Long/Short Value Fund

Our objective is to maximize total returns while maintaining a target beta of 0.50% by exploiting the skew in long-term performance between cheap and expensive stocks, as identified by Pzena through its price/normalized earnings calculations.

Fundamental research is the core of our investment process. Our long positions are typically in companies that are experiencing difficulties that our research suggests are likely to be temporary. We believe that very poor profitability tends not to persist. Over time, cycles turn, management takes actions, costs are cut, and excess industry capacity diminishes. For our shorts, we focus on stocks that screen as expensive on a price/normalized earnings basis because the market has gotten too optimistic about future earnings. We believe that very high levels of profitability or earnings growth usually are not sustainable, because of the principals of supply and demand.

Our investment process is bottom-up, one stock at a time. We do not value sectors in aggregate nor do we make explicit allocations to sectors, though we limit individual security and sector weights to control for risk.


Characteristics as of 12/31/16

Long Exposure 109%
Short Exposure 52%
Number of Stocks - Long 70
Number of Stocks - Short 78


Sector Weights as of 12/31/16

Russell 1000®
Consumer Discretionary 8% 12%
Consumer Staples 5% 9%
Energy 2% 7%
Financials 37% 15%
Health Care 11% 13%
Industrials -1% 11%
Information Technology 1% 20%
Materials -3% 3%
Real Estate 1% 4%
Telecom Services -2% 3%
Utilities 0% 3%

Sector weights adjusted for cash - may appear higher than actual.


Top 5 Holdings - Long as of 12/31/16

  % of Net Assets
Lamar Advertising Co. 3.6%
Axis Capital Holdings, Ltd. 3.6%
Wal-Mart Stores, Inc. 3.3%
Omnicom Group, Inc. 3.2%
Voya Financial, Inc. 2.7%
Total 16.4%


Top 5 Holdings - Short as of 12/31/16

  % of Net Assets
ACADIA Pharmaceuticals, Inc. -0.9%
HD Supply Holdings, Inc. -0.8%
Square, Inc. - Class A -0.8%
Core Laboratories N.V. -0.8%
PDC Energy, Inc. -0.8%
Total -4.1%


Performance as of 12/31/16

Since Inception
Mar 31, 2014
PZILX - Institutional Class 12.24% 15.81% 15.81% 3.95%
PZVLX - Investor Class 12.00% 15.33% 15.33% 3.63%
Russell 1000® Index 3.83% 12.05% 12.05% 8.59%
50% Russell 1000® Index /
50% BofA Merrill Lynch 0-3 Mo. T-Bill Index
1.96% 6.14% 6.14% 4.41%

PZILX Expense Ratio: Gross: 10.39%, Net: 2.81%*, Cap: 1.75%
PZVLX Expense Ratio: Gross: 10.74%, Net: 3.16%*, Cap: 2.10%


Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an invest- ment 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. Performance data current to the most recent month end may be obtained by calling 844.PZN.1996 (844.796.1996). The fund imposes a 1.00% redemption fee on shares held 60 days or less. Performance does not reflect the redemption fee and, if it had, returns would have been lower.

*Contractual fee waivers (excluding acquired fund fees and expenses ("AFFE"), interest expense, taxes, dividends on securities sold short and extraordinary expenses) through 6/27/17.

Beta is a statistic that measures the volatility of the fund, as compared to that of the overall market. Long and short exposure reflects the Fund's percentage of net assets invested in long positions (securities purchased) and short positions (securities sold short). This Fund enters into a short sale by selling a security it has borrowed. If the market price of a security increases after the Fund borrows the security, the Fund will suffer a potentially unlimited loss when it replaces the borrowed security at the higher price. Short sales also involve transaction and other costs that will reduce potential Fund gains and increase potential Fund losses.

The Russell 1000 Index is an unmanaged index and is a subset of the Russell 3000 Index; it measures the performance of approximately 1000 of the largest securities based on a combination of their market cap and current index membership. The Index cannot be invested in directly. The blended index represents a 50% weighting of the Russell 1000 Index, described above, and a 50% weighting of the Bank of America Merrill Lynch 3-month U.S. Treasury Bill Index. The Bank of America Merrill Lynch 3-month U.S. Treasury Bill Index measures the performance of short-term U.S. Government securities with a remaining term to final maturity of less than three months. The Index cannot be invested in directly.

Fund holdings, Sector exposure and characteristics are as of the date shown and are subject to change at any time. As a result, the Fund's current and future holdings, Sector exposure and characteristics may vary substantially from the information shown. No recommendation is made regarding the advisability of buying or selling any security.