Frontier’s Small Cap Value Strategy Celebrates a Quarter Century Milestone

BOSTON, MA (March 11, 2024) – Frontier Capital Management Company, LLC is celebrating a significant milestone this year as its Small Cap Value strategy marks its 25th anniversary.

Since its inception in January 1999, the Small Cap Value portfolio has demonstrated superior performance, achieving an annualized return, net of investment management fees, of 13.1%(ending 12/31/2023), outpacing the Russell 2000® Value Index,¹ which returned 8.6% over the same period.

This success places the strategy in the top 1% among peer portfolios for the 25 year period ending December 31, 2023 (based on self-reported net performance of 65 small cap value products aggregated by eVestment Alliance; Frontier pays eVestment Alliance a subscription fee in order to access these rankings.)

The Frontier Small Cap Value strategy pursues long-term capital appreciation by employing a relative value approach to identify U.S. small-capitalization equity companies. It uses a disciplined analytical process that targets firms that typically trade below historical valuation measures while having strong long-term earnings potential, talented management teams, reasonable financial leverage and good earnings quality.

The strategy is co-managed by William A. Teichner, CFA and Rushan (Greg) Jiang, CFA who joined the firm in 1992 and 2005, respectively. Mr. Teichner and Mr. Jiang are supported by a team of 12 investment analysts. For more than 40 years Frontier has focused on small and midcap U.S. companies leading to a depth of experience in investing in these asset classes.

“I am thrilled the strategy has achieved this quarter century milestone along with an outstanding peer portfolio ranking,” stated Mr. Teichner, who co-founded the firm’s Small Cap Value strategy together with retired co-portfolio manager T.J. Duncan. “As co-portfolio managers, Greg and I recognize that much credit for the positive outcomes our clients have enjoyed belongs to Frontier’s team of highly-skilled research analysts.”

¹The Russell 2000 Value® Index is a trademark of Russell Investments. Russell Investments is the owner of the trademarks, service marks and copyrights related to its respective indexes.

Past performance does not guarantee future results. Information herein refers to the composite and is provided for illustrative purposes only. Net-of-fees returns are calculated monthly by deducting 1/12 of 1.0%, which is the standard client fee schedule, from the composite gross-of-fees return. Some clients have fee arrangements that are lower than the standard client fee schedule and/or include a performance-based fee; their actual net performance may be higher than the composite. Refer to the end of this document for additional details and GIPS Report. Index returns do not reflect any fees or expenses. Presentation of the index performance is for comparison purposes only. Indexes are unmanaged and one cannot invest directly in an index.

About Frontier Capital Management Company, LLC

Founded in 1980, Frontier Capital Management Company, LLC is a Boston-based investment management firm specializing in small and mid-cap strategies. The firm manages $10.1 billion (as of 12/31/2023) across five strategies on behalf of worldwide institutional investors. In 2000, Frontier partnered with Affiliated Managers Group, Inc. (NYSE: AMG), a global asset management company with equity interests in leading investment firms. Through this partnership, Frontier retains operational and investment autonomy and direct equity ownership across successive generations while leveraging access to the scale and resources of a large organization. For additional information, visit www.frontiercap.com.

Disclaimer

Investment in the Frontier Small Cap Value strategy entails risk of loss. The principal risks include:

Small Capitalization Companies. Small capitalization companies tend to be more vulnerable to adverse developments than larger companies. These companies may have limited product lines, markets, or financial resources, or may depend on a limited management group. They may be recently organized, without proven records of success. Their securities may trade infrequently and in limited volumes. As a result, the prices of these securities may fluctuate more than prices of securities of larger, more widely traded companies and the portfolio may experience difficulty in establishing or closing out positions in these securities at prevailing market prices. Also, there may be less publicly available information about small capitalization companies or less market interest in their securities as compared to larger companies, and it may take longer for the prices of the securities to reflect the full value of their issuers’ earnings potential or assets.

Market Risk. Market prices of securities held by the strategy may fall rapidly or unpredictably and will rise and fall due to a variety of factors, including changing economic, political or market conditions or in response to events that affect particular industries or companies.

Sector Risk. Investment strategies focused on or concentrated in a single sector may be affected by particular economic or market events and could be more volatile than a strategy with securities across industry sectors.

Concentration Risk. Concentrated portfolios that invest in a relatively small number of securities may have more risk because changes in the value of a single security or the impact of a single economic, political or regulatory occurrence may have a greater adverse impact on the strategy’s performance.

Value Risk. Value stocks present the risk that a stock may decline in price or never reach what the strategy believes is its full market value. Companies that issue value securities may have experienced adverse business developments or may be subject to special risks that have caused their securities to be out of favor. Value stocks may underperform growth stocks and stocks in other broad style categories (and the stock market as a whole) during given periods.

Geopolitical Risk. Geopolitical events, including but not limited to terrorist attacks, military conflicts, changes in a country’s political status and country/regional unrest or upheaval, has led and may in the future lead to increased short-term market volatility and may have long-term effects on U.S. and world economies and financial markets. Those events could also have an acute effect on individual issuers, related groups of issuers, or issuers concentrated in a single geographic area as well as the value of investments exposed to affected countries and regions. A similar disruption of the financial markets or other geopolitical events could adversely impact interest rates, auctions, secondary trading, ratings, credit risk, inflation and other factors that may affect the strategy’s performance.

Foreign Investment Risk. Securities of issuers domiciled outside the United States, or with significant operations outside the United States, may lose value because of political, social or economic developments in the countries or regions in which the issuer operates. These securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Investments outside the United States may also be subject to different settlement and accounting practices and different regulatory, legal and reporting standards, and may be more difficult to value, than those in the United States. These risks may be heightened in connection with investments in emerging market and developing countries.

There is no guarantee that this investment strategy will work under all market conditions, and each investor should evaluate his or her ability to invest for a long term, especially during periods of downturn in the market.