Shareholder Letter

January 19, 2018

Dear Shareholder,

During the fourth quarter of 2017, the Osterweis Fund (the Fund) generated a total return of 4.28% versus 6.64% for the S&P 500 Index (the S&P 500). While the Fund’s one-year absolute return of 14.43% has been strong, it trailed the benchmark’s return of 21.83%. This reflects our defensive portfolio positioning, as we want to avoid chasing performance in the late stages of this bull market. The Fund’s annualized total returns over the five year, ten year and twenty year periods ending December 31, 2017 were 9.69%, 6.07% and 9.46%, respectively, compared to 15.79%, 8.50% and 7.20% for the S&P 500 over the same periods.

Performance data quoted represent past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original investment. Current performance of the Fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling (866) 236 0050. An investment should not be made solely on returns. The Fund’s gross expense ratio was 1.18% and net expense ratio was 0.98% as of January 1, 2018. The Adviser has contractually agreed to waive fees through December 31, 2018. The net expense ratio is applicable to investors.

Sustained expansion in global economic activity — combined with low inflation, accommodative monetary policies and tax reform — continued to provide fertile ground for asset markets. The current U.S. equity market rally is now the third strongest and second longest since 1936. While it is impossible to predict how long this synchronized global expansion will continue, we believe it may have room to run in 2018 and beyond, albeit with less opportunity for upside growth surprises. So far, low inflation has been a key factor in supporting this extended cycle of growth in the U.S. In the attached Investment Outlook, we discuss the transformative role technology plays in allowing inflation to remain quiescent despite rising wages, tight labor markets and increasing food costs.

Our stock selection continues to focus on dominant companies with growing earnings and dividends, as well as unrecognized earnings acceleration. As we mentioned above, we don’t want to chase momentum stocks this late into a bull market.

We thank you for your continued confidence in our management.

Sincerely,

John Osterweis & Team

 

Enclosure

___________________________________

This commentary contains the current opinions of the author as of the date above, which are subject to change at any time. This commentary has been distributed for informational purposes only and is not a recommendation or offer of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed.

Mutual Fund investing involves risk. Principal loss is possible. The Fund may invest in medium and smaller sized companies, which involve additional risks such as limited liquidity and greater volatility. The Fund may invest in foreign and emerging market securities, which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks may increase for emerging markets. The Fund may invest in Master Limited Partnerships, which involve risk related to energy prices, demand and changes in tax code. The Fund may invest in debt securities that are un-rated or rated below investment grade. Lower-rated securities may present an increased possibility of default, price volatility or illiquidity compared to higher-rated securities. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities.

The S&P 500 Index is an unmanaged index that is widely regarded as the standard for measuring large-cap U.S. stock market performance. One cannot invest directly in an index.

The Osterweis Funds are available by prospectus only. The Funds’ investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectuses contain this and other important information about the Funds. You may obtain a summary or statutory prospectus by calling toll free at (866) 236-0050, or by visiting osterweis.com. Please read the prospectus carefully before investing to ensure the Fund is appropriate for your goals and risk tolerance.

Osterweis Capital Management is the adviser to the Osterweis Funds, which are distributed by Quasar Distributors, LLC. [30672]

Investment Team

Account Access

Email Update

This commentary contains the current opinions of the author as of the date above, which are subject to change at any time. This commentary has been distributed for informational purposes only and is not a recommendation or offer of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable, but is not guaranteed.

The S&P 500 Index is an unmanaged index that is widely regarded as the standard for measuring large-cap U.S. stock market performance. The index does not incur expenses, is not available for investment, and includes the reinvestment of dividends.

Fund holdings are subject to change and should not be considered a recommendation to buy or sell any security.

Free cash flow represents the cash that a company is able to generate after laying out the money required to maintain and expand the company’s asset base. Free cash flow is important because it allows a company to pursue opportunities that enhance shareholder value.

The Osterweis Funds are available by prospectus only. The Funds’ investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectuses contain this and other important information about the Funds. You may obtain a summary or statutory prospectus by calling toll free at (866) 236-0050, or by visiting www.osterweis.com/statpro. Please read the prospectus carefully before investing to ensure the Fund is appropriate for your goals and risk tolerance.

Mutual fund investing involves risk. Principal loss is possible.

The Osterweis Fund may invest in medium and smaller sized companies, which involve additional risks such as limited liquidity and greater volatility. The Fund may invest in foreign and emerging market securities, which involve greater volatility and political, economic and currency risks and differences in accounting methods. These risks may increase for emerging markets. The Fund may invest in Master Limited Partnerships, which involve risk related to energy prices, demand and changes in tax code. The Fund may invest in debt securities that are un-rated or rated below investment grade. Lower-rated securities may present an increased possibility of default, price volatility or illiquidity compared to higher-rated securities. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities.

While the fund is no-load, management fees and other expenses still apply. Please refer to the prospectus for more information.

Osterweis Capital Management is the adviser to the Osterweis Funds, which are distributed by Quasar Distributors, LLC.

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