Brian Yacktman: “…AON (AON) and Marsh & McLennan (MMC) and here’s the thing about it – if you’re uncomfortable to invest because you’re worried…what if global GDP slows down? First of all, they’re acyclical recession resistant business, because so long as there’s business being conducted in the world, there’s insurance needs and then if over the long run, as global GDP goes up and the rise of global wealth, then they will continue to be that toll taker on that growth. So there’s built-in somewhat protection on the downside but long runway for growth. Another concern that so many people have and talk about rates are headed down, just think a year ago people were worried that rates were going to lock step go up, and here we are a year later – they’re actually going down! Well what happens if interest rates surprise to the upside a lot of the multiples because rates are so low are so high that means that when rates start to potentially move up, you’re going to be blindsided as multiples compress. Well a business like AON and/or MMC…not only is their multiple reasonable, but if interest rates rise, they have over 10 billion dollars of float on their balance sheet from insurance premiums they’ve collected which would give them a bump to earnings and would help offset the possible multiple compression.”
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Earnings Growth is not a measure of the Fund’s future performance.
The Morningstar Rating™ for funds, or “star rating”, is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history, without adjustment for sales loads. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product’s monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product 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. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. The YCGEX Fund was rated against the following numbers of Large Blend Funds over the following time periods as of 03/31/2020: 1214 funds overall, 1127 funds in the last three years, and 982 funds in the last five years. With respect to these Large Blend Funds, YCGEX Fund received a Morningstar Rating of 5 stars, 5 stars and 5 stars for the overall, three-, and five- year periods, respectively.
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Morningstar ranked YCGEX in the top 10%, 3% and 3% out of 1229, 1127 and 982 for the Large Cap Blend Category for the one-, three- and five-year periods ending 03/31/2020, respectively. Morningstar Rankings represent a fund’s total-return percentile rank relative to all funds that have the same Morningstar Category. The highest percentile rank is 1 and the lowest is 100. It is based on Morningstar total return, which includes both income and capital gains or losses and is not adjusted for sales charges or redemption fees.
Credit ratings are grades given to bonds that indicate their credit quality as determined by a private independent rating service such as Standard & Poor’s. The firm evaluates a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. In limited situations when the rating agency has not issued a formal rating, the rating agency will classify the security as nonrated.
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