To pursue its objective, under normal circumstances, the Fund invests at least 80% of its net assets in a diversified portfolio of common stocks of Mid Cap U.S. companies that demonstrate governance diversity and leadership.
Cavanal Hill's Mid Cap Diverse Leadership Fund employs a quantitative approach that utilizes our best ideas for selecting stocks while also keeping a watchful eye on risk management.
Our data-driven research provides us with guidelines for the investment themes which, we believe, have a better chance of success over the long term and which ones work more reliably in a given set of circumstances. This research, combined with constant monitoring of the economic landscape and sophisticated analytics, gives us the ability to build a portfolio that we believe is suited not only to what the market finds important today, but also to what it may value tomorrow.
The portfolio management team's final investment selection process continues to favor companies with strong governance, diversity and leadership ESG screening criteria rankings relative to industry peers. The risk ratings, combined with qualitative analyses, of key governance, diversity and leadership performance indicators are given more or less relative weight compared to the broader range of potential assessment categories.
This process not only guides us in selecting individual stocks, it is also a key element of managing the funds' overall risk. Further, it provides a broader view of what's going on in the market, where we believe the best ideas are coming from now, and where we should be looking in the future. Overall, having a process that can potentially successfully navigate the market's twists and turns is essential to generating better risk-adjusted outcomes over the long run.
Loss of money is a risk of investing in the Fund. In addition, the principal risks of investing in the Fund, which could adversely affect the Fund’s net asset value, yield or total return are: The market value of a security may move up and down, sometimes rapidly and unpredictably. The risk that the stocks of mid-capitalization companies often have greater price volatility, lower trading volume, and less liquidity than the stocks of larger, more established companies. The value of a security may decline for a number of reasons which directly relate to the issuer, such as management performance, earnings and sales trends, investor perceptions, financial leverage or reduced demand for the issuer’s goods or services. Small cap companies may be more vulnerable to adverse business or economic developments. They may also be less liquid and/or more volatile than securities of larger companies or the market averages in general. Small cap companies may be adversely affected during periods when investors prefer to hold securities of large capitalization companies. A Fund may engage in active and frequent trading to achieve its principal investment objectives. This may result in the realization and distribution to shareholders of higher capital gains as compared to a fund with less active trading policies, which would increase and investor’s tax liability unless shares are held through a tax deferred or exempt vehicle. Frequent trading also increases transaction costs, which could detract from a Fund’s performance. There is no guarantee that the investment techniques and analyses used by the Fund’s portfolio managers will produce the desired results. In making investment consistent with ESG considerations, the Fund may choose to sell, or not to purchase, investments that are otherwise consistent with its investment objective. The application of ESG criteria will affect he Fund’s exposure to certain issuers, industries, sectors, regions and countries and my impact the relative financial performance of the Fund – positively or negatively – depending on whether such investments are in or out of favor. Investment selected using quantitative methods employ models that are built, developed, and tested using historical data in a predictive fashion. The success of such models depend on a number of factors, including the validity, accuracy and completeness of the model’s development, implementation and maintenance, the model’s assumptions, factors, algorithms and methodologies, and the accuracy and reliability of the historical data. While historical relationships can be measured and quantified, there is no guarantees that such relationships will persist going forward. Data for some companies may be less available, less current or inaccurate and investment selection could be adversely affected if erroneous or outdated data is utilized. The weight placed on a particular data characteristic in the model or changes in the market may cause performance to differ from what the model predicts or the market as a whole. There can be no assurance that quantitative methodologies will enable the Fund to achieve its objective. Higher transaction costs, delayed settlements, currency controls or adverse economic and political developments may affect foreign investments.
To the extent that the Fund makes investments with additional risks, those risks could increase volatility or reduce performance. The Fund may trade securities actively, which could increase its transaction costs (thus lowering performance) and may increase the amount of taxes that you pay.
Overall Morningstar rating out of 360 US OE Fund Mid-Cap blend (for the overall period ending 3/31/2022, Institutional Shares)
|Overall Morningstar Rating|
|Morningstar Sustainability Rating|
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. 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.
Cavanal Hill Mid Cap Core Fund was rated against the following numbers of US OE Fund Mid-Cap Blend over the following time periods: 360 funds in the last three years, and 313 funds in the last five years.
Past performance is no guarantee of future results.
The Morningstar Sustainability Rating is intended to measure how well the issuing companies of the securities within a fund’s portfolio holdings are managing their financially material environmental, social and governance, or ESG, risks relative to the fund’s Morningstar global Category peers.
The Morningstar Sustainability Rating calculation is a five-step process. First, each fund with at least 67% of assets covered by a company-level ESG Risk Score from Sustainalytics receives a Morningstar Portfolio Sustainability Score. The Morningstar Portfolio Sustainability Score is an asset-weighted average of company-level ESG Risk Scores. The Portfolio Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk.
Second, the Historical Sustainability Score is an exponential weighted moving average of the Portfolio Sustainability Scores over the past 12 months. The process rescales the current Portfolio Sustainability Score to reflet the consistency of the scores. The Historical Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk, on a consistent historical basis.
Third, the Morningstar Sustainability Rating is then assigned to all scored funds within Morningstar Global Categories in which at least thirty (30) funds receive a Historical Sustainability Score and is determined by each fund’s Morningstar Sustainability Rating Score rank within the following distribution. High (highest 10%0, Above Average (next 22.5%), Average (next 35%), Below Average (next 22.5%), and Low (lowest 10%).
Fourth, we apply a 1% rating buffer from the previous month to increase rating stability. This means a fund must move 1% beyond the rating breakpoint to change ratings.
Fifth, we adjust downward positive Sustainability Ratings to funds with high ESG Risk scores.
The Logic is as follows: If a Portfolio Sustainability Score is above 40, then the fund receives a Low Sustainability Rating, if a Portfolio Sustainability score is above 35 and preliminary rating is Average or better, then the fund is downgraded to Below Average, if a Portfolio Sustainability score is above 30 and preliminary rating is Above Average, then the fund is downgraded to Average, and if a Portfolio Sustainability score is below 30, then no adjustment is made.
The Morningstar Sustainability Rating is depicted by globe icons where High equals 5 globes and Low equals 1 globe. Since a Sustainability Rating is assigned to all funds that meet the above criteria, the rating is not limited to funds with explicit sustainable or responsible investment mandates.
Morningstar updates its Sustainability Ratings monthly. The Portfolio Sustainability Score is calculated when Morningstar receives a new portfolio. Then, the Historical Sustainability Score and the Sustainability Rating is calculated one month and six business days after the reported as-of date of the most recent portfolio. As part of the evaluation process, Morningstar uses Sustainalytics’ ESG scores from the same month as the portfolio as-of date.
Please visit http://corporate1.Morningstar.com/SustainableInvesting/ for more detailed information about the Morningstar Sustainability Rating methodology and calculation frequency.
Category: US OE Fund Mid-Cap Blend (as of 3/31/2022)
Rankings are for Institutional Class and are based on total return excluding sales charges, independently calculated and not combined to create an overall ranking. For periods not shown, Morningstar does not provide rankings based on synthetic performance.
Morningstar rankings are based on a fund's average annual total return relative to all funds in the same Morningstar category. Fund performance used within the rankings, reflects certain fee waivers, without which, returns and Morningstar rankings would have been lower. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100.
© 2022 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information.
Category: Lipper Mid-Cap Core Funds (as of 3/31/2022)
|Class A||Class C||Investor||Institutional|
|Net Asset Value||$12.48||$12.03||$12.37||$12.42|
|Gross Expense Ratio||12.13%||13.03%||12.28%||12.03%|
|Net Expense Ratio||1.06%||1.81%||1.06%||0.81%|
|Total Net Assets||$4,942,199|
|Number of Holdings||99|
|Trailing 4 Quarters P/E Ratio||19.5x|
|Mean (Average) Market Capitalization||$20.5 bil.|
Currently, contractual fee waivers are in effect from December 28, 2021 through December 31, 2022.