CHICAGO, IL -- (Marketwire) -- 04/13/10 -- Appleseed Fund (NASDAQ: APPLX), a mutual fund that seeks to generate market-beating returns by investing in sustainable, undervalued companies, reported it was ranked by Morningstar as the #1 returning U.S. midcap value fund among 310 funds for the three years ended March 31, 2010, and the #1 returning socially responsible (SRI) domestic equity fund among 136 funds for the same period. Following the Fund's three-year anniversary, Appleseed received from Morningstar, Inc. a five-star rating out of 331 funds in the mid-cap value category for the three-year period ending February 28th, 2010.
"We were pleased with Morningstar's five-star rating," said Adam Strauss, one of Appleseed's portfolio managers. "We believe our approach to generating long-term value for our shareholders has withstood a significant test during the volatile and uncertain markets of the past several years."
For the three years ended March 31, 2010, Appleseed Fund generated an annualized total return of 8.1%, compared with the (-4.2%) annualized total return of the S&P 500, the Fund's benchmark index. Since its inception on December 8, 2006, Appleseed Fund has outperformed the S&P 500 Index by 12.4% per year, generating a total return of 9.1% annually compared with the S&P 500 Index's annualized return of (-3.3%). In a recent note, Morningstar's Michael Breen described some of the reasons behind the Fund's strong performance, "Discipline and strong stock-picking have keyed this success. The managers use a bottom-up approach that focuses on the usual good things, such as robust cash flows and clean balance sheets."
During the first three months of 2010, the Fund's managers continued to pursue a conservative approach to investing. Although price gains among low quality stocks were a driving force in the market's continued rally in 2010, the Fund's managers continued to pursue their high quality stock selection strategy. Strauss said: "Our goal is to invest in high quality, sustainable companies we can purchase at steeply discounted prices. Currently, we believe we are in a momentum-driven market, which rarely ends well for those investors who chase momentum in search of short-term gains."
During the first quarter, the Fund maintained its holdings in healthcare, a sector that comprises the largest sector of Appleseed's portfolio, at approximately 28.6%. The Fund's healthcare investments include pharmaceutical companies Novartis (NVS), Pfizer (PFE), PDI Inc. (PDII), and the Female Health Company (FHCO). "We have been accumulating a number of undervalued health-related stocks during the recent healthcare reform deliberations. These investments should have significant upside potential now that healthcare reform has passed."
Strauss continued: "In the midst of the current rally, we are still finding opportunities where companies are not being accurately valued by the market, in our opinion. In addition to our U.S. holdings, we are finding value among specific international equities, such as Willis Group, an Ireland-based provider of insurance brokerage services."
About The Appleseed Fund
Appleseed Fund is a mutual fund that seeks to generate market-beating returns by investing in sustainable, undervalued companies. Since the fund's inception in 2006, returns have outpaced the S&P 500 Index by nearly 14% per year. The Fund is managed by Pekin Singer Strauss, a Chicago-based value-oriented investment firm established in 1990. Appleseed Fund's portfolio managers are also Appleseed Fund shareholders.
Through 3/31/2010, the Appleseed Fund generated a one-year return of 60.0% and an annualized return of 8.7% since the Fund's inception on 12/08/06. The Fund's past performance does not guarantee future results. The investment return and principal value of an investment in the Fund 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 gross expense ratio of the Fund is 2.09%, and the net expense ratio after contractual fee waivers is 1.31%. The advisor has contracted with the Fund to waive fees to maintain a 1.24% expense ratio (excluding indirect expenses) for shareholders of the Fund through January 31, 2011.
Information provided with respect to the Fund's portfolio holdings, sector weightings, number of holdings and expense ratios are as of March 31, 2010 and are subject to change at any time. The statements of Fund management represent their opinions as of the date of the release and may change. Nothing contained herein is a solicitation to buy or sell a particular security. Rankings are historical with capital gains and dividends reinvested. Appleseed's #1 Morningstar ranking for both the socially responsible domestic equity fund and mid cap value fund is based on its 3-year performance through 3/31/10 versus 136 other domestic equity SRI mutual fund classes and versus 310 other mid-cap value funds.
For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five- and ten-year (if applicable) Morningstar Rating metrics. Appleseed Fund was rated against the 331 U.S.-domiciled mid-cap value funds over the three years ended February 28th, 2010. With respect to these mid-cap value funds, Appleseed Fund received a Morningstar Rating of five stars. Past performance is no guarantee of future results.
Novartis represented 2.5% of the portfolio, Pfizer represented 11.2% of the portfolio, PDI Inc. represented 3.0% of the portfolio, Female Health Company represented 0.2% of the portfolio, and Willis Group represented 4.8% of the portfolio on March 31, 2010.
You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses of the Fund before investing. The Fund's prospectus contains this and other information about the Fund, and should be read carefully before investing. You may obtain a current copy of the Fund's prospectus or performance data current to the most recent month end by calling 1-800-470-1029. The investment return and principal value of an investment in the Fund will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
The S&P 500 Index is a widely recognized unmanaged index of equity prices and are representative of a broader market and range of securities than is found in the Fund's portfolio. The Index returns do not reflect the deduction of expenses, which have been deducted from the Fund's returns. The Index return assumes reinvestment of all distributions and does not reflect the deduction of taxes and fees. Individuals cannot invest directly in the Index, however, an individual can invest in exchange traded funds or other investment vehicles that attempt to track the performance of a benchmark index.
Investments in international markets present special risks including currency fluctuation, the potential for diplomatic and political instability, regulatory and liquidity risks, foreign taxation and differences in auditing and other financial standards. Risks of foreign investing are generally intensified for investments in emerging markets.
There is no guarantee that this or any investment strategy will succeed; the strategy is not an indicator of future performance; and investment results may vary. Distributed by Unified Financial Securities, Inc., 2960 North Meridian Street, Suite 300, Indianapolis, IN 46208. (Member FINRA)
Capital Insight Partners