Morningstar Analyst Rating 06-27-13

Morningstar Pillars
Process
Performance
People
Parent
Price
Positive
Positive
Positive
Positive
Neutral
Morningstar Analyst Rating
Morningstar evaluates mutual funds based on five key pillars, which
its analysts believe lead to funds that are more likely to outperform
over the long term on a risk-adjusted basis.
Analyst RatingSpectrum

Pillar Spectrum
Positive Negative Neutral
NAV 74.31 74.11 50.59 43.78 43.73 35.84 24.62 35.73 32.60 31.24 29.80 29.73
Total Return % 0.27 48.98 17.47 0.11 22.56 45.57 -30.14 21.17 15.67 4.83 0.24 41.71
+/-S&P 500 -0.69 16.59 1.47 -2.00 7.50 19.11 6.86 15.68 -0.12 -0.08 -10.64 13.03
+/-Russ 2000 Gr -2.75 5.68 2.88 3.02 -6.53 11.10 8.40 14.12 2.32 0.68 -14.07 -6.83
Income Return % 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Capital Return % 0.27 48.98 17.47 0.11 22.56 45.57 -30.14 21.17 15.67 4.83 0.24 41.71
Total Rtn % Rank Cat 78 10 11 22 79 16 3 7 16 60 95 60
Income $ 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Capital Gains $ 0.00 1.20 0.81 0.00 0.19 0.00 0.33 3.77 3.58 0.00 0.00 0.00
Expense Ratio %
.
1.27 1.21 1.19 1.21 1.24 1.22 1.20 1.19 1.18 1.18 1.23
Income Ratio %
.
-0.13 -0.68 -0.68 -0.63 -0.64 -0.77 -0.77 -0.97 -0.95 -1.03 -1.05
Turnover Rate %
.
15 21 7 13 8 20 14 10 11
.
1
Net Assets $mil 2,365 2,353 1,378 1,351 991 681 321 337 347 373 647 719
Performance 02-28-14
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total
2009
2010
2011
2012
2013
-3.70 20.12 18.86 5.88 45.57
1.70 -8.07 12.86 16.14 22.56
9.49 3.07 -19.01 9.53 0.11
12.65 -2.76 4.61 2.51 17.47
14.45 0.95 19.50 7.90 48.98
Trailing Total +/- +/- Russ %Rank Growth of
Return% S&P 500 2000 Gr Cat $10,000
3 Mo
6 Mo
1 Yr
3 Yr Avg
5 Yr Avg
10 Yr Avg
15 Yr Avg
1.92 -1.59 -3.21 82 10,192
18.10 3.03 -1.10 46 11,810
35.75 10.38 -1.31 44 13,575
19.83 5.48 3.85 4 17,207
28.94 5.94 0.89 24 35,640
12.10 4.94 2.91 4 31,337
12.05 7.37 4.99 8 55,103
Tax Analysis Tax-Adj Rtn% %Rank Cat Tax-Cost Rat %Rank Cat
3 Yr (estimated)
5 Yr (estimated)
10 Yr (estimated)
19.56 2 0.23 20
28.75 16 0.15 18
11.66 2 0.39 18
Potential Capital Gain Exposure: 49% of assets
Rating and Risk
Time Load-Adj Morningstar Morningstar Morningstar
Period Return % Rtn vs Cat Risk vs Cat Risk-Adj Rating
1 Yr 35.75
3 Yr 19.83 High Avg
5 Yr 28.94 +Avg -Avg
10 Yr 12.10 High Avg
Incept 12.69
Other Measures Standard Index Best Fit Index
S&P 500 Mstar Small Growth
Alpha 4.2 4.6
Beta 1.08 0.96
R-Squared 65 87
Standard Deviation 16.60
Mean 19.83
Sharpe Ratio 1.17
Morningstars Take by Janet Yang, CFA 06-27-13
For Brown Capital Management Small Company,
staying the course hardly equates with complacency.
This funds most recent 15% turnover rate is among
the lowest within the actively managed small-growth
universe. More so, of the six companies that exited the
portfolio in 2012, all six did so as a result of being
acquired by others; absent those corporate actions,
turnover here might have been even lower.
Investors shouldnt mistake a dearth of trading
activity with lack of engagement or deliberation,
though. Instead, it reflects the long-term conviction
gained through the teams rigorous fundamental
research. The team focuses its sights on companies
with unique and defensible business models, and
preferably ones that address customers pain points.
For instance, one of the funds newest holdings, Vocera
Communications VCRA, provides a patented hands-free
device that allows doctors and nurses to communicate
more quickly and efficiently with one another; it even
decreases the mileage that its hospital users have to
walk each day.
Focusing on companies that dominate their small
market niches generally results in a higher-quality
portfolio, but the funds holdings still arent immune to
the volatility that often comes with investing in the
smaller-cap area of the market. After initiating the
Vocera position in February 2013, for example, the
stock promptly lost 44% over the subsequent three
months. The teams research showed that much of the
slowdown in sales that prompted the sell-off was due
to sales being pushed into the following quarter, and
the team took the price decline as an opportunity to
add to its position.
Avoiding the markets myopia has allowed this fund
to outpace the vast majority of its small-growth peers
over the past three-, five-, 10-, and 15-year periods. It
has done so at levels of risk, as measured by standard
deviation, that are generally in line with peers, leading
to excellent risk-adjusted results. For investors who
share the teams patience, this fund remains a
first-rate choice.
Address: 116 SOUTH FRANKLIN STREET
ROCKY MOUNT, NC 27802
877-892-4226
Web Address: www.browncapital.com
Inception: 07-23-92
Advisor: Brown Capital Management, LLC
Subadvisor: None
NTF Plans: Fidelity Instl-NTF, Vanguard NTF
Minimum Purchase: Closed Add:
.
IRA:
.
Min Auto Inv Plan: Closed Add:
.
Sales Fees: No-load,
Management Fee: 1.00%
Actual Fees: Mgt:1.00% Dist:0.20%
Expense Projections: 3Yr:$406 5Yr:$702 10Yr:$1543
Income Distribution: None
Data through February 28, 2014
Brown Capital Mgmt Small Co Inv
Ticker Status Yield Total Assets Mstar Category
BCSIX Closed 0.0% $2,917 mil Small Growth
99% 96% 95% 93% 94% 91% 95% 96% 95%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 02-14
Historical Profile
Return
Risk
Rating
High
Average
Highest
Investment Style
Equity
Stock %
Manager Change
Partial Manager Change
Growth of $10,000
Investment Values of
Fund
Investment Values of
S&P 500
Performance Quartile
(within Category)
History
10.0
17.0
24.0
31.0
40.8
Portfolio Analysis 01-31-14
Share change since 12-13 Total Stocks:39 Sector PE Tot Ret% % Assets
Fidelity Instl MM Fds Mo
. . .
5.07
Manhattan Associates, In Technology 43.9 29.01 4.38
Tyler Technologies, Inc. Technology 82.6 -8.18 4.29
Medidata Solutions, Inc. Technology
.
5.95 4.23
NetScout Systems, Inc. Technology 34.0 28.35 4.14
Incyte Corp Ltd Hlth care
.
26.92 4.09
Cognex Corporation Technology 45.5 -1.36 4.03
FEI Company Technology 34.4 15.01 3.75
Concur Technologies, Inc Technology
.
19.65 3.44
ACI Worldwide, Inc. Technology 39.2 -7.65 3.43
Neogen Corporation Hlth care 57.8 -5.21 3.35
Cantel Medical Corporati Hlth care 32.1 -4.47 3.32
NIC, Inc. Technology 36.6 -21.83 3.25
Ansys, Inc. Technology 32.4 -4.22 3.20
Techne Corporation Hlth care 28.8 -5.83 3.17
Blackbaud, Inc. Technology 46.7 -16.49 3.04
Balchem Corporation Basic Mat 34.7 -13.95 3.02
Carbo Ceramics, Inc. Energy 33.6 6.71 2.96
Hittite Microwave Corpor Technology 26.2 -4.21 2.95
Sun Hydraulics Corp Industrl 30.5 3.60 2.81
Current Investment Style
Market Cap %
Giant 0.0
Large 0.0
Mid 36.5
Small 44.1
Micro 19.5
Avg $mil:
2,079
Value Blnd Growth
L
a
r
g
e
M
i
d
S
m
a
l
l
Value Measures Rel Category
Price/Earnings
Price/Book
Price/Sales
Price/Cash Flow
Dividend Yield %
33.26
4.03
4.12
20.02
0.39
1.58
1.64
2.96
2.13
0.57
Growth Measures % Rel Category
Long-Term Erngs
Book Value
Sales
Cash Flow
Historical Erngs
13.21
10.09
10.32
10.77
11.24
0.83
1.35
2.18
0.77
1.24
Profitability % Rel Category
Return on Equity
Return on Assets
Net Margin
13.70
8.78
11.24
1.18
2.03
1.64
Sector
Weightings
% of
Stocks
Rel
S&P 500 High
3 Year
Low
Cyclical 4.40 0.15
BasicMat 3.18 1.04 3 2
CnsmrCyc 1.22 0.14 3 1
FinanSvs 0.00 0.00
. .
Real Est 0.00 0.00
. .
Sensitive 74.46 1.71
CommSrvs 0.00 0.00
. .
Energy 3.11 0.29 4 2
Industrl 5.56 0.49 8 5
Technlgy 65.79 3.75 68 60
Defensive21.14 0.77
CnsmrDef 0.00 0.00 3 2
Hlthcare 21.14 1.79 24 19
Utilities 0.00 0.00
. .
h
r
t
y
u
j
i
o
p
a
k
s
d
f
Composition - Net
(% of Stock)
Cash 5.1
Stocks 94.9
Bonds 0.0
Other 0.0
Foreign 0.0
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