N-CSR 1 pf-ncsra.htm PZENA FUNDS ANNUAL REPORT 2-28-23
UNITED STATES
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)



615 East Michigan Street
Milwaukee, WI 53202
(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)



(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


Letter to Shareholders
 
1
     
Pzena Funds Commentary
   
Pzena Mid Cap Value Fund
 
2
Pzena Emerging Markets Value Fund
 
5
Pzena Small Cap Value Fund
 
8
Pzena International Small Cap Value Fund
 
11
Pzena International Value Fund
 
14
     
Pzena Mid Cap Value Fund
   
Portfolio Allocation
 
17
Schedule of Investments
 
18
     
Pzena Emerging Markets Value Fund
   
Portfolio Allocation
 
19
Schedule of Investments
 
20
Portfolio Diversification
 
22
     
Pzena Small Cap Value Fund
   
Portfolio Allocation
 
23
Schedule of Investments
 
24
     
Pzena International Small Cap Value Fund
   
Portfolio Allocation
 
26
Schedule of Investments
 
27
Portfolio Diversification
 
29
     
Pzena International Value Fund
   
Portfolio Allocation
 
30
Schedule of Investments
 
31
Portfolio Diversification
 
33
     
Statements of Assets and Liabilities
 
34
     
Statements of Operations
 
36
     
Statements of Changes in Net Assets
   
Pzena Mid Cap Value Fund
 
38
Pzena Emerging Markets Value Fund
 
39
Pzena Small Cap Value Fund
 
40
Pzena International Small Cap Value Fund
 
41
Pzena International Value Fund
 
42
     
Financial Highlights
   
Pzena Mid Cap Value Fund
 
43
Pzena Emerging Markets Value Fund
 
45
Pzena Small Cap Value Fund
 
47
Pzena International Small Cap Value Fund
 
49
Pzena International Value Fund
 
51
     
Notes to Financial Statements
 
53
     
Report of Independent Registered Public Accounting Firm
 
64
     
Expense Example
 
65
     
Information about Trustees and Officers
 
67
     
Approval of Investment Advisory Agreement
 
70
     
Notice to Shareholders
 
73
     
Liquidity Risk Management Program
 
74
     
Privacy Notice
 
75





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.
 
           
Since
 
Three
Six
One
Three
Five
Inception
 
Months(1)
Months(1)
Year(1)
Years
Years
(3/31/2014)
Pzena Mid Cap Value Fund – Investor Class (PZVMX)
 4.29%
13.59%
 1.96%
19.25%
8.05%
8.63%
Pzena Mid Cap Value Fund – Institutional Class (PZIMX)
 4.34%
13.81%
 2.37%
19.72%
8.45%
8.99%
Russell Midcap® Value Index
-0.70%
  4.34%
-3.42%
11.96%
7.27%
7.79%

(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).
 
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.
 
*
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.


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 –
           
  Institutional Class (PZIEX)
 2.72%
 5.31%
  -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