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Waddell & Reed Advisors New Concepts Fund

  • $12.66 NAV as of 10/18/2017
  • ($-0.01) / -0.08% Daily NAV Change
  • 19.66% YTD (NAV)

Summary

Finding opportunity in the middle

Strategic process
Buys mid-cap companies with large-cap potential that demonstrate profitability, balance-sheet strength and sustainable earnings growth. It strives for consistency in an inconsistent market environment.
Experienced management
Managed by an investment professional with 25+ years of experience who uses bottom-up stock selection and fundamental valuation with top-down macroeconomic analysis to find growth at a reasonable price.
The difference
Seeks companies that emphasize profitability, durable financials and effective management teams that are visionary, honest and shareholder driven.

Morningstar Style Box

Growth
Medium
Source: Morningstar

Portfolio Management

Kimberly A. Scott, CFA

  • Waddell & Reed Investment Management Company
  • 16 Years with Fund
  • 30 Years in Industry
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Kim Scott is co-portfolio manager of the mid cap growth product suite of mutual funds and institutional accounts. She assumed co- portfolio manager responsibilities for the product suite in 2016. She has been portfolio manager of Ivy Mid Cap Growth Fund and Waddell & Reed Advisors New Concepts Fund since 2001, and of Ivy VIP Mid Cap Growth since 2005. She is co-portfolio manager of Ivy Mid Cap Income Opportunities Fund since its inception in 2014. Ms. Scott joined Waddell & Reed in 1999 as an equity investment analyst. She was appointed assistant vice president in 2000. She was appointed vice president in 2001 and senior vice president in 2004. Prior to joining Waddell & Reed, Ms. Scott served in various levels of research positions throughout her career affiliated with the following companies: Bartlett & Company, NBD Bank, Johnson Investment Counsel, Inc. and the University of Cincinnati Medical Center. Her primary responsibilities included fundamental analysis of companies and equities for mutual funds, separate accounts, and personal trusts. Through this experience, Ms. Scott provided sector coverage for consumer non-durables, technology, retail, food and beverage, and tobacco. Ms. Scott graduated from the University of Kansas in 1982 with a BS in Microbiology. She earned an MBA in Finance from the University of Cincinnati in 1987. Ms. Scott is a CFA charterholder. She is a member of the CFA Institute and the CFA Society of Kansas City.

Nathan A. Brown, CFA

  • Waddell & Reed Investment Management Company
  • 1 Year with Fund
  • 18 Years in Industry
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Nathan Brown is co-portfolio manager of the mid cap growth product suite of mutual funds and institutional accounts. He was named co-portfolio manager of the product suite in 2016. He had been assistant portfolio manager of Ivy Mid Cap Growth Fund, Ivy VIP Mid Cap Growth and Waddell & Reed Advisors New Concepts Fund since 2011. He is co-portfolio manager of Ivy Mid Cap Income Opportunities Fund since its inception in 2014. Mr. Brown joined Waddell & Reed in 2003 as an equity investment analyst. He was appointed assistant vice president in 2010 and vice president in 2014. Prior to joining Waddell & Reed, Mr. Brown interned with Morgan Keegan. From 1999 to 2001 he completed five rotations at General Electric-Aircraft Engine's financial management program. In 1999 he was a securities analyst for Krause Fund, where his responsibilities were concentrated in the utilities sector. Mr. Brown graduated with honors from the University of Iowa, Henry B. Tippie School of Business in 1999 with a BBA in Finance. He earned an MBA with an emphasis in Finance and Accounting from Vanderbilt University, Owen Graduate School of Management in 2003. Mr. Brown is a CFA charterholder. He is a member of the CFA Institute and the CFA Society of Kansas City.

Growth of a $10,000 Investment
through 9/30/2017

Assumes an investment over 10 years or life of the share class, reinvestment of dividends and capital gains, and does not include the effect of sales charges or taxes.

Documents

Perspectives

Quarterly Fund Commentary

Daily Prices as of 10/18/2017

Net Asset Value (NAV) $12.66
Daily NAV Change ($) ($-0.01) -0.08%
Weekly NAV Change ($) $-0.07 -0.55%
Public Offering Price (POP) $12.66

Fund Facts

Ticker Symbol UNEYX
CUSIP 930057583
Fund Code 748
Fund Type Domestic Equity
Fund Inception 6/9/1983
Class Inception 9/6/1995
Fiscal Year End June
Dividends Paid December
Fund Assets (as of 9/30/2017) $1.7 bil
Total Equity Holdings (as of 9/30/2017) 63
Total Holdings (as of 9/30/2017) 68
Portfolio Turnover Rate (as of 6/30/2017) 26%
Lipper Category Mid-Cap Growth Funds
Morningstar Category Mid-Cap Growth
Benchmark Russell Mid Cap Growth TR USD

Performance

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Class Y shares are not subject to sales charges.

Monthly Rates of Return

Average Annual Total Returns as of 9/30/2017
(Returns for periods of less than 1-yr are not annualized)
 
Russell Mid Cap Growth TR USD 17.28% 17.82% 9.96% 14.18% 8.20% 9.12%
Lipper Mid-Cap Growth Funds 17.65% 18.42% 9.24% 12.78% 6.90% 8.68%
Fund at NAV 18.71% 18.44% 8.21% 11.64% 8.98% 9.72%

Quarterly Rates of Return

Average Annual Total Returns as of 9/30/2017
(Returns for periods of less than 1-yr are not annualized)
 
Russell Mid Cap Growth TR USD 17.28% 17.82% 9.96% 14.18% 8.20% 9.12%
Lipper Mid-Cap Growth Funds 17.65% 18.42% 9.24% 12.78% 6.90% 8.68%
Fund at NAV 18.71% 18.44% 8.21% 11.64% 8.98% 9.72%

Calendar Year Return

  2012
Class Y 13.03 30.88 8.16 -5.70 6.38
Russell Mid Cap Growth TR USD 15.81 35.74 11.90 -0.20 7.33

Morningstar Ratings as of 9/30/2017 Morningstar Logo

Category: Mid-Cap Growth
Ratings are based on risk-adjusted returns
Overall out of 563
3 Year out of 563
5 Year out of 484
10 Year out of 362

Lipper Ranking through 9/30/2017 Lipper Logo

Category: Mid-Cap Growth Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 179/376 48
3 Year 250/356 71
5 Year 210/309 68
10 Year 22/225 10

Expense Ratios as of 10/31/2016

Net 1.03%
Gross 1.03%

5-Year Standard Deviation as of 9/30/2017

Russell Mid Cap Growth TR USD 10.88

5-Year MPT* Statistics as of 9/30/2017

*Modern Portfolio Theory
Alpha -1.91
Beta 0.98
R-Squared 91.12
Sharpe Ratio 1.03
Capture Ratio Upside: 90.66%
Downside: 101.93%

Distributions

Historical Prices Inception 9/6/1995

10/2/2017 $12.65 NO NO
10/3/2017 $12.68 NO NO
10/4/2017 $12.70 NO NO
10/5/2017 $12.75 NO NO
10/6/2017 $12.75 NO NO
10/9/2017 $12.70 NO NO
10/10/2017 $12.71 NO NO
10/11/2017 $12.73 NO NO
10/12/2017 $12.72 NO NO
10/13/2017 $12.70 NO NO
10/16/2017 $12.68 NO NO
10/17/2017 $12.67 NO NO

Historical Distributions Inception 9/6/1995

12/8/2016 $0 Long: $0.335 Short: $0.000 $10.92 12/8/2016
12/10/2015 $0 Long: $0.955 Short: $0.139 $10.25 12/10/2015
12/11/2014 $0 Long: $1.557 Short: $0.094 $11.79 12/11/2014
12/12/2013 $0 Long: $1.094 Short: $0.148 $12.14 12/12/2013
12/13/2012 $0 Long: $0.412 Short: $0.000 $10.48 12/13/2012

*Special Dividend
The table includes the daily prices at NAV (net asset value) for the history of this fund's selected share class. NAV is the amount per share you would receive if you sold shares that day.

Portfolio

Top 10 Equity Holdings as a % of net assets 9/30/2017

Intuitive Surgical, Inc. Intuitive Surgical, Inc. designs, manufactures, and markets da Vinci surgical systems, and related instruments and accessories. 3.75%
Zoetis, Inc. Zoetis Inc. engages in the discovery, development, manufacture, and commercialization of animal health medicines and vaccines for livestock and companion animals worldwide 3.43%
Fastenal Co. Fastenal Company operates as a wholesaler and retailer of industrial and construction supplies. 3.27%
Electronic Arts, Inc. Electronic Arts Inc. develops, markets, publishes, and distributes game software content and services for video game consoles, personal computers, mobile phones, and tablets. 2.87%
CoStar Group, Inc. CoStar Group, Inc. provides information, analytics, and online marketplaces services to the commercial real estate industry in the U.S., Canada, the U.K., and France.  2.85%
Polaris Industries, Inc. Polaris Industries Inc. designs, engineers, and manufactures off-road and on-road vehicles. The Company produces vehicles including snowmobiles, terrain vehicles, and motorcycles. Polaris Industries markets its products and related replacement parts and accessories through dealers and distributors located in the United States, Canada, and Europe. 2.66%
CME Group, Inc. CME Group Inc., a U.S. company, is the world's leading and most diverse derivatives marketplace. It owns and operates large derivatives and futures exchanges in Chicago and New York, as well as online trading platforms.  2.49%
BorgWarner, Inc. BorgWarner Inc. is a global supplier of engineered automotive systems and components, primarily for powertrain applications. 2.49%
Tractor Supply Co. Tractor Supply Company operates a retail farm store chain in the United States. The company provides farm maintenance products, animal products, general maintenance products, lawn and garden products, light truck equipment, work clothing, and other products. 2.45%
GrubHub, Inc. 2.36%

Total Portfolio Holdings

Updated quarterly, upon availability.

Market Capitalization
as a % of equity assets as of 9/30/2017

Large 53.2%
Medium 44.6%
Small 2.2%
Median Market Cap (as of 9/30/2017) $8.8 bil

Top 10 Industry Allocation
as a % of Equity Holdings as of 9/30/2017

Internet Software & Services 8.7%
Health Care Equipment 6.5%
Pharmaceuticals 5.1%
Specialty Stores 4.8%
Packaged Foods & Meats 4.5%
Systems Software 4.4%
Building Products 4.2%
Apparel, Accessories & Luxury Goods 3.5%
Financial Exchanges & Data 3.4%
Trading Companies & Distributors 3.3%

Sector Allocation
as a % of equity assets as of 9/30/2017

Information Technology 28.56%
Consumer Discretionary 19.53%
Health Care 17.75%
Industrials 15.59%
Financials 8.56%
Consumer Staples 5.49%
Energy 2.34%
Materials 2.18%

Portfolio Composition
as a % of net assets as of 9/30/2017

Domestic Common Stock 95.71%
Foreign Common Stock 3.69%
Cash and Cash Equivalents 0.45%
Other Financial Instruments 0.15%

Equity Country Allocation
as a % of equity assets as of 9/30/2017

United States 95.0%
United Kingdom 2.7%
Brazil 2.3%

Total Portfolio Holdings

Updated quarterly, upon availability.

Data quoted is past performance and current performance may be lower or higher. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

Risk Factors: The value of the Fund’s shares will change, and you could lose money on your investment. Investing in mid-cap stocks may carry more risk than investing in stocks of larger more well-established companies. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Not all funds or fund classes may be offered at all broker/dealers. These and other risks are more fully described in the Fund’s prospectus.

Index Description: Russell Midcap Growth is an unmanaged index comprised of securities that represent the mid-cap sector of the stock market. It is not possible to invest directly in an index.

Performance results for some funds may include the effect of expense reduction arrangements. If those arrangements had not been in place, the performance results would have been lower.

Effective Oct. 1, 2016 Nathan Brown was named a co-portfolio manager for the Waddell & Reed New Concepts Fund.

Fee Waiver and/or Expense Reimbursement: Through October 31, 2017, Waddell & Reed Investment Management Company (WRIMCO), the Fund’s investment manager, Waddell & Reed, Inc. (Waddell & Reed), the Fund’s distributor, and / or Waddell & Reed Services Company, doing business as WI Services Company (WISC), the Fund’s transfer agent, have contractually agreed to reimburse sufficient management fees, 12b-1 fees and / or shareholder servicing fees to cap the total annual ordinary fund operating expenses as follows: Class A shares at 1.33%, Class B shares at 2.53%, Class C shares at 2.34%, Class Y at 1.04%. Prior to that date, the expense limitation may not be terminated by WRIMCO, Waddell & Reed, WISC or the Board of Trustees.

Pricing: All prices and year-to-date returns are based on closing quotes unless noted, as supplied to the NASDAQ by 6:00 p.m. Eastern time. YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

Style Analysis: The Morningstar Style Box reveals a fund's investment style. For equity funds the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth). For fixed-income funds, the vertical axis shows the credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond's effective duration. Morningstar seeks credit rating information from fund companies on a periodic basis (e.g., quarterly). In compiling credit rating information, Morningstar instructs fund companies to only use ratings that have been assigned by the following Nationally Recognized Statistical Rating Organizations (NRSROs): Moody's, Standard & Poor's, Fitch, and Egan-Jones. If two NRSROs have rated a security, fund companies are to report the lowest rating; if three or more NRSROs have rated the same security differently, fund companies are to report the rating that is in the middle. For example, if NRSRO X rates a security AA-, NRSRO Y rates the same security an A and NRSRO Z rates it a BBB+, the fund company should use the credit rating of 'A' in its reporting to Morningstar. PLEASE NOTE: Morningstar, Inc. is not itself an NRSRO nor does it issue a credit rating on the fund. An NRSRO rating on a fixed-income security can change from time-to-time. For credit quality, Morningstar combines the credit rating information provided by the fund companies with an average default rate calculation to come up with a weighted-average credit quality. The weighted-average credit quality is currently a letter that roughly corresponds to the scale used by a leading NRSRO. Bond funds are assigned a style box placement of "low", "medium", or "high" based on their average credit quality. Funds with a low credit quality are those whose weighted-average credit quality is determined to be less than "BBB-"; medium are those less than "AA-", but greater or equal to "BBB-"; and high are those with a weighted-average credit quality of "AA-" or higher. When classifying a bond portfolio, Morningstar first maps the NRSRO credit ratings of the underlying holdings to their respective default rates (as determined by Morningstar's analysis of actual historical default rates). Morningstar then averages these default rates to determine the average default rate for the entire bond fund. Finally, Morningstar maps this average default rate to its corresponding credit rating along a convex curve. For interest-rate sensitivity, Morningstar obtains from fund companies the average effective duration. Generally, Morningstar classifies a fixed-income fund's interest-rate sensitivity based on the effective duration of the Morningstar Core Bond Index (MCBI), which is currently three years. The classification of Limited will be assigned to those funds whose average effective duration is between 25% to 75% of MCBI's average effective duration; funds whose average effective duration is between 75% to 125% of the MCBI will be classified as Moderate; and those that are at 125% or greater of the average effective duration of the MCBI will be classified as Extensive. For municipal bond funds, Morningstar also obtains from fund companies the average effective duration. In these cases static breakpoints are utilized. These breakpoints are as follows: (i) Limited: 4.5 years or less; (ii) Moderate: more than 4.5 years but less than 7 years; and (iii) Extensive: more than 7 years. In addition, for non-US taxable and non-US domiciled fixed income funds static duration breakpoints are used: (i) Limited: less than or equal to 3.5 years; (ii) Moderate: greater than 3.5 and less than equal to 6 years; (iii) Extensive: greater than 6 years.

Unsubsidized yields reflect what the yield would have been without the effect of reimbursements and waivers. The adviser and its affiliates have or may voluntarily waive a portion of their fees (including, but not limited to, distribution and service (12b-1) fees) and reimburse certain expenses. There is no guarantee that the fund will avoid a negative yield. Such undertaking may be amended or withdrawn at any time.

12-Month Trailing Distribution Yield: at NAV refers to the 12-month historical cash flow paid over the past 12 months in dividends, divided by the past months ending NAV.

Alpha, Beta, R-Squared, Standard Deviation, Sharpe Ratio and Capture Ratio are 5 year statistics. Alpha is a measure of a fund's actual returns and expected performance, given its level of risk (as measured by beta). Beta reflects the sensitivity of the fund's return to fluctuations in the market index. R-squared indicates how much of a fund's fluctuations were attributable to movements in the fund's benchmark. Standard deviation is a measure of how volatile a fund's returns are. Sharpe ratio is a measure of a fund's risk-adjusted performance. Capture ratio reflects the annualized product of fund vs. index returns for all months in which the index had a positive return (upside capture) or negative return (downside capture).

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, and does not include the effects of sales charges. 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.

© 2017 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (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. Past performance is no guarantee of future results.

Information is subject to change and is not intended to represent any past or future investment recommendations.

YTD Prices can be updated 3 to 4 hours after the Daily Pricing information which can result in mismatching data.

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