, and you could lose money. Governmental and regulatory actions, including tax law changes, may also impair portfolio management and have unexpected or adverse consequences on particular markets, strategies,
or investments. In addition, unexpected events and their aftermaths, such as the spread of deadly diseases; natural, environmental or man-made disasters; financial, political or social disruptions; terrorism and war; and other tragedies or
catastrophes, can cause investor fear and panic, which can adversely affect the economies of many companies, sectors, nations, regions, and the market in general, in ways that cannot necessarily be foreseen.
• Mid Cap Company Risk (Mid Cap Value Fund). A mid cap company may be more vulnerable to adverse business or economic events than stocks of larger companies.
These stocks present greater risks than securities of larger, more diversified companies.
• Small Cap Company Risk (Small Cap Value Fund and International Small Cap Value Fund). Securities of companies with smaller market capitalizations tend to be
more volatile and less liquid than larger company stocks. Smaller companies may have no or relatively short operating histories, or be newly public companies.
• Value Style Investing Risk. The Funds emphasize a “value” style of investing, which targets undervalued companies with characteristics for improved valuations.
This style of investing is subject to the risk that the valuations never improve or that the returns on “value” securities may not move in tandem with the returns on other styles of investing or the stock market in general.
NOTE 12 – TRUSTEES AND OFFICERS
At a meeting held December 7-8, 2022, by vote of the majority of the Board of Trustees (not including Mr. Joe Redwine), Mr. Redwine’s term as Trustee was extended for three additional years. Ms. Michele
Rackey was approved as an Independent Trustee effective January 1, 2023. Mr. Kevin Hayden was approved by the Board as Vice President, Treasurer and Ms. Cheryl King was approved as Assistant Treasurer effective January 1, 2023. Ryan Charles resigned
as Assistant Secretary effective January 1, 2023.
63
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees of Advisors Series Trust and
Shareholders of Pzena Funds
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of the Pzena Mid Cap Value Fund, Pzena Emerging Markets Value Fund, Pzena Small Cap Value Fund, Pzena International Small Cap Value
Fund, and Pzena International Value Fund (the “Funds”), each a series of Advisors Series Trust (the “Trust”), including the schedules of investments, as of February 28, 2023, the related statements of operations, the statements of changes in net
assets, and the financial highlights for each of the periods indicated in table below, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects,
the financial position of the Funds as of February 28, 2023, the results of their operations, the changes in their net assets and their financial highlights for each of the periods indicated in the table below, in conformity with accounting
principles generally accepted in the United States of America.
|
Individual Funds
|
Statement of
|
Statements of
|
|
|
constituting Pzena Funds
|
operations
|
changes in net assets
|
Financial highlights
|
|
Pzena Mid Cap Value Fund,
|
For the year ended
|
For each of the two years
|
For each of the five years in the
|
|
Pzena Emerging Markets Value Fund
|
February 28, 2023
|
in the period ended
|
period ended February 28, 2023
|
|
and Pzena Small Cap Value Fund
|
February 28, 2023
|
||
|
Pzena International
|
For the year ended
|
For each of the two years
|
For each of the four years in the
|
|
Small Cap Value Fund
|
February 28, 2023
|
in the period ended
|
period ended February 28, 2023
|
|
February 28, 2023
|
and for the period July 2, 2018
|
||
|
(commencement of operations)
|
|||
|
through February 28, 2019
|
|||
|
Pzena International Value Fund
|
For the year ended
|
For the year ended
|
For the year ended
|
|
February 28, 2023
|
February 28, 2023 and for
|
February 28, 2023 and for
|
|
|
the period June 28, 2021
|
the period June 28, 2021
|
||
|
(commencement of operations)
|
(commencement of operations)
|
||
|
through February 28, 2022
|
through February 28, 2022
|
Basis for Opinion
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB. We have served as the auditor of one or more of the funds in the Trust since 2003.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of the Funds’ internal control over financial reporting. As part of our audits we are required to obtain
an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of February 28, 2023 by correspondence with the custodian and brokers; when replies were not received from brokers, we
performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
TAIT, WELLER & BAKER LLP
Philadelphia, Pennsylvania
April 28, 2023
64
Pzena Funds
Expense Example
February 28, 2023 (Unaudited)
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs including sales charges (loads), if applicable; redemption fees, if applicable; and exchange fees; and (2) ongoing costs,
including management fees; distribution and/or service (12b-1 fees); and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs
of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period indicated and held for the entire period (September 1, 2022 to February 28, 2023).
Actual Expenses
The first line of the tables below provides information about actual account values and actual expenses. The example below includes, but is not limited to, management fees, fund accounting, custody and
transfer agent fees. However, the example below does not include portfolio trading commissions and related expenses. In addition, you will be assessed fees for outgoing wire transfers, returned checks, and stop payment orders at prevailing rates
changes by U.S. Bancorp Fund Services, LLC, the Funds’ transfer agent. You may use the information in these columns, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by
$1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the row entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the tables below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio and assumed rate of return of 5% per year
before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the
ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are
meant to highlight your ongoing costs only and will not help you determine the relative total costs of owning different funds, as they may charge transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the
second line of each table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
65
Pzena Funds
Expense Example (Continued)
February 28, 2023 (Unaudited)
|
Beginning
|
Ending
|
Expenses Paid
|
Expense Ratio
|
Six Month
|
|
|
Account Value
|
Account Value
|
During Period(1)
|
During Period
|
Total Return
|
|
|
Investor Class
|
9/1/22
|
2/28/23
|
9/1/22 – 2/28/23
|
9/1/22 – 2/28/23
|
9/1/22 – 2/28/23
|
|
Actual
|
|||||
|
Mid Cap Value Fund
|
$1,000.00
|
$1,135.90
|
$6.57
|
1.24%
|
13.59%
|
|
Emerging Markets Value Fund
|
1,000.00
|
1,051.40
|
7.27
|
1.43%
|
5.14%
|
|
Small Cap Value Fund
|
1,000.00
|
1,164.30
|
7.14
|
1.33%
|
16.43%
|
|
International Small Cap Value Fund
|
1,000.00
|
1,250.70
|
8.09
|
1.45%
|
25.07%
|
|
International Value Fund
|
1,000.00
|
1,209.50
|
5.42
|
0.99%
|
20.95%
|
|
Hypothetical
|
|||||
|
(5% return before expenses)
|
|||||
|
Mid Cap Value Fund
|
$1,000.00
|
$1,018.65
|
$6.21
|
1.24%
|
2.48%
|
|
Emerging Markets Value Fund
|
1,000.00
|
1,017.70
|
7.15
|
1.43%
|
2.48%
|
|
Small Cap Value Fund
|
1,000.00
|
1,018.20
|
6.66
|
1.33%
|
2.48%
|
|
International Small Cap Value Fund
|
1,000.00
|
1,017.60
|
7.25
|
1.45%
|
2.48%
|
|
International Value Fund
|
1,000.00
|
1,019.89
|
4.96
|
0.99%
|
2.48%
|
|
(1)
|
Each Fund’s expenses are equal to the expense ratio multiplied by the average account value over the period, multiplied by 181/365 days (to reflect the six-month period of operation of the
Funds). The ending account values in the table are based on the actual total returns of the Investor Class shares of each Fund.
|
|
Beginning
|
Ending
|
Expenses Paid
|
Expense Ratio
|
Six Month
|
|
|
Account Value
|
Account Value
|
During Period(2)
|
During Period
|
Total Return
|
|
|
Institutional Class
|
9/1/22
|
2/28/23
|
9/1/22 – 2/28/23
|
9/1/22 – 2/28/23
|
9/1/22 – 2/28/23
|
|
Actual
|
|||||
|
Mid Cap Value Fund
|
$1,000.00
|
$1,138.10
|
$4.77
|
0.90%
|
13.81%
|
|
Emerging Markets Value Fund
|
1,000.00
|
1,051.40
|
5.50
|
1.08%
|
5.31%
|
|
Small Cap Value Fund
|
1,000.00
|
1,164.30
|
5.53
|
1.03%
|
16.45%
|
|
International Small Cap Value Fund
|
1,000.00
|
1,250.70
|
6.54
|
1.17%
|
25.29%
|
|
International Value Fund
|
1,000.00
|
1,210.40
|
4.06
|
0.74%
|
21.04%
|
|
Hypothetical
|
|||||
|
(5% return before expenses)
|
|||||
|
Mid Cap Value Fund
|
$1,000.00
|
$1,020.33
|
$4.51
|
0.90%
|
2.48%
|
|
Emerging Markets Value Fund
|
1,000.00
|
1,019.44
|
5.41
|
1.08%
|
2.48%
|
|
Small Cap Value Fund
|
1,000.00
|
1,019.69
|
5.16
|
1.03%
|
2.48%
|
|
International Small Cap Value Fund
|
1,000.00
|
1,018.99
|
5.86
|
1.17%
|
2.48%
|
|
International Value Fund
|
1,000.00
|
1,021.12
|
3.71
|
0.74%
|
2.48%
|
|
(2)
|
Each Fund’s expenses are equal to the expense ratio multiplied by the average account value over the period, multiplied by 181/365 days (to reflect the six-month period of operation of the
Funds). The ending account values in the table are based on the actual total returns of the Institutional Class shares of each Fund.
|
66
Pzena Funds
Information about Trustees and Officers (Unaudited)
This chart provides information about the Trustees and Officers who oversee the Funds. Officers elected by the Trustees manage the day-to-day operations of the Funds and execute policies formulated by
the Trustees.
|
Term of
|
Number of
|
||||
|
Office
|
Portfolios
|
Other
|
|||
|
and
|
in Fund
|
Directorships
|
|||
|
Position
|
Length
|
Complex
|
Held During
|
||
|
Name, Address
|
Held with
|
of Time
|
Principal Occupation
|
Overseen by
|
Past Five
|
|
and Age
|
the Trust
|
Served*
|
During Past Five Years
|
Trustee(2)
|
Years(3)
|
|
Independent Trustees(1)
|
|||||
|
David G. Mertens
|
Trustee
|
Indefinite
|
Partner and Head of Business
|
5
|
Trustee, Advisors Series
|
|
(age 62)
|
term;
|
Development Ballast Equity
|
Trust (for series not
|
||
|
615 E. Michigan Street
|
since
|
Management, LLC (a privately-
|
affiliated with the
|
||
|
Milwaukee, WI 53202
|
March
|
held investment advisory firm)
|
Funds).
|
||
|
2017.
|
(February 2019 to present);
|
||||
|
Managing Director and Vice
|
|||||
|
President, Jensen Investment
|
|||||
|
Management, Inc. (a privately-
|
|||||
|
held investment advisory firm)
|
|||||
|
(2002 to 2017).
|
|||||
|
Joe D. Redwine
|
Trustee
|
Indefinite
|
Retired; formerly Manager,
|
5
|
Trustee, Advisors Series
|
|
(age 75)
|
term;
|
President, CEO, U.S. Bancorp
|
Trust (for series not
|
||
|
615 E. Michigan Street
|
since
|
Fund Services, LLC and its
|
affiliated with the
|
||
|
Milwaukee, WI 53202
|
September
|
predecessors (May 1991 to
|
Funds).
|
||
|
2008.
|
July 2017).
|
||||
|
Raymond B. Woolson
|
Chairman
|
Indefinite
|
President, Apogee Group, Inc.
|
5
|
Trustee, Advisors Series
|
|
(age 64)
|
of the
|
term;
|
(financial consulting firm)
|
Trust (for series not
|
|
|
615 E. Michigan Street
|
Board
|
since
|
(1998 to present).
|
affiliated with the
|
|
|
Milwaukee, WI 53202
|
January
|
Funds); Independent
|
|||
|
2020.
|
Trustee, DoubleLine
|
||||
|
Trustee
|
Indefinite
|
Funds Trust (an open-end
|
|||
|
term;
|
investment company
|
||||
|
since
|
with 19 portfolios),
|
||||
|
January
|
DoubleLine
|
||||
|
2016.
|
Opportunistic Credit
|
||||
|
Fund, DoubleLine
|
|||||
|
Income Solutions Fund,
|
|||||
|
and DoubleLine Yield
|
|||||
|
Opportunities Fund from
|
|||||
|
2010 to present;
|
|||||
|
Independent Trustee,
|
|||||
|
DoubleLine ETF Trust
|
|||||
|
(an open-end investment
|
|||||
|
company with
|
|||||
|
2 portfolios) from
|
|||||
|
March 2022 to present.
|
67
Pzena Funds
Information about Trustees and Officers (Unaudited) (Continued)
|
Term of
|
Number of
|
||||
|
Office
|
Portfolios
|
Other
|
|||
|
and
|
in Fund
|
Directorships
|
|||
|
Position
|
Length
|
Complex
|
Held During
|
||
|
Name, Address
|
Held with
|
of Time
|
Principal Occupation
|
Overseen by
|
Past Five
|
|
and Age
|
the Trust
|
Served*
|
During Past Five Years
|
Trustee(2)
|
Years(3)
|
|
Michele Rackey
|
Trustee
|
Indefinite
|
Chief Executive Officer,
|
5
|
Trustee, Advisors Series
|
|
(age 64)
|
term;
|
Government Employees Benefit
|
Trust (for series not
|
||
|
615 E. Michigan Street
|
since
|
Association (GEBA) (benefits
|
affiliated with the
|
||
|
Milwaukee, WI 53202
|
January
|
and wealth management
|
Funds).
|
||
|
2023.
|
organization) (2004 to 2020);
|
||||
|
Board Member, Association
|
|||||
|
Business Services Inc. (ABSI)
|
|||||
|
(for-profit subsidiary of the
|
|||||
|
American Society of Association
|
|||||
|
Executives) (2019 to present).
|
|
Term of
|
|||
|
Office
|
|||
|
and
|
|||
|
Position
|
Length
|
||
|
Name, Address
|
Held with
|
of Time
|
Principal Occupation
|
|
and Age
|
the Trust
|
Served
|
During Past Five Years
|
|
Officers
|
|||
|
Jeffrey T. Rauman
|
President,
|
Indefinite
|
Senior Vice President, Compliance and Administration, U.S. Bank Global
|
|
(age 54)
|
Chief
|
term;
|
Fund Services (February 1996 to present).
|
|
615 E. Michigan Street
|
Executive
|
since
|
|
|
Milwaukee, WI 53202
|
Officer and
|
December
|
|
|
Principal
|
2018.
|
||
|
Executive
|
|||
|
Officer
|
|||
|
Kevin J. Hayden
|
Vice
|
Indefinite
|
Vice President, Compliance and Administration, U.S. Bank Global
|
|
(age 51)
|
President,
|
term;
|
Fund Services (June 2005 to present).
|
|
615 E. Michigan Street
|
Treasurer
|
since
|
|
|
Milwaukee, WI 53202
|
and
|
January
|
|
|
Principal
|
2023.
|
||
|
Financial
|
|||
|
Officer
|
|||
|
Cheryl L. King
|
Assistant
|
Indefinite
|
Vice President, Compliance and Administration, U.S. Bank Global
|
|
(age 61)
|
Treasurer
|
term;
|
Fund Services (October 1998 to present).
|
|
615 E. Michigan Street
|
since
|
||
|
Milwaukee, WI 53202
|
January
|
||
|
2023.
|
|||
|
Richard R. Conner
|
Assistant
|
Indefinite
|
Assistant Vice President, Compliance and Administration, U.S. Bank Global
|
|
(age 40)
|
Treasurer
|
term;
|
Fund Services (July 2010 to present).
|
|
615 E. Michigan Street
|
since
|
||
|
Milwaukee, WI 53202
|
December
|
||
|
2018.
|
68
Pzena Funds
Information about Trustees and Officers (Unaudited) (Continued)
|
Term of
|
|||
|
Office
|
|||
|
and
|
|||
|
Position
|
Length
|
||
|
Name, Address
|
Held with
|
of Time
|
Principal Occupation
|
|
and Age
|
the Trust
|
Served
|
During Past Five Years
|
|
Michael L. Ceccato
|
Vice
|
Indefinite
|
Senior Vice President, U.S. Bank Global Fund Services and
|
|
(age 65)
|
President,
|
term;
|
Senior Vice President, U.S. Bank N.A. (February 2008 to present).
|
|
615 E. Michigan Street
|
Chief
|
since
|
|
|
Milwaukee, WI 53202
|
Compliance
|
September
|
|
|
Officer and
|
2009.
|
||
|
AML Officer
|
|||
|
Elaine E. Richards
|
Vice
|
Indefinite
|
Senior Vice President, U.S. Bank Global Fund Services
|
|
(age 54)
|
President
|
term;
|
(July 2007 to present).
|
|
2020 East Financial Way,
|
and
|
since
|
|
|
Suite 100
|
Secretary
|
September
|
|
|
Glendora, CA 91741
|
2019.
|
|
*
|
The Trustees have designated a mandatory retirement age of 75, such that each Trustee, serving as such on the date he or she reaches the age of 75, shall submit his or her resignation not later
than the last day of the calendar year in which his or her 75th birthday occurs (“Retiring Trustee”). Upon request, the Board may, by vote of a majority of Trustees eligible to vote on such matter, determine whether or not to extend such
Retiring Trustee’s term and on the length of a one-time extension of up to three additional years. At a meeting held December 7-8, 2022, by vote of the majority of the Board of Trustees (not including Mr. Joe Redwine), Mr. Redwine’s term as
Trustee was extended for three additional years to expire December 31, 2025.
|
|
(1)
|
The Trustees of the Trust who are not “interested persons” of the Trust as defined under the 1940 Act (“Independent Trustees”).
|
|
(2)
|
As of February 28,2023, the Trust was comprised of 35 active portfolios managed by unaffiliated investment advisers. The term “Fund Complex” applies only to the Funds. The Funds do not hold
themselves out as related to any other series within the Trust for investment purposes, nor do they share the same investment adviser with any other series.
|
|
(3)
|
“Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the Securities Exchange Act of 1934, as amended, (that is, “public
companies”) or other investment companies registered under the 1940 Act.
|
The Statement of Additional Information includes additional information about the Funds’ Trustees and Officers and is available, without charge, upon request by calling 1-844-PZN-1996 (1-844-796-1996).
69
Pzena Funds
Approval of Investment Advisory Agreement (Unaudited)
Pzena Mid Cap Value Fund
Pzena Emerging Markets Value Fund
Pzena Small Cap Value Fund
Pzena International Small Cap Value Fund
Pzena International Value Fund
At meetings held on October 18, 2022 and December 7-8, 2022, the Board (which is comprised of three persons, all of whom are Independent Trustees as defined under the Investment
Company Act of 1940, as amended), considered and approved, for another annual term, the continuance of the investment advisory agreement (the “Advisory Agreement”) between Advisors Series Trust (the “Trust”) and Pzena Investment Management, LLC (the
“Adviser”) on behalf of the Pzena Mid Cap Value Fund (the “Mid Cap Fund”), Pzena Emerging Markets Value Fund (the “Emerging Markets Fund”), Pzena Small Cap Value Fund (the “Small Cap Fund”), Pzena International Small Cap Value Fund (“International
Small-Cap Fund”) and Pzena International Value Fund (“International Fund”) (each, a “Fund,” and together, the “Funds”). At both meetings, the Board received and reviewed substantial information regarding the Funds, the Adviser and the services
provided by the Adviser to the Funds under the Advisory Agreement. This information, together with the information provided to the Board throughout the course of the year, formed the primary (but not exclusive) basis for the Board’s determinations.
Below is a summary of the factors considered by the Board and the conclusions that formed the basis for the Board’s approval of the continuance of the Advisory Agreement:
|
1.
|
THE NATURE, EXTENT AND QUALITY OF THE SERVICES PROVIDED AND TO BE PROVIDED BY THE ADVISER UNDER THE ADVISORY AGREEMENT. The Board considered the nature, extent and quality of the Adviser’s
overall services provided to the Funds, as well as its specific responsibilities in all aspects of day-to-day investment management of the Funds. The Board considered the qualifications, experience and responsibilities of the portfolio
managers, as well as the responsibilities of other key personnel of the Adviser involved in the day-to-day activities of the Funds, noting that the Adviser currently serves as investment sub-adviser to a number of mutual funds not affiliated
with the Trust and previously managed its own family of proprietary mutual funds. The Board also considered the resources and compliance structure of the Adviser, including information regarding its compliance program, its chief compliance
officer and the Adviser’s compliance record, as well as the Adviser’s cybersecurity program, liquidity risk management program, business continuity plan, and risk management process. The Board further considered its knowledge of the Adviser’s
operations and noted that during the course of the prior year they had met with certain personnel of the Adviser to discuss the Funds’ performance and investment outlook as well as various marketing and compliance topics. The Board concluded
that the Adviser had the quality and depth of personnel, resources, investment processes and compliance policies and procedures essential to performing its duties under the Advisory Agreement and that they were satisfied with the nature,
overall quality and extent of such management services.
|
|
|
2.
|
THE FUNDS HISTORICAL PERFORMANCE AND THE OVERALL PERFORMANCE OF THE ADVISER. In assessing the quality of the portfolio management delivered by the Adviser, the Board reviewed the short-term and
long-term performance of the Funds as of June 30, 2022 on both an absolute basis and a relative basis in comparison to its peer funds utilizing Morningstar classifications, appropriate securities market benchmarks, the Advisor’s similarly
managed accounts, and a cohort that is comprised of similarly managed funds selected by an independent third-party consulting firm engaged by the Board to assist it in its 15(c) review (the “Cohort”). While the Board considered both
short-term and long-term performance, it placed greater emphasis on longer term performance. When reviewing performance against the comparative peer group universe, the Board took into account that the investment objectives and strategies of
each Fund, as well as its level of risk tolerance, may differ significantly from funds in the peer universe. When reviewing a Fund’s performance against broad market benchmarks, the Board took into account the differences in portfolio
construction between the Fund and such benchmarks as well as other differences between actively managed funds and passive benchmarks, such as objectives and risks. In assessing periods of relative underperformance or outperformance, the Board
took into account that relative performance can be significantly impacted by performance measurement periods and that some periods of underperformance may be transitory in nature while others may reflect more significant underlying issues.
|
|
|
Mid Cap Fund: The Board noted that the Fund outperformed the Morningstar peer group and Cohort average for the one-, three- and five-year periods ended
June 30, 2022. The Board also reviewed the performance of the Fund against a broad-based securities market benchmark, noting that it had outperformed its primary benchmark index over the one-, three- and five-year periods ended June 30, 2022.
|
70
Pzena Funds
Approval of Investment Advisory Agreement (Unaudited) (Continued)
|
The Board also considered the Fund’s performance compared to the Adviser’s similarly managed accounts, noting that the Fund outperformed the similarly managed composite for the one-year period
and underperformed for the three- and five-year periods ended June 30, 2022.
|
||
|
Emerging Markets Fund: The Board noted that the Fund outperformed the Morningstar peer group and Cohort average for the one-, three- and five-year periods
ended June 30, 2022. The Board also reviewed the performance of the Fund against two broad-based securities market benchmarks, noting that it had outperformed both its primary and secondary benchmark over the one-, three- and five-year
periods, all ended June 30, 2022.
|
||
|
The Board also considered the Fund’s performance compared to the Adviser’s similarly managed accounts, noting that the Fund outperformed the similarly managed account composite for the one-year
period and underperformed for the three- and five-year periods.
|
||
|
Small Cap Fund: The Board noted that the Fund outperformed each of the Morningstar peer group and Cohort average for the one-year period and
underperformed for the three- and five-year periods ended June 30, 2022. The Board also reviewed the performance of the Fund against a broad-based securities market benchmark, noting that it had outperformed its primary benchmark index over
the one- and three-year periods, and underperformed for the five-year period. All periods ended June 30, 2022.
|
||
|
The Adviser represented that it does not manage any other accounts with a similar strategy to that of the Small Cap Fund.
|
||
|
International Small-Cap Fund: The Board noted that the Fund outperformed the Morningstar peer group for the one-year period and underperformed for the
three-year period ended June 30, 2022. The Board noted that the Fund outperformed the Cohort average for the one- and three-year periods ended June 30, 2022. The Board also reviewed the performance of the Fund against two broad-based
securities market benchmarks, noting that it outperformed both its primary and secondary benchmark over the one- and three-year periods ended June 30, 2022.
|
||
|
The Board also considered the Fund’s performance compared to the Adviser’s similarly managed accounts, noting that the Fund underperformed the similarly managed account composite for the one-
and three-year periods.
|
||
|
International Fund: The Board noted that the Fund underperformed each of the Morningstar peer group and Cohort average for the one-year period ended June
30, 2022. The Board also reviewed the performance of the Fund against two broad-based securities market benchmarks, noting that it outperformed its primary benchmark over the one-year period, but underperformed the secondary benchmark during
the same period.
|
||
|
The Board also considered the Fund’s performance compared to the Adviser’s similarly managed accounts, noting that because it had not yet completed a full calendar year of operations, the
Adviser was not able to provide comparative information.
|
||
|
3.
|
THE COSTS OF THE SERVICES TO BE PROVIDED BY THE ADVISER AND THE STRUCTURE OF THE ADVISER’S FEE UNDER THE ADVISORY AGREEMENT. In considering the advisory fee and total fees and expenses of the
Funds, the Board reviewed comparisons to the peer funds and the Adviser’s similarly managed accounts for other types of clients, as well as all expense waivers and reimbursements. When reviewing fees charged to other similarly managed
accounts, the Board took into account the type of account and the differences in the management of that account that might be germane to the difference, if any, in the fees charged to such accounts.
|
|
|
Mid Cap Fund: The Board noted that the Adviser had contractually agreed to maintain an annual expense ratio for the Fund of 0.90%, excluding certain
operating expenses and class-level expenses (the “Expense Cap”). The Board noted that the Fund’s contractual management fee was below the Cohort’s average and slightly above the Cohort’s median. Additionally, the Board considered that the
Fund’s net expense ratio was above the Cohort average and median. The Board noted that the net expense ratio was below the Morningstar peer group average. The Board also took into consideration the services the Adviser provides to its
similarly managed account clients, comparing the fees charged for those management services to the management fees charged to the Fund. The Board found that the management fees charged to the Fund were lower than, equal to, or higher than the
fees charged to the Adviser’s similarly managed account clients depending on the asset level.
|
||
|
Emerging Markets Fund: The Board noted that the Adviser had contractually agreed to maintain an annual expense ratio for the Fund of 1.08%, excluding
certain operating expenses and class-level expenses (the “Expense Cap”). The Board noted that the contractual advisory fee was above the Cohort median and average. The Board noted that the Fund’s net expense
|
71
Pzena Funds
Approval of Investment Advisory Agreement (Unaudited) (Continued)
|
ratio was above the Cohort average and in line with the Cohort median. The Board also noted that the Fund’s net expense ratio was below the Morningstar peer group average. The Board also took
into consideration the services the Adviser provides to its similarly managed account clients, comparing the fees charged for those management services to the management fees charged to the Fund. The Board found that the management fees
charged to the Fund were equal to or higher than the fees charged to the Adviser’s similarly managed account clients depending on the asset level.
|
||
|
Small Cap Fund: The Board noted that the Adviser had contractually agreed to maintain annual expense ratios for the Fund of 1.00%, excluding certain
operating expenses and class-level expenses (the “Expense Cap”). The Board considered that compared to the Cohort contractual advisory fee and net expense ratio were above the median and average. The Board also noted that the Fund’s net
expense ratio was below the Morningstar peer group average. The Board also considered that the Adviser does not manage any other accounts with a similar strategy to that of the Small Cap Fund.
|
||
|
International Small-Cap Fund: The Board noted that the Adviser had contractually agreed to maintain an annual expense ratio for the Fund of 1.17%,
excluding certain operating expenses and class-level expenses (the “Expense Cap”). The Board noted that the Fund’s contractual management fee and net expense ratio were each above the Cohort average and median. The Board also noted that the
Fund’s net expense ratio was above the Morningstar peer group average. The Board took into consideration that after advisory fee waivers and the payment of Fund expenses necessary to maintain the Expense Caps, the Adviser received no advisory
fees for the year ended June 30, 2022. The Board found that the management fees charged to the Fund were equal to or higher than the fees charged to the Adviser’s similarly managed account clients depending on the asset level.
|
||
|
International Fund: The Board noted that the Adviser had contractually agreed to maintain an annual expense ratio for the Fund of 0.74%, excluding certain
operating expenses and class-level expenses (the “Expense Cap”). The Board noted that the Fund’s contractual management fee and net expense ratio were each below the Cohort median and average. The Board also noted that the Fund’s net expense
ratio was below the Morningstar peer group average The Board took into consideration that after advisory fee waivers and the payment of Fund expenses necessary to maintain the Expense Caps, the Adviser received no advisory fees for the year
ended June 30, 2022. The Board found that the management fees charged to the Fund were higher than the fees charged to the Adviser’s similarly managed account clients.
|
||
|
The Board determined that it would continue to monitor the appropriateness of the advisory fees for the Funds and concluded that, at this time, the fees to be paid to the Adviser were fair and
reasonable.
|
||
|
4.
|
ECONOMIES OF SCALE. The Board also considered whether economies of scale were being realized by the Adviser that should be shared with shareholders. The Board further noted that the Adviser has
contractually agreed to reduce its advisory fees or reimburse Fund expenses so that the Funds do not exceed the specified Expense Caps. The Board noted that for the Small Cap Fund, the Adviser had recently lowered the Expense Cap to 1.00%
from 1.10%. The Board noted that at current asset levels, it did not appear that there were additional significant economies of scale being realized by the Adviser that should be shared with shareholders and concluded that it would continue
to monitor economies of scale in the future as circumstances changed and assuming asset levels increase.
|
|
|
5.
|
THE PROFITS TO BE REALIZED BY THE ADVISER AND ITS AFFILIATES FROM THEIR RELATIONSHIP WITH THE FUNDS. The Board reviewed the Adviser’s financial information and took into account both the direct
benefits and the indirect benefits to the Adviser from advising the Funds. The Board considered the profitability to the Adviser from its relationship with the Funds and considered any additional material benefits derived by the Adviser from
its relationship with the Funds, such as Rule 12b-1 fees received from the Funds’ Investor Class shares. The Board also considered “soft dollar” benefits that may be received by the Adviser in exchange for Fund brokerage. After such review,
the Board determined that the profitability to the Adviser with respect to the Advisory Agreement was not excessive, and that the Adviser had maintained adequate profit levels to support the services it provides to the Funds.
|
No single factor was determinative of the Board’s decision to approve the continuance of the Advisory Agreement for the Funds, but rather the Trustees based their determination on
the total mix of information available to them. Based on a consideration of all the factors in their totality, the Trustees determined that the advisory arrangement with the Adviser, including the advisory fee, was fair and reasonable to the Funds.
The Board, including a majority of the Independent Trustees, therefore determined that the continuance of the Advisory Agreement for the Funds would be in the best interest of each Fund and its shareholders.
72
Pzena Funds
Notice to Shareholders
February 28, 2023 (Unaudited)
Federal Tax Distribution Information
For the year ended February 28, 2023, the Mid Cap Value Fund, Emerging Markets Value Fund, Small Cap Value Fund, International Small Cap Value Fund, and International Value Fund designated $1,738,933,
$16,166,313, $1,171,434, $554,897, and $779,200 as ordinary income, respectively, and $15,241,488, $2,437,456, $11,308,345, $150,406, and $0 as long-term capital gains, respectively, for purposes of the dividends paid deduction.
Certain dividend paid by the Funds may be subject to a maximum tax rate of 23.8%, as provided for by the Tax Cuts and Jobs Act of 2017. For the fiscal year ended February 28, 2023, the percentage of
dividends declared from ordinary income designated as qualified dividend income was as follows:
|
Mid Cap Value Fund
|
99.08%
|
|
|
Emerging Markets Value Fund
|
48.81%
|
|
|
Small Cap Value Fund
|
91.39%
|
|
|
International Small Cap Value Fund
|
79.14%
|
|
|
International Value Fund
|
100.00%
|
For corporate shareholders in the Funds, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended February 28, 2023, was as
follows:
|
Mid Cap Value Fund
|
98.96%
|
|
|
Emerging Markets Value Fund
|
1.57%
|
|
|
Small Cap Value Fund
|
90.82%
|
|
|
International Small Cap Value Fund
|
0.00%
|
|
|
International Value Fund
|
0.00%
|
For the year ended February 28, 2023, the following Funds designated the following amounts as foreign taxes paid pursuant to section 853 of the Internal Revenue Service Code:
|
Creditable
|
Shares
|
|||||||||||
|
Foreign Tax
|
Outstanding at
|
Per Share
|
||||||||||
|
Credit Paid
|
2/28/2023
|
Amount
|
||||||||||
|
Emerging Markets Value Fund
|
$
|
3,146,240
|
95,213,654
|
$
|
0.033044
|
|||||||
|
International Small Cap Value Fund
|
48,078
|
1,693,144
|
0.028396
|
|||||||||
|
International Value Fund
|
138,530
|
4,575,432
|
0.030277
|
|||||||||
How to Obtain a Copy of the Funds’ Proxy Voting Policies
A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available without charge, upon request, by calling 1-844-PZN-1996
(1-844-796-1996) or on the U.S. Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.
How to Obtain a Copy of the Funds’ Proxy Voting Records for the 12-Month Period Ended June 30
Information regarding how a Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling 1-844-PZN-1996
(1-844-796-1996). Furthermore, you can obtain a Fund’s proxy voting records on the SEC’s website at http://www.sec.gov.
Quarterly Filings on Form N-PORT
The Funds file their complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Part F of Form N-PORT. The Funds’ Form N-PORT is available on the SEC
website at http://www.sec.gov. Information included in the Funds’ Form N-PORT is also available by calling 1-844-PZN-1996 (1-844-796-1996).
Householding
In an effort to decrease costs, the Funds will reduce the number of duplicate prospectuses, supplements, and certain other shareholder documents that you receive by sending only one copy of each to
those addresses shown by two or more accounts. Please call the Funds’ transfer agent toll free at 1-844-PZN-1996 (1-844-796-1996) to request individual copies of these documents. The Funds will begin sending individual copies 30 days after receiving
your request. This policy does not apply to account statements.
73
Pzena Funds
Statement Regarding Liquidity Risk Management Program (Unaudited)
Each Fund has adopted a liquidity risk management program (the “program”). The Board has designated a committee at the Adviser to serve as the administrator of the program. The Adviser’s committee
conducts the day-to-day operation of the programs pursuant to policies and procedures administered by the committee.
Under the program, the Adviser’s committee manages each Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining
shareholders’ interests in the Fund. This risk is managed by monitoring the degree of liquidity of each Fund’s investments, limiting the amount of each Fund’s illiquid investments, and utilizing various risk management tools and facilities available
to each Fund for meeting shareholder redemptions, among other means. The committee’s process of determining the degree of liquidity of each Fund’s investments is supported by one or more third-party liquidity assessment vendors.
The Board reviewed a report prepared by the committee regarding the operation and effectiveness of the program for the period July 1, 2021 through June 30, 2022. No significant liquidity events
impacting the Funds were noted in the report. In addition, the committee provided its assessment that the program had been effective in managing each Fund’s liquidity risk.
74
Pzena Funds
Privacy Notice
The Funds collect non-public information about you from the following sources:
• Information we receive about you on applications or other forms;
• Information you give us orally; and/or
• Information about your transactions with us or others.
We do not disclose any non-public personal information about our customers or former customers without the customer’s authorization, except as permitted by law or in response to inquiries from
governmental authorities. We may share information with affiliated and unaffiliated third parties with whom we have contracts for servicing the Funds. We will provide unaffiliated third parties with only the information necessary to carry out their
assigned responsibilities. We maintain physical, electronic and procedural safeguards to guard your non-public personal information and require third parties to treat your personal information with the same high degree of confidentiality.
In the event that you hold shares of the Funds through a financial intermediary, including, but not limited to, a broker-dealer, bank, or trust company, the privacy policy of your financial intermediary
would govern how your non-public personal information would be shared by those entities with unaffiliated third parties.
75
(This Page Intentionally Left Blank.)
Investment Adviser
Pzena Investment Management, LLC
320 Park Avenue, 8th Floor
New York, New York 10022
Independent Registered Public Accounting Firm
Tait, Weller & Baker LLP
Two Liberty Place
50 South 16th Street, Suite 2900
Philadelphia, Pennsylvania 19102
Legal Counsel
Sullivan & Worcester LLP
1633 Broadway, 32nd Floor
New York, New York 10019
Custodian
U.S. Bank N.A.
1555 North RiverCenter Drive, Suite 302
Milwaukee, Wisconsin 53212
Transfer Agent, Fund Accountant and Fund Administrator
U.S. Bank Global Fund Services
615 East Michigan Street
Milwaukee, Wisconsin 53202
Distributor
Quasar Distributors, LLC
111 East Kilbourn Avenue, Suite 2200
Milwaukee, Wisconsin 53202
This report is intended for the shareholders of the Funds and may not be used as sales literature unless preceded or accompanied by a current prospectus, To obtain a free prospectus, please call
1-844-PZN-1996 (1-844-796-1996).
ZP-ANNUAL
(b) Not Applicable.
Item 2. Code of Ethics.
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer and principal financial officer. The registrant has not made any substantive amendments to its code of ethics during the period covered by
this report. The registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report.
A copy of the registrant’s Code of Ethics is filed herewith.
Item 3. Audit Committee Financial Expert.
The registrant’s Board of Trustees has determined that there is at least one audit committee financial expert serving on its audit committee. Mr. Joe D. Redwine and Ms. Michele Rackey are the “audit committee financial experts” and are
considered to be “independent” as each term is defined in Item 3 of Form N‑CSR.
Item 4. Principal Accountant Fees and Services.
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. “Audit services” refer to performing an audit of the registrant's annual
financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. “Audit-related services” refer to the assurance and related services by the
principal accountant that are reasonably related to the performance of the audit. “Tax services” refer to professional services rendered by the principal accountant including the review of federal income tax returns, review of federal excise tax
returns, review of state tax returns, if any, and assistance with calculation of required income, capital gain and excise distributions. There were no “other services” provided by the principal accountant. The following table details the
aggregate fees billed or expected to be billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
|
FYE 2/28/2023
|
FYE 2/28/2022
|
|
|
(a) Audit Fees
|
$94,500
|
$88,600
|
|
(b) Audit-Related Fees
|
N/A
|
N/A
|
|
(c) Tax Fees
|
$18,000
|
18,000
|
|
(d) All Other Fees
|
N/A
|
N/A
|
(e)(1) The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre‑approve all audit and non‑audit services of the registrant, including services provided to any entity affiliated with the
registrant.
(e)(2) The percentage of fees billed by Tait, Weller & Baker LLP applicable to non-audit services pursuant to waiver of pre-approval requirement were as follows:
|
FYE 2/28/2023
|
FYE 2/28/2022
|
|
|
Audit-Related Fees
|
0%
|
0%
|
|
Tax Fees
|
0%
|
0%
|
|
All Other Fees
|
0%
|
0%
|
(f) All of the principal accountant’s hours spent on auditing the registrant’s financial statements were attributed to work performed by full‑time permanent employees of the principal accountant.
(g) The following table indicates the non-audit fees billed or expected to be billed by the registrant’s accountant for services to the registrant and to the registrant’s investment adviser (and any other
controlling entity, etc.—not sub-adviser) for the last two years.
|
Non-Audit Related Fees
|
FYE 2/28/2023
|
FYE 2/28/2022
|
|
Registrant
|
N/A
|
N/A
|
|
Registrant’s Investment Adviser
|
N/A
|
N/A
|
(h) The audit committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has
concluded that the provision of such non-audit services by the accountant has not compromised the accountant’s independence.
The registrant has not been identified by the U.S. Securities and Exchange Commission as having filed an annual report issued by a registered public accounting firm branch or office that is located in a foreign
jurisdiction where the Public Company Accounting Oversight Board is unable to inspect or completely investigate because of a position taken by an authority in that jurisdiction.
The registrant is not a foreign issuer.
Item 5. Audit Committee of Listed Registrants.
(a) Not applicable to registrants who are not listed issuers (as defined in Rule 10A-3 under the Securities Exchange Act of 1934).
(b) Not applicable.
Item 6. Investments.
|
(a)
|
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
|
|
(b)
|
Not applicable.
|
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 9. Purchases of Equity Securities by Closed‑End Management Investment Company and Affiliated Purchasers.
Not applicable to open-end investment companies.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11. Controls and Procedures.
|
(a)
|
The Registrant’s President/Chief Executive Officer/Principal Executive Officer and Vice President/Treasurer/Principal Financial Officer have reviewed the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940, as amended, (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d‑15(b) under the Securities Exchange Act of
1934. Based on their review, such officers have concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and
reported and made known to them by others within the Registrant and by the Registrant’s service provider.
|
|
(b)
|
There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that has materially affected, or is reasonably
likely to materially affect, the Registrant's internal control over financial reporting.
|
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable to open-end investment companies.
Item 13. Exhibits.
(3) Any written solicitation to purchase securities under Rule 23c‑1 under the Act sent or given during the period covered by the report by or on behalf of the registrant to 10 or
more persons. Not applicable to open-end investment companies.
(4) Change in the registrant’s independent public accountant. There was no change in the registrant’s independent public accountant for the period covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
(Registrant) Advisors Series Trust
By (Signature and Title) /s/Jeffrey T. Rauman
Jeffrey T. Rauman, President/Chief Executive Officer/Principal
Executive Officer
Date 5/3/23
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, as amended, this report has been signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By (Signature and Title) /s/Jeffrey T. Rauman
Jeffrey T. Rauman, President/Chief Executive Officer/Principal
Executive Officer
Date 5/3/23
By (Signature and Title) /s/Kevin J. Hayden
Kevin J. Hayden, Vice President/Treasurer/Principal Financial
Officer
Date 5/3/23