Disclosures & Notes

Not An Offer or Inducement

Nuance Investments, LLC (Nuance or the Company) has created this site for informational purposes only and does not constitute an offer or solicitation to sell shares or securities in the Company or any related or associated company. Any such offer or solicitation will be made only by means of the Company's offer of discretionary investment management services under written contract. None of the information or analyses presented are intended to form the basis for any investment decision, and no specific recommendations are intended. The content on this site does not constitute investment advice or counsel or solicitation for investment in any security. This site does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or any invitation to offer to buy or subscribe for, any securities, nor should it or any part of it form the basis of, or be relied on in any connection with, any contract or commitment whatsoever. The Company expressly disclaims any and all responsibility for any direct or consequential loss or damage of any kind whatsoever arising directly or indirectly from: (i) the use of this presentation book, (ii) reliance on any information contained herein, (iii) any error, omission or inaccuracy in any such information or (iv) any action resulting therefrom.

Investment Performance

Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this documentation and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested.

No Warranties

Nuance takes care to ensure that the information provided is accurate and up to date. However this documentation is provided without warranties of any kind, either expressed or implied, including but not limited to warranties of title or implied warranties of merchantability or fitness for a particular purpose. Opinions expressed herein are subject to change without notice. All information and content in this book is furnished "as is," without warranty of any kind, express or implied, including but not limited to implied warranties of merchantability, fitness for a particular purpose, or non-infringement. The Company will not assume any liability for any loss or damage kind, arising, whether direct or indirect, caused by the use of any part of the information provided.


Copyright

You may not copy, reproduce, recompile, decompile, disassemble, reverse engineer, distribute, publish, display, perform, modify, upload to, create derivative works from, transmit or in any way exploit any part of this material, except that you may use for your own personal, noncommercial use. The analysis and presentation included in this material may not be re-circulated, redistributed or published without our prior written consent. Modification of the materials content would be a violation of our copyright and other proprietary rights. Additionally, you may not offer any part of this material for sale or distribute it over any other medium including but not limited to over-the-air television or radio broadcast, a computer network or hyperlink framing on the internet without our prior written consent. The information contained herein may not be used to construct a database of any kind. Nor may the information be stored (in its entirety or in any part) in databases for access by you or any third party or to distribute any database services containing all or part of the information without our prior written consent.


GIPS COMPLIANCE DISCLOSURES


Compliance Statement

Nuance claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS® standards. Nuance has been independently verified for the periods 11/03/08 – 03/31/16 by Absolute Performance Verification. The verification reports are available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. Nuance is an investment adviser registered with the Securities and Exchange Commission. The firm maintains a complete list and description of composites, which is available upon request. Results are based on fully discretionary separate accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to express performance returns and assets. Performance results are presented both net and gross of management fees and include the reinvestment of income. Both gross and net of fee returns are reduced by trading expenses. Net of fee returns are reduced by Actual investment advisory fees and other expenses that may be incurred in the management of the account. The firm does not currently assess any Performance Based Fees. From the inception of each composite until 12/31/10, Time Weighted Return was compounded on a monthly basis. Beginning 01/01/11 through present, Time Weighted Return was compounded on a daily basis.


Definition of the Firm

The definition of the firm is the foundation for firm-wide compliance and creates defined boundaries for determining the assets of the firm. In this instance, the firm is defined as Nuance Investments, LLC (Nuance), a majority owned subsidiary of Montage Investments, LLC (“Montage”). Montage is a wholly owned subsidiary of Mariner Holdings, LLC. Nuance founded on November 1, 2008, was formed on the belief that the ability to outperform the broad stock market is predicated on a consistent and disciplined value investing approach. The Investment Management Team selects securities for the Nuance investment portfolio’s by using an extensive quantitative screening and fundamental research process that identifies leading businesses selling at a discount to fair value and that have the potential to generate above-average rates of returns over time. The Investment Management Team seeks to identify companies across a range of industries and market sectors that have leading and sustainable market share positions, above-average financial strength, and are trading at a discount to their internal view of intrinsic value. The Investment Management Team may sell an investment when it believes it has surpassed its intrinsic value by applying the screening process described above, for purposes of portfolio construction or risk management, or when a more attractive investment opportunity becomes available. The total firm assets will be defined as all discretionary and non-discretionary assets under management within Nuance. This includes primary investment management accounts and sub-advisory investment management accounts as well as both fee-paying and non-fee paying assets.


Our core offerings are the Nuance Mid Cap Value strategy, the Nuance Concentrated Value strategy and the Nuance Concentrated Value Long-Short strategy. Their complete descriptions are defined below:

  The Nuance Mid Cap Value Composite consists of separately managed accounts (portfolios) in the Mid Cap Value strategy. Nuance Mid Cap Value seeks to achieve long-term capital appreciation by investing primarily in equity securities (including common stocks, preferred stocks and convertible securities) of companies organized in the United States that the Investment Management Team believes are high quality, though temporarily out of favor. The market capitalization of at least 80 percent of the portfolio will be maintained in companies with market capitalizations between the smallest and largest members of the Russell Mid Cap Index (defined using a trailing 12 month average of the smallest and largest members on a month to month basis). The weighted average market capitalization will also be maintained between the smallest and largest members of the Russell Midcap® Index. The Investment Management Team will invest primarily in the equity securities of U.S. companies; however the portfolio may invest up to 15% of its assets in equity securities of foreign companies  in countries classified as “developed” by MSCI. Nuance utilizes MSCI to classify its international holdings. The country classification of a company is generally determined by the company’s country of incorporation and the primary listing of its securities. MSCI will classify a company in the country of incorporation if its securities have a primary listing in this country. In such cases where a company’s securities have a primary listing outside of the country of incorporation, an additional analysis is performed to determine the company’s country classification.  25 percent of the portfolio assets will generally   not have positions of greater than 5 percent. Cash will generally not be greater than 10 percent of the market value of the portfolio. Each security position will not be greater than 7.5 percent of the market value of the portfolio. Each portfolio will not exceed a 25 percent weighting in one industry as defined by Global Industry Classification Standards (GICS®). A typical portfolio will hold between 50 and 100 securities. There is no minimum separate account asset level necessary for inclusion in the composite.

Benchmark: For comparison purposes, the composite is measured against the Russell Midcap® Value Index as the primary index. The Russell Midcap® Value Index measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap® Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap® Value Index is constructed to provide a comprehensive and unbiased barometer of the mid-cap value market. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap value market. Secondary indices are the S&P MidCap 400 Value Index and the S&P 500 Index. The composite was created on November 3, 2008.

The Nuance Concentrated Value Composite consists of separately managed accounts (portfolios) in the Concentrated Value strategy. Nuance Concentrated Value seeks to achieve long-term capital appreciation by investing primarily in equity securities (including common stocks, preferred stocks and convertible securities) of companies organized in the United States that the Investment Management Team believes are high quality, though temporarily out of favor. The Investment Management Team will invest primarily in the equity securities of U.S. companies; however the portfolio may invest up to 25% of its assets in equity securities of foreign companies in countries classified as “developed” by MSCI. Nuance utilizes MSCI to classify its international holdings. The country classification of a company is generally determined by the company’s country of incorporation and the primary listing of its securities. MSCI will classify a company in the country of incorporation if its securities have a primary listing in this country. In such cases where a company’s securities have a primary listing outside of the country of incorporation, an additional analysis is performed to determine the company’s country classification.  Cash will generally not be greater than 25 percent of the market value of the portfolio. 50 percent of the portfolio assets will generally not have positions of greater than 5 percent. Each security position will generally not be greater than 15 percent of the market value of the portfolio. Each portfolio will not exceed a 25 percent weighting in one industry as defined by Global Industry Classification Standards (GICS®). A typical portfolio will hold between 15 and 35 securities. There is no minimum separate account asset level necessary for inclusion in the composite.

Benchmark: For comparison purposes, the composite is measured against Russell 3000® Value Index as a primary index. The Russell 3000® Value Index measures the performance of the broad value segment of the U.S. equity universe. It includes those Russell 3000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 3000® Value Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad value market. The Index is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics. Secondary index is the S&P 500 Index TR. The composite was created on November 13, 2008. It should be noted that the Russell Midcap® Value Index was considered the primary index until June 30, 2010. Beginning July 1, 2010 the primary index is considered the Russell 3000® Value Index. The change in index was due to further study surrounding the market for all-cap strategies and the appropriate index for these strategies

The Nuance Concentrated Value Long-Short Composite is a single-portfolio composite in the Concentrated Value Long-Short strategy. Nuance Concentrated Value Long-Short seeks to achieve long-term capital appreciation by investing primarily in equity securities (including common stocks, preferred stocks and convertible securities) of companies organized in the United States that the Investment Management Team believes are high quality, though temporarily out of favor and through short investments in U.S. equity securities with below average competitive positions and unattractive risk reward profiles. The Investment Management Team will invest primarily in the equity securities of U.S. companies; however the portfolio may invest up to 25% of its assets in equity securities of foreign companies  in countries classified as “developed” by MSCI. Nuance utilizes MSCI to classify its international holdings. The country classification of a company is generally determined by the company’s country of incorporation and the primary listing of its securities. MSCI will classify a company in the country of incorporation if its securities have a primary listing in this country. In such cases where a company’s securities have a primary listing outside of the country of incorporation, an additional analysis is performed to determine the company’s country classification.  Cash will generally not be greater than 25 percent of the market value of the portfolio. 50 percent of the portfolio assets will generally not have positions of greater than 5 percent. Each long security position will generally not be greater than 15 percent of the market value of the portfolio. Each short security position will not be greater than 5 percent of the net market value of the portfolio. Each portfolio will generally not exceed a 25 percent weighting in one industry as defined by Global Industry Classification Standards (GICS®). A typical portfolio on the long side will hold between 15 and 35 securities and 0-50 securities on the short side. Maximum gross exposure will be 200% of total assets. Maximum net exposure will be 100% of total assets and minimum net exposure will be -25% of total assets. There is no minimum separate account asset level necessary for inclusion in the composite. 

Benchmark: For comparison purposes, the composite is measured against S&P 500 Index as a primary index. The S&P 500 Index measures the performance of the large cap segment of the U.S. equity universe. The index captures approximately 80% of the available market capitalization. S&P 500 Index is constructed to provide a comprehensive, unbiased, and stable barometer of the large-cap US Equity market. The Index is rebalanced quarterly. The composite was created on December 31, 2015. 

Dispersion is calculated from gross of fee returns using an asset-weighted standard deviation methodology. Only those accounts included for the full calculation period are part of the dispersion calculation. The 3-year Ex-post annualized standard deviation value is calculated using 36 consecutive monthly gross of fee returns to the end calculation period. Since Inception, Nuance has adopted the following Significant Cash Flow Policy for the Nuance Concentrated Value and Nuance Mid Cap Value composites. An account will be removed from a composite if a client has given specific instructions that prevent full investment of the cash flow(s) in a timely manner (defined as 5 business days or greater), or cumulative cash flow(s) are equal or greater than 3 percent of the total composite market value based on the end of month market value, or if cumulative cash flow(s) are equal or greater than 10 percent of the total account value based on the end of month market value. If these circumstances exist, the account will be removed from the composite and added back to the composite on the first day of the month following the date that the account is fully invested (defined as being within ten percent of the model portfolios cash target). The Nuance Concentrated Value Long-Short composite has no significant cash flow policy. 

Discretion is the ability of the firm (Nuance) to implement its intended strategy.   If documented client-imposed restrictions significantly hinder the firm from fully implementing its intended strategy the portfolio will be considered non-discretionary and will not be included in the firm’s discretionary composites.

More information regarding Composite descriptions and policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request by contacting client.services@nuanceinvestments.com or 816-743-7080. 


Fees and Related

The full fee schedule for all Nuance products is available upon request. It should be noted that the collection of fees produces a compounding effect on the total rate of return net of management fees.  Nuance Mid Cap Value charges .85% for clients with assets under $25 million, .80% for clients with assets under management between $25-50 million, .75% for clients with assets under management between $50-75 million, .70% for clients with assets under management between $75-$100 million, and .65% for clients with assets greater than $100 million. Nuance Concentrated Value charges .95% for clients with assets under $25 million, .90% for clients with assets under management between $25-50 million, .85% for clients with assets under management between $50-75 million, .80% for clients with assets under management between $75-$100 million, and .75% for clients with assets greater than $100 million. The Nuance Concentrated Value Long-Short strategy charges 1.00% management fee. Incentive fee structures and performance-based fee structures may be available for qualified clients and are negotiated individually. Nuance reserves the right to modify fee structures on an account by account basis at its discretion.

Gross of fee performance returns for the aforementioned composites are presented before management fees but after all trading expenses. No other fees or expenses are deducted for gross of fee performance. Pure gross performance may be presented for any wrap composites. Net of fee performance returns are presented after actual standard management fees, actual performance-based management fees and all trading expenses. No other fees are deducted aside from trading and management fees for the calculation of net of fee performance. Net of fee performance for wrap composites is presented using the application of a maximum model fee of 1.75%. Valuations are net of all applicable withholding taxes. Portfolios are valued in accordance with GIPS® Valuation Principles. More information regarding standard investment management fees and the calculation of performance-based investment management fees is available upon request.


Additional Notes and Disclosures

The use of derivatives may be employed for purposes of currency hedging and or to equitize the cash position of the portfolios. Past performance is not indicative of future results.

On 06/01/2010, the firm changed its name to Nuance Investments, LLC. Prior to 06/01/2010 the firm name was Mariner Value Strategies, LLC.

To obtain additional information about the valuation of portfolios, calculation of performance and preparation of compliant presentations please contact Client Services at Client.Services@nuanceinvestments.com or 816.743.7080.

Nuance Investments, LLC

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