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Investment Strategy

The Driehaus Emerging Markets Small Cap Growth Fund seeks superior risk-adjusted returns over full market cycles relative to those of the MSCI Emerging Markets Small Cap Index. The Fund provides exposure to emerging market small cap equities with the objective of providing less volatility and downside risk than the MSCI Emerging Markets and EM Small Cap indices. Historically, the fund's benchmark agnostic investment approach and a focus on bottom-up stock selection have resulted in a high active share.

 

Fund Facts

Inception Date: 8/22/2011*
Ticker: DRESX
Assets Under Management as of 12/31/2016: $262 million
Open to New Investors: Yes
Minimum Initial Investment: $10,000
Minimum Subsequent Investment: $2,000
Minimum IRA Investment: $2,000
Minimum Subsequent IRA Investment: $500
Distributions: Dividends and capital gains are distributed annually in December
Investment Vehicles: Mutual fund



Growth of $10,000 Since Inception (12/1/2008)**

as of 12/31/2016:

 


Sources: Driehaus Capital Management LLC, Morgan Stanley Capital International Inc., Lipper Investment Management

*The Fund's predecessor limited partnership has an inception date of 12/1/2008.

**The Growth of $10,000 performance of the of the Driehaus Emerging Markets Small Cap Growth Fund include the performance of the Fund's predecessor limited partnership, which is calculated from December 1, 2008 before the Fund commenced operations and succeeded to the assets of its predecessor on August 22, 2011. The predecessor limited partnership was not registered under the Investment Company Act of 1940, as amended ("1940 Act") and thus was not subject to certain investment and operational restrictions that are imposed by the 1940 Act. If the predecessor had been registered under the 1940 Act, its performance may have been adversely affected. The Fund's predecessor performance has been restated to reflect estimated expenses of the Fund. After-tax performance returns are not included for the predecessor limited partnership. The predecessor was not a regulated investment company and therefore did not distribute current or accumulated earnings.

1The Morgan Stanley Capital International Emerging Markets Small Cap Index (MSCI Emerging Markets Small Cap Index) is a market capitalization-weighted index designed to measure equity market performance of small cap stocks in global emerging markets. Data is in US Dollars. The net dividend (ND) index is calculated with net dividend reinvestment. The gross dividend (GD) index is calculated with gross dividend reinvestment. The benchmark has changed from the MSCI Emerging Markets Small Cap Index (GD) to the MSCI Emerging Markets Small Cap Index (ND) because the net index is more commonly used industry wide and is more representative of the fund.

2The Morgan Stanley Capital International Emerging Markets Index (MSCI Emerging Markets Index) is a market capitalization-weighted index designed to measure equity market performance in global emerging markets. Data is in US Dollars. The net dividend (ND) index is calculated with net dividend reinvestment.


Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (800) 560-6111.  Please read the prospectus and summary prospectus carefully before investing.

Driehaus Securities LLC, Distributor

 

 

Performance Disclosure
The performance data shown below represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted. Principal value and investment returns will fluctuate so that investors' shares, when redeemed, may be worth more or less than their original cost. The Fund will charge a redemption fee of 2.00% on shares held less than 60 days.

Performance data represents the rate that an investor would have earned (or lost) on an investment in the Funds (assuming reinvestment of all dividends and distributions). Average annual total return reflects annualized change.

Since Fund performance is subject to change after the month-end, please call (800) 560-6111 or view our daily NAVs for more current performance information.

Month-End Performance as of 1/31/2017

Fund/Index MTH YTD 1 Year 3 Year 5 Year 10 Year Since Inception*
Driehaus Emerging Markets Small Cap Growth Fund1 3.57% 3.57% -4.59% -4.41% 3.55% n/a 10.84%
MSCI Emerging Markets Small Cap Index (ND)2 4.68% 4.68% 16.22% 1.17% 2.35% n/a 13.33%
MSCI Emerging Markets Small Cap Index (GD)2 4.69% 4.69% 16.54% 1.47% 2.66% n/a 13.65%
MSCI Emerging Markets Index (ND)3 5.47% 5.47% 25.41% 1.44% 0.19% n/a 9.49%

 

Calendar Quarter-End Performance as of 12/31/2016

Fund/Index QTR YTD 1 Year 3 Year 5 Year 10 Year Since Inception*
Driehaus Emerging Markets Small Cap Growth Fund1 -10.80% -9.97% -9.97% -5.09% 4.31% n/a 10.49%
MSCI Emerging Markets Small Cap Index (ND)2 -6.23% 2.28% 2.28% -1.27% 3.51% n/a 12.84%
MSCI Emerging Markets Small Cap Index (GD)2 -6.18% 2.56% 2.56% -0.97% 3.83% n/a 13.16%
MSCI Emerging Markets Index (ND)3 -4.16% 11.19% 11.19% -2.55% 1.28% n/a 8.87%

 

Annual Fund Operating Expenses4

 

Management Fee 1.50%
Other Expenses: 0.19%
Total Annual Fund Operating Expenses 1.69%

 


Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (800) 560-6111.  Please read the prospectus and summary prospectus carefully before investing.

Sources: Driehaus Capital Management LLC, Morgan Stanley Capital International Inc., SS&C Inc.

Average Annual Total Return

* “Since Inception” is calculated to include performance from the Fund’s predecessor limited partnership. (Inception Date: 12/1/2008)

1The average annual total returns of the Driehaus Emerging Markets Small Cap Growth Fund include the performance of the Fund's predecessor limited partnership, which is calculated from December 1, 2008 before the Fund commenced operations and succeeded to the assets of its predecessor on August 22, 2011. The predecessor limited partnership was not registered under the Investment Company Act of 1940, as amended ("1940 Act") and thus was not subject to certain investment and operational restrictions that are imposed by the 1940 Act. If the predecessor had been registered under the 1940 Act, its performance may have been adversely affected. The Fund's predecessor performance has been restated to reflect estimated expenses of the Fund. After-tax performance returns are not included for the predecessor limited partnership. The predecessor was not a regulated investment company and therefore did not distribute current or accumulated earnings.

2The Morgan Stanley Capital International Emerging Markets Small Cap Index (MSCI Emerging Markets Small Cap Index) is a market capitalization-weighted index designed to measure equity market performance of small cap stocks in global emerging markets. Data is in US Dollars. The net dividend (ND) index is calculated with net dividend reinvestment. The gross dividend (GD) index is calculated with gross dividend reinvestment. The benchmark has changed from the MSCI Emerging Markets Small Cap Index (GD) to the MSCI Emerging Markets Small Cap Index (ND) because the net index is more commonly used industry wide and is a more representative comparison versus the fund because it is presented net of foreign withholding taxes.

3The Morgan Stanley Capital International Emerging Markets Index (MSCI Emerging Markets Index) is a market capitalization-weighted index designed to measure equity market performance in global emerging markets. Data is in US Dollars. The net dividend (ND) index is calculated with net dividend reinvestment.

4Represents the Annual Fund Operating Expenses as disclosed in the current prospectus dated April 30, 2016. It is important to understand that a decline in the Fund’s average net assets due to unprecedented market volatility or other factors could cause the Fund’s expense ratio for the current fiscal year to be higher than the expense information presented.

Important MSCI disclosures

Driehaus Securities LLC, Distributor

 

 

 

Portfolio Characteristics

as of 12/31/2016 | updated quarterly
  Fund Benchmark
Number of Holdings 102 1,840
Weighted Avg. Market Cap (M) $2,605 $1,029
Median Market Cap (M) $1,897 $581
Active Share (3-year avg.)* 100.16 n/a
Market Cap Breakout
< $5 billion 87.9% 100.0%
> $5 billion 12.1% 0.0%
Risk-adjusted and Risk Characteristics (3-year period)
Standard Deviation 12.43 15.20
Upside Capture 61.36 100.00
Downside Capture 59.78 100.00
Beta 0.65 1.00
Alpha 2.04 n/a
Sharpe Ratio 0.34 0.23
R-Square 0.63 1.00
Tracking Error 9.26 0.00
Information Ratio 0.09 n/a
# Negative Monthly Returns 24 27
# Positive Monthly Returns 36 33

 

Regional Exposures

as of 12/31/2016 | updated quarterly
  Fund
Frontier Market 5.7%
Emerging Market 88.1%
Other Countries** 6.3%

 

Sector Weightings

as of 12/31/2016 | updated quarterly
  Fund Benchmark
Consumer Discretionary 19.0% 16.4%
Consumer Staples 3.7% 6.8%
Energy 5.0% 1.8%
Financials 15.2% 8.8%
Health Care 5.0% 8.9%
Industrials 17.1% 15.2%
Information Technology 13.4% 16.6%
Materials 6.7% 11.6%
Real Estate 1.1% 9.1%
Telecommunication Services 1.9% 1.0%
Utilities 7.6% 3.7%
Cash 7.7% 0.0%
Unassigned -3.5% 0.0%

 

Country Weightings

as of 12/31/2016 | updated quarterly
  Fund Benchmark
Argentina 1.9% 0.0%
Brazil 7.3% 4.2%
Chile 0.0% 1.1%
China/Hong Kong 11.4% 16.0%
Colombia 0.0% 0.1%
Czech Republic 2.4% 0.0%
Egypt 0.9% 0.4%
Greece 0.0% 0.6%
Hungary 0.0% 0.1%
India 12.4% 11.7%
Indonesia 2.4% 2.6%
Kenya 1.9% 0.0%
Malaysia 3.7% 3.1%
Mexico 5.8% 3.0%
Pakistan 1.8% 0.0%
Panama 0.0% 0.1%
Philippines 3.4% 1.1%
Poland 1.1% 1.1%
Qatar 0.0% 0.8%
Russia 2.5% 0.9%
South Africa 3.5% 5.8%
South Korea 3.6% 17.0%
Taiwan 12.0% 17.0%
Thailand 9.5% 4.0%
Turkey 1.4% 1.1%
United Arab Emirates 0.5% 0.8%
Other Countries** 3.7% 0.8%
Cash 7.7% 0.0%
Unassigned -0.9% 0.0%

 

Top 5 Equity Holdings***

as of 12/31/2016 | updated monthly
1. IRPC Public Co., Ltd. NVDR 2.5%
2. MONETA Money Bank AS 2.4%
3. Silergy Corp. 2.1%
4. My E.G. Services Bhd. 1.9%
5. Safaricom Limited 1.9%

 

 


Sources: Driehaus Capital Management LLC, Factset Research Systems, Inc., eVestment Alliance

*Active share calculated with options as an "out of benchmark" holding. Data is calculated monthly
**Other represents companies with significant emerging markets related exposures that are not domiciled within an emerging market.
***Holdings subject to change.

Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (800) 560-6111.  Please read the prospectus and summary prospectus carefully before investing.

TERMS: Active share represents the share of portfolio holdings that differ from the benchmark index holdings. Average drawdown is the arithmetic average of declines in value during a given period of time. Downside risk is a measure of the average deviations of a negative return series. A large downside risk implies that there have been large swings or volatility in the manager’s return series. Beta is a measure of a portfolio’s volatility. A beta of 1.00 implies perfect historical correlation of movement with the market. A higher beta manager will rise and fall more rapidly than the market, whereas a lower beta manager will rise and fall slower. Standard deviation is a measure of the average deviations of a return series from its mean; often used as a measure of portfolio volatility. A large standard deviation implies that there have been large swings or volatility in the manager’s return series. Tracking error measures of the amount of active risk that is being taken by a manager. Tracking error accounts for the deviation away from the benchmark and does not indicate in which direction it occurred, either positive or negative. Alpha is the measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund’s alpha. Sharpe ratio is calculated by finding the portfolio’s excess return and then dividing by the portfolio’s standard deviation. Information Ratio (IR) measures a portfolio manager’s ability to generate excess returns relative to a benchmark, but also attempts to identify the consistency of the investor. This ratio will identify if a manager has beaten the benchmark by a lot in a few months or a little every month. The higher the IR the more consistent a manager is and consistency is an ideal trait. R-Squared is a statistical measure that represents the percentage of a fund or security’s movements that can be explained by movements in a benchmark index. For fixed-income securities, the benchmark is the T-bill. For equities, the benchmark is the S&P 500.

Driehaus Securities LLC, Distributor

 

Principal Risks

All investments, including those in mutual funds, have risks. No investment is suitable for all investors. The Fund is intended for long-term investors who can accept the risks involved in investing in foreign securities. Of course, there can be no assurance that the Fund will achieve its objective. You may lose money by investing in the Fund. Below are the main risks of investing in the Fund:

Market Risk
The Fund is subject to market risk, which is the possibility that stock prices overall will decline over short or even long periods. Stock markets tend to move in cycles, with periods of rising prices and periods of falling prices. These fluctuations are expected to have a substantial influence on the value of the Fund’s shares.

Growth Stock Risk
Growth stocks are typically priced higher than other stocks, in relation to earnings and other measures, because investors believe they have more growth potential. This potential may or may not be realized and, if it is not realized, may result in a loss to the Fund. Growth stock prices also tend to be more volatile than the overall market.

Foreign Securities and Currencies Risk
The Fund invests in foreign securities. Investing outside the U.S. involves different risks than domestic investments. The following risks may be associated with foreign investments: less liquidity; greater volatility; political instability; restrictions on foreign investment and repatriation of capital; less complete and reliable information about foreign companies; reduced government supervision of some foreign securities markets; lower responsiveness of foreign management to shareholder concerns; economic issues or developments in foreign countries; fluctuation in exchange rates of foreign currencies and risks of devaluation; imposition of foreign withholding and other taxes; dependence of emerging market companies upon commodities which may be subject to economic cycles; and emerging market risk such as limited trading volume, expropriation, devaluation or other adverse political or social developments.

To the extent portfolio securities are issued by foreign issuers or denominated in foreign currencies, the Fund’s investment performance is affected by the strength or weakness of the U.S. dollar against these currencies.

Emerging Market Risk
The Fund invests primarily in emerging markets and therefore, the risks described above for foreign securities are typically increased. Investments in securities of issuers located in such countries are speculative and subject to certain special risks. The small size, limited trading volume and relative inexperience of the securities markets in these countries may make the Fund’s investments in such countries illiquid and more volatile than investments in more developed countries, and the Fund may be required to establish special custodial or other arrangements before making investments in these countries. There may be little financial or accounting information available with respect to issuers located in these countries, and it may be difficult as a result to assess the value or prospects of an investment in such issuers.

Small- and Medium-Sized Company Risk
The Fund invests in companies that are smaller, less established, with less liquid markets for their stock, and therefore may be riskier investments. While small- and medium-sized companies generally have the potential for rapid growth, the securities of these companies often involve greater risks than investments in larger, more established companies because small- and mediumsized companies may lack the management experience, financial resources, product diversification and competitive strengths of larger companies. In addition, in many instances the securities of small- and medium-sized companies are traded only over-thecounter or on a regional securities exchange, and the frequency and volume of their trading is substantially less than is typical of larger companies. The value of securities of smaller, less well known issuers can be more volatile than that of larger issuers.

Short Sale Risk
Short sales expose the Fund to the risk that it will be required to buy the security sold short (also known as “covering” the short position) at a time when the security has appreciated in value, thus resulting in a loss to the Fund. The amount the Fund could lose on a short sale is theoretically unlimited (as compared to a long position, where the maximum loss is the amount invested). The use of short sales may also cause the Fund to have higher expenses than those of other funds.

Options Risk
There are significant differences between the securities and options markets that could result in an imperfect correlation between these markets, causing a given transaction not to achieve its objectives because of market behavior or unexpected events. The Fund’s ability to utilize options successfully will depend on the ability of the Fund’s investment adviser to forecast certain market movements, which cannot be assured. Options may be volatile and there can be no assurance that a liquid secondary market will exist for a particular option at any particular time, even though the contract is traded on an exchange.

Nondiversification
Because the Fund may invest a greater percentage of assets in a particular issuer or a small number of issuers, it may be subject to greater risks and larger losses than diversified funds. The value of the Fund may vary more as a result of changes in the financial condition or the market’s assessment of the issuers than a more diversified fund.

Allocation Risk
The Fund’s overall risk level will depend on the countries and market sectors in which the Fund is invested. Because the Fund may have significant weightings in a particular company, country, industry or market sector, the value of Fund shares may be affected by events that adversely affect that company, country, industry or market sector and may fluctuate more than that of a less focused fund.

High Rates of Turnover
It is anticipated that the Fund will experience high rates of portfolio turnover, which may result in payment by the Fund of above average transaction costs and could result in the payment by shareholders of taxes on above-average amounts of realized investment gains, including net short-term capital gains, which are taxed as ordinary income for federal income tax purposes. To the extent the Fund engages in short sales (which are not included in calculating the portfolio turnover rate), the transaction costs incurred by the Fund are likely to be greater than the transaction costs incurred by a mutual fund that does not take short positions and has a similar portfolio turnover rate.

Manager Risk
How the Fund’s investment adviser manages the Fund will impact the Fund’s performance. The Fund may lose money if the investment adviser’s investment strategy does not achieve the Fund’s objective or the investment adviser does not implement the strategy successfully.

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Please consider the investment objectives, risks, fees and expenses of the Fund carefully prior to investing. The prospectus and summary prospectus contain this and other important information about the Fund. To obtain a copy of the prospectus/summary prospectus, please call us at (800) 560-6111.  Please read the prospectus and summary prospectus carefully before investing.

Driehaus Securities LLC, Distributor

 


Photo of Chad Cleaver

Chad Cleaver, CFA

Lead Portfolio Manager

Chad Cleaver is the lead portfolio manager for the Emerging Markets Small Cap Growth and Frontier Markets strategies and a portfolio manager for the Emerging Markets Growth strategy. In his role as lead portfolio manager, he has final responsibility for the strategy’s portfolio construction, risk management and buy/sell decisions. In his role as portfolio manager, he is responsible for idea generation, portfolio construction, security selection and investment research. He is also involved in daily tracking of the portfolio performance as well as macro-level trends and the market environment.

Mr. Cleaver began his career with the Board of Governors of the Federal Reserve System and joined Driehaus Capital Management in 2004. He received his A.B. in economics from Wabash College in 2000 and his MBA from the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill in 2004. Mr. Cleaver is a CFA charterholder.


Photo of Howard Schwab

Howard Schwab

Portfolio Manager

Howard Schwab is the lead portfolio manager for the Emerging Markets Growth strategy and a portfolio manager for the Emerging Markets Small Cap Growth strategy. In his role as lead portfolio manager, he has final responsibility for the strategy’s portfolio construction, risk management and buy/sell decisions. In his role as portfolio manager, he is responsible for idea generation, portfolio construction, security selection and investment research. He is also involved in analyzing macro-level trends and associated market risks. Mr. Schwab has been quoted in numerous financial outlets, including the Wall Street Journal, Morningstar.com and Smart Money. He has also appeared as a guest contributor on Bloomberg TV.

Mr. Schwab joined Driehaus Capital Management in 2001. During his tenure with Driehaus, in addition to the responsibilities referenced above, Mr. Schwab was also the co-portfolio manager for the Driehaus Global Growth strategy from 2008 through 2010, and co-portfolio manager for the Driehaus International Small Cap Growth strategy from 2002 through 2014. He received his B.A. in economics from Denison University in 2001.


Photo of Chad Cleaver

Richard Thies

Portfolio Manager

Richard Thies is a portfolio manager for the Driehaus Emerging Markets Growth, Driehaus Emerging Markets Small Cap Growth and the Driehaus Frontier Markets strategies. In this role, he is responsible for idea generation, portfolio construction, security selection and investment research. Additionally, Mr. Thies provides comprehensive macroeconomic analysis to the firm’s invest­ment management and research department, incorporating data releases, market expectations and government actions into forecasts for currencies, interest rates, sectors and mar­ket movements. Also, at the request of portfolio managers and analysts, he provides in-depth analysis of specific events and potential scenarios at the region, country and sector levels.

Mr. Thies began his career at the International Finance Corporation of the World Bank Group as a consultant for the gender entrepreneurship markets group in 2005. In 2008, Mr. Thies worked for Opportunity International as a proposal writer. He then worked as an associate international economist for The Northern Trust in 2009. He joined Driehaus Capital Management as a macro analyst in 2011. He received his Bachelor of Arts in international studies from Emory University in 2005 and his Master of Arts degree focused in international political economy from the University of Chicago in 2007.


Trent DeBruin, CFA

Assistant Portfolio Manager

Trent DeBruin is the assistant portfolio manager for the Driehaus Emerging Markets Small Cap Growth strategy. In this role, he is responsible for providing depth of leadership to the research team and iden­tifying appropriate investment ideas relevant to the strategy. Additionally, Mr. DeBruin acts as a senior analyst focusing on emerging and frontier market stocks within the consumer discretionary, consumer staples, financials and health care sectors.

Mr. DeBruin began his career at Driehaus Capital Management in 2007 as an associate analyst. He received his B.A. in finance from the University of Notre Dame in 2007. In 2013, Mr. DeBruin earned his MBA from the University of Chicago Booth School of Business, where he received the Outstanding Academic Award for highest GPA in his graduating class. Mr. DeBruin is a CFA charterholder.

 

 

Driehaus Securities LLC, Distributor

Fund Literature

Fund Fact Sheet
Monthly Fund Summary
January 31, 2017
The Evolving Emerging Markets Opportunity Set
January 2016
Global Market Outlook
December 2016
Thoughts from the Driehaus Emerging Markets Team
September 2015
The Emerging Markets Style Rotation
September 2014
Emerging Markets Commentary Archive
Fund Commentary Archive
Portfolio Holdings
December 31, 2016
Prospectus
April 30, 2016
Summary Prospectus
April 30, 2016
Statement of Additional Information
April 30, 2016
Annual Shareholder Report
December 31, 2015
Semi-Annual Shareholder Report
June 30, 2016
 
XBRL File
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April 30, 2016

 

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Driehaus Securities LLC, Distributor