Brandes - U.S. - Mutual Brandes International Small Cap Equity Fund Content

Brandes International Small Cap Equity Fund

The Fund seeks long-term capital appreciation by investing in equity securities of non-U.S. issuers the Fund’s investment team believes are undervalued relative to their financial strength and upside potential.

Small Companies. Big Potential

  • Pioneer — Brandes has been navigating global markets for over 40 years and managing a standalone International Small Cap Fund for over 20 years.
  • Value — The fund consistently applies a disciplined investment process focused on uncovering international small cap companies with potentially attractive value attributes.
  • Flexibility — The fund has the ability and willingness to be different than the benchmark, with the freedom to invest wherever we can find the most value, including emerging markets.

Partner with a Pioneer in Global Value Investing

  • Experienced Professionals — The Investment Committee is composed of experienced professionals who have managed extreme market cycles.
  • Commitment to Transparent, Easy to Understand Investment Process — The firm consistently applies a Graham-and-Dodd, value investing approach centered on a research-driven process of purchasing potentially undervalued companies with the goal of capturing future price appreciation.
  • Independent Point of View — Brandes Investment Partners is a 100% employee owned firm and its strategies are unhindered by sales quotas or any outside influence that may impede the firm’s pursuit of investment management excellence.

Under normal market conditions, the International Small Cap Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) measured at the time of purchase in equity securities issued by small capitalization companies located in at least three countries outside of the United States. The Fund considers a company to be a small capitalization company if it has a market capitalization (market value of publicly traded securities) of $5 billion or less at the time of purchase. Equity securities include common and preferred stocks, warrants and rights. An issuer is determined to be located outside the United States on the basis of the issuer’s domicile, principal place of business, primary stock exchange listing, source of revenue or other factors. Up to 30% of the International Small Cap Fund’s total assets, measured at the time of purchase, may be invested in securities of companies located in countries considered to have emerging securities markets. With respect to 20% of the Fund’s net assets, the Fund may invest in stocks of companies of any capitalization size.

Brandes Investment Partners, L.P., the investment advisor (the “Advisor”), uses the principles of value investing to analyze and select equity securities for the International Small Cap Fund’s investment portfolio. When buying equity securities, the Advisor assesses the estimated “intrinsic” value of a company based on data such as a company’s earnings, cash flow generation, and/or asset value of the underlying business. By choosing securities that are selling at a discount to the Advisor’s estimates of their share of the company’s intrinsic business value, the Advisor seeks to establish an opportunity for long-term capital appreciation. The Advisor may sell a security when its price reaches a target set by the Advisor, the Advisor believes that other investments are more attractive, or for other reasons.

Shareholder Fees
(fees paid directly from your investment)
   Class A    Class C    Class I    Class R6
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price) -0 5.75% -0 None -0 None -0 None
Maximum Deferred Sales Charge (Load) -0 None* -0 1.00%# -0 None -0 None
Please click here for sales load break points.

*Investments of $1 million or more are not subject to a front-end sales charge but generally will be subject to a deferred sales charge of 1.00% on amounts of less than $4 million, 0.50% on amounts of at least $4 million but less than $10 million and 0.25% on amounts of at least $10 million, if redeemed within one year from the date of purchase.

#A charge of 1.00% will be imposed on Class C shares redeemed within one year of purchase by any investor.
Annual Fund Operating Expenses 1
(expenses that you pay each year as a percentage of the value of your investment)
   Class A    Class C    Class I    Class R6
Management Fees -0 0.95% -0 0.95% -0 0.95% -0 0.95%
Distribution (rule 12b-1) Fees -0 0.25% -0 0.75% -0 None -0 None
Other Expenses        
Shareholder Service Fees -0 None -0 0.25% -0 None -0 None
Other Expenses -0 0.09% -0 0.09% -0 0.14% -0 0.09%
Total Other Expenses -0 0.09% -0 0.34% -0 0.14% -0 0.09%
         
Total Annual Fund Operating Expenses -0 1.29% -0 2.04% -0 1.09% -0 1.04%
Less Fee Waiver/Expense Reimbursement -0 0.00% -0 0.00% -0 0.00% 0 -0.04%
Net Annual Fund Operating Expenses -0 1.29% -0 2.04% -0 1.09% -0 1.00%
1The Advisor has contractually agreed to limit the International Small Cap Fund’s Class A, Class C, Class I and Class R6 annual operating expenses (excluding acquired fund fees and expenses, taxes, interest, brokerage commissions, expenses incurred in connection with any merger or reorganization or extraordinary expenses such as litigation), including repayment of previous waivers, to 1.40% for Class A, 2.15% for Class C, 1.15% for Class I and 1.00% for Class R6 as percentages of the respective Fund classes’ average daily net assets through January 31, 2019 (the “Expense Caps”). The Expense Caps may be terminated at any time by the Board of Trustees upon 60 days’ notice to the Advisor. The Advisor is permitted, with Board approval, to be reimbursed for fee reductions and/or expense payments made in the prior three years with respect to any Class of the Fund. The Advisor may request reimbursement if the aggregate amount paid by the Fund toward operating expenses for the Class for the fiscal year (taking into account the reimbursement) does not exceed the Expense Cap with respect to such Class or any lower expense cap for the Class in effect at the time of the reimbursement.

Because the values of the Fund's investments will fluctuate with market conditions, so will the value of your investment in the Fund. You could lose money on your investment in the Fund, or the Fund could underperform other investments. The values of the Fund’s investments fluctuate in response to the activities of individual companies and general stock market and economic conditions. In addition, the performance of foreign securities depends on the political and economic environments and other overall economic conditions in the countries where the Fund invests. Emerging country markets involve greater risk and volatility than more developed markets. Some emerging markets countries may have fixed or managed currencies that are not free-floating against the U.S. dollar. Certain of these currencies have experienced, and may experience in the future, substantial fluctuations or a steady devaluation relative to the U.S. dollar. Investments in small and medium capitalization companies tend to have limited liquidity and greater price volatility than large capitalization companies.

1 Source: FactSet as of 3/31/2018.

Source: Brandes Investment Partners via Morningstar as of 3/31/2018 

3 Sources: Worldscope via FactSet, The Brandes Institute, as of 6/30/2016. Using data from 1980 to 2016, the study showed that over the long term, a value premium was evident across regions. The non-U.S. sample consisted of publicly traded companies domiciled in 22 developed markets outside the United States (excluding the smallest 50% of companies). We grouped the largest 30% of the companies in our sample in a large-cap segment and assigned the remaining 70% to a small-cap segment. Stocks were first divided into 10 deciles based on price-to-book. Aggregate performance of each decile was tracked over the next five years. This process was then repeated each year. Within the non-U.S. small-cap segment, decile 10 value stocks outperformed decile 1 glamour stocks by an average annualized rolling five-year return of 7.85%.  Past performance is not a guarantee of future results.

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