Driehaus Micro Cap Growth Fund

  • Overview
  • Performance
  • Characteristics
  • Risks
  • Portfolio Managers
  • Literature

Investment Strategy

The Micro Cap Growth Fund generally invests in companies that are within the same market capitalization range at the time of investment as those included in the Russell Microcap® Growth Index.

 

Fund Facts

Inception Date: 11/18/2013*
Ticker: DMCRX
Cusip: 262028798
Assets Under Management as of 6/30/2014: $104 Million
Open to New Investors: Yes
Minimum Initial Investment: $10,000
Minimum Subsequent Investment: $2,000
Minimum IRA Investment: $2,000
Minimum Subsequent IRA Investment: $500
Distributions: Dividends and capital gains are distributed annually in December
Investment Vehicles: Mutual Fund
Separately Managed Account




Growth of $10,000 Since Performance Inception (1/1/2003)**

as of 6/30/2014:

 


Sources: Driehaus Capital Management LLC, Russell Investments, Lipper Investment Management

Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (800) 560-6111.  Please read the prospectus and summary prospectus carefully before investing.

Performance Disclosure
The performance data shown above represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Principal value and investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. The Fund will charge a redemption fee of 2.00% on shares held less than 60 days.

Performance data represents the rate that an investor would have earned (or lost) on an investment in the Funds (assuming reinvestment of all dividends and distributions). Average annual total return reflects annualized change.

Since Fund performance is subject to change after the month-end, please call (800) 560-6111 or view our daily NAVs for more current performance information.

*The Fund's predecessor limited partnership has a performance inception date of 1/1/2003.

**The Growth of $10,000 performance of the Driehaus Micro Cap Growth Fund includes the performance of one of the Fund's predecessor limited partnerships, which is calculated from January 1, 2003, before the Fund commenced operations and succeeded to the assets of its predecessors on November 18, 2013. The Fund's predecessors are the Driehaus Micro Cap Fund, L.P. (1996 inception) and the Driehaus Institutional Micro Cap Fund, L.P. (2011 inception). The performance of the Driehaus Micro Cap Fund, L.P., which was selected because it has the longer track record of the two predecessor partnerships, has been restated to reflect estimated expenses of the Fund. The predecessor limited partnerships were not registered under the Investment Company Act of 1940, as amended ("1940 Act") and thus were not subject to certain investment and operational restrictions that are imposed by the 1940 Act. If the predecessors had been registered under the 1940 Act, their performance may have been adversely affected. After-tax performance returns are not included for the Driehaus Micro Cap Fund, L.P. The predecessors were not regulated investment companies and therefore did not distribute current or accumulated earnings.

1The Russell Microcap® Growth Index is constructed to provide a comprehensive and unbiased barometer of the microcap growth market. Based on ongoing empirical research of investment manager behavior, the methodology used to determine growth probability approximates the aggregate microcap growth manager’s opportunity set. The index has an inception date of July 2000.

Driehaus Securities LLC, Distributor

 

 

Performance Disclosure
The performance data shown below represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Principal value and investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. The Fund will charge a redemption fee of 2.00% on shares held less than 60 days.

Performance data represents the rate that an investor would have earned (or lost) on an investment in the Funds (assuming reinvestment of all dividends and distributions). Average annual total return reflects annualized change.

Since Fund performance is subject to change after the month-end, please call (800) 560-6111 or view our daily NAVs for more current performance information.

Month-End Performance as of 6/30/2014

Fund/Index MTD YTD 1 Year 3 Year 5 Year 10 Year Since
Inception*
Driehaus Micro Cap Growth Fund1 7.40% -1.30% 23.58% 15.49% 20.47% 12.29% 18.39%
Russell Microcap® Growth Index2 6.49% 1.17% 26.70% 15.42% 19.93% 6.73% 10.93%



Calendar Quarter-End Performance as of 6/30/2014

Fund/Index QTR YTD 1 Year 3 Year 5 Year 10 Year Since
Inception*
Driehaus Micro Cap Growth Fund1 -7.18% -1.30% 23.58% 15.49% 20.47% 12.29% 18.39%
Russell Microcap® Growth Index2 -3.47% 1.17% 26.70% 15.42% 19.93% 6.73% 10.93%



Annual Fund Operating Expenses3

 
Management Fee 1.25%
Other Expenses 0.24%
Total Annual Fund Operating Expenses 1.49%

 


Sources: Driehaus Capital Management LLC, Russell Investments, SS&C Inc.

Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contains this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (800) 560-6111.  Please read the prospectus and summary prospectus carefully before investing.

Average Annual Total Return

* "Since Inception" is calculated to include performance from the Fund's predecessor limited partnership (Performance Inception Date: 1/1/2003)

1The average annual total returns of the Driehaus Micro Cap Growth Fund include the performance of one of the Fund's predecessor limited partnerships, which is calculated from January 1, 2003, before the Fund commenced operations and succeeded to the assets of its predecessors on November 18, 2013. The Fund's predecessors are the Driehaus Micro Cap Fund, L.P. (1996 inception) and the Driehaus Institutional Micro Cap Fund, L.P. (2011 inception). The performance of the Driehaus Micro Cap Fund, L.P., which was selected because it has the longer track record of the two predecessor partnerships, has been restated to reflect estimated expenses of the Fund. The predecessor limited partnerships were not registered under the Investment Company Act of 1940, as amended ("1940 Act") and thus were not subject to certain investment and operational restrictions that are imposed by the 1940 Act. If the predecessors had been registered under the 1940 Act, their performance may have been adversely affected. After-tax performance returns are not included for the Driehaus Micro Cap Fund, L.P. The predecessors were not regulated investment companies and therefore did not distribute current or accumulated earnings.

2The Russell Microcap® Growth Index is constructed to provide a comprehensive and unbiased barometer of the microcap growth market. Based on ongoing empirical research of investment manager behavior, the methodology used to determine growth probability approximates the aggregate microcap growth manager’s opportunity set. The index has an inception date of July 2000.

3Represents the estimated Annual Fund Operating Expenses as disclosed in the current prospectus dated April 30, 2014. It is important to understand that a decline in the Fund's average net assets due to unprecedented market volatility or other factors could cause the Fund's expense ratio for the current fiscal year to be higher than the expense information presented. "Other Expenses" are estimated for the current fiscal year.

Driehaus Securities LLC, Distributor

 

 

Portfolio Characteristics

as of 6/30/2014 | updated quarterly
  Fund Benchmark
Number of Holdings 123 948
Weighted Avg. Market Cap (M) $737 $480
Median Market Cap (M) $589 $225
Active Share (3-year avg.)* 84.2 n/a
Market Cap Breakout
< $1 billion 72.6% 98.7%
> $1 billion 27.4% 1.3%
Risk-adjusted and Risk Characteristics (5-year period)
Annualized Alpha -1.91 n/a
Sharpe Ratio 0.82 0.98
Information Ratio 0.06 n/a
Beta 1.17 1.00
Standard Deviation 24.78 20.20
Tracking Error 8.32 0.00
R Squared 0.91 1.00

 

Sector Weightings

as of 6/30/2014 | updated quarterly
  Fund Benchmark
Consumer Discretionary 18.4% 11.9%
Consumer Staples 3.5% 3.0%
Energy 8.8% 5.4%
Financials 1.0% 5.0%
Health Care 30.5% 37.4%
Industrials 13.1% 11.1%
Information Technology 18.5% 18.7%
Materials 1.2% 4.2%
Telecommunication Services 3.3% 3.0%
Utilities 0.0% 0.5%
Cash 1.7% 0.0%

 

Top 5 Holdings**

as of 5/31/2014 | updated monthly
1. Interactive Intelligence Group, Inc. 2.1%
2. Callon Petroleum Company 2.0%
3. inContact, Inc. 1.8%
4. Gentherm Inc. 1.8%
5. Rentrak Corporation 1.7%

 


Sources: Driehaus Capital Management LLC, Factset Research Systems, Inc., eVestment Alliance
Benchmark: Russell Microcap® Growth Index
*Data is calculated monthly.
**Holdings subject to change.

Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contains this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (800) 560-6111.  Please read the prospectus and summary prospectus carefully before investing.

TERMS: Active share represents the share of portfolio holdings that differ from the benchmark index holdings. Average drawdown is the arithmetic average of declines in value during a given period of time. Downside risk is a measure of the average deviations of a negative return series. A large downside risk implies that there have been large swings or volatility in the manager’s return series. Beta is a measure of a portfolio’s volatility. A beta of 1.00 implies perfect historical correlation of movement with the market. A higher beta manager will rise and fall more rapidly than the market, whereas a lower beta manager will rise and fall slower. Standard deviation is a measure of the average deviations of a return series from its mean; often used as a measure of portfolio volatility. A large standard deviation implies that there have been large swings or volatility in the manager’s return series. Tracking error measures of the amount of active risk that is being taken by a manager. Tracking error accounts for the deviation away from the benchmark and does not indicate in which direction it occurred, either positive or negative. Alpha is the measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund’s alpha. Sharpe ratio is calculated by finding the portfolio’s excess return and then dividing by the portfolio’s standard deviation. Information Ratio (IR) measures a portfolio manager’s ability to generate excess returns relative to a benchmark, but also attempts to identify the consistency of the investor. This ratio will identify if a manager has beaten the benchmark by a lot in a few months or a little every month. The higher the IR the more consistent a manager is and consistency is an ideal trait. R-Squared is a statistical measure that represents the percentage of a fund or security’s movements that can be explained by movements in a benchmark index. For fixed-income securities, the benchmark is the T-bill. For equities, the benchmark is the S&P 500.

Driehaus Securities LLC, Distributor

 

Principal Risks

Market Risk
The Fund is subject to market risk, which is the possibility that stock prices overall will decline over short or even long periods. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. These fluctuations are expected to have a substantial influence on the value of the Fund's shares.

Growth Stock Risk
Growth stocks are typically priced higher than other stocks, in relation to earnings and other measures, because investors believe they have more growth potential. This potential may or may not be realized and, if it is not realized, may result in a loss to the Fund. Growth stock prices also tend to be more volatile than the overall market.

Micro-Cap Company Risk
The securities of micro-cap companies may be more volatile in price, have wider spreads between their bid and ask prices, and have significantly lower trading volumes than the securities of larger capitalization companies. As a result, the purchase or sale of more than a limited number of shares of the securities of a smaller company may affect its market price. The Fund may need a considerable amount of time to purchase or sell its positions in these securities. Some U.S. micro-cap companies are followed by few, if any, securities analysts, and there tends to be less publicly available information about such companies. Their securities generally have even more limited trading volumes and are subject to even more abrupt or erratic market price movements than are small-cap and mid-cap securities, and the Fund may be able to deal with only a few market-makers when purchasing and selling micro-cap securities. Such companies also may have limited markets, financial resources or product lines, may lack management depth, and may be more vulnerable to adverse business or market developments. These conditions, which create greater opportunities to find securities trading well below the investment adviser's estimate of the company's current worth, also involve increased risk.

Nondiversification
Because the Fund may invest a greater percentage of assets in a particular issuer or a small number of issuers, it may be subject to greater risks and larger losses than diversified funds. The value of the Fund may vary more as a result of changes in the financial condition or the market's assessment of the issuers than a more diversified fund.

Allocation Risk
The Fund's overall risk level will depend on the market sectors in which the Fund is invested. Because the Fund may have significant weightings in a particular company, industry or market sector, the value of Fund shares may be affected by events that adversely affect that company, industry or market sector and may fluctuate more than that of a less focused fund.

High Rates of Turnover
It is anticipated that the Fund will experience high rates of portfolio turnover, which may result in payment by the Fund of above-average transaction costs and could result in the payment by shareholders of taxes on above-average amounts of realized investment gains, including net short-term capital gains, which are taxed as ordinary income for federal income tax purposes.

Manager Risk
How the Fund's investment adviser manages the Fund will impact the Fund's performance. The Fund may lose money if the investment adviser's investment strategy does not achieve the Fund's objective or the investment adviser does not implement the strategy successfully.

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Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contains this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (800) 560-6111.  Please read the prospectus and summary prospectus carefully before investing.

Driehaus Securities LLC, Distributor




Photo of Jeff James

Jeffrey James

Portfolio Manager

Jeffrey James is the portfolio manager for the Micro Cap Growth and Small Cap Growth strategies. In his role as portfolio manager he is responsible for the strategies' portfolio construction and buy/sell decisions. Additionally, he is responsible for implementation of the investment philosophy, idea generation as well as the evaluation of macro-level trends and the market environment.

Mr. James began his career with Lehman Brothers in 1990. From 1991 to 1997, he worked at the Federal Reserve Bank of Chicago as an analyst and joined Driehaus Capital Management in 1997 as a sector analyst covering the information technology and energy sectors for the firm's Small Cap Growth and Mid Cap Growth strategies. In 1998, he began managing the Driehaus Micro Cap Growth strategy. From 2001 to 2005, he also served as portfolio manager for the firm's Long/Short Hedge fund. He was named portfolio manager of the Driehaus Small Cap Growth strategy in 2006. Mr. James received his B.S. in finance from Indiana University in 1990 and his MBA from DePaul University in 1995.


Photo of Michael Buck

Michael Buck

Assistant Portfolio Manager

Michael Buck is the assistant portfolio manager for the Micro Cap Growth and Small Cap Growth strategies. In his role as assistant portfolio manager he is responsible for providing depth of leadership to the research team and identifying appropriate investment ideas relevant to the strategies. Additionally, Mr. Buck acts as a senior analyst focusing on U.S. micro and small cap stocks within the consumer discretionary, consumer staples and financials sectors.

Mr. Buck began his career at Deloitte Consulting, LLC as a business analyst until he joined Driehaus Capital Management in 2002. He received his B.A. and B.M. in economics and cello performance from Northwestern University in 2000.

 

 


Driehaus Securities LLC, Distributor


Fund Literature

Fund Fact Sheet
June 30, 2014
Fund Commentary with Attribution
June 30, 2014
Portfolio Holdings
May 31, 2014
Prospectus
April 30, 2014
Summary Prospectus
April 30, 2014
Statement of Additional Information
April 30, 2014
Annual Shareholder Report
December 31, 2013
  XBRL File*
April 30, 2014

 

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Driehaus Securities LLC, Distributor