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Waddell & Reed Advisors Small Cap Fund

  • $11.94 NAV as of 4/27/2017
  • ($0.02) / 0.17% Daily NAV Change
  • 8.74% YTD (NAV)

Summary

Seeking small companies with large-cap opportunities

Sound philosophy
Seeks small-cap growth companies that are industry leaders, serving markets that are growing substantially and producing solid financial returns.
Experience & vision
Managed by an investment professional with more than 30 years of industry experience including roles as chief investment officer and head of growth funds group at a major investment firm.
Consistent process
Manager’s expertise is coupled with additional resources that have been associated with the firm’s small-cap growth products since 2003.

Morningstar Style Box

Growth
Small
Source: Morningstar

Portfolio Management

Timothy J. Miller, CFA

  • Waddell & Reed Investment Management Company
  • 7 Years with Fund
  • 38 Years in Industry
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Timothy J. Miller has been portfolio manager of Ivy Small Cap Growth Fund and Waddell & Reed Advisors Small Cap Fund since April 2010. Mr. Miller joined Ivy Investment Management Co. and Waddell & Reed Investment Management Company in February 2008. He managed the Ivy Small Cap Value Fund and Ivy Funds VIP Small Cap Value from 2008 through March 2010. Previously, he served as the primary portfolio manager of the Invesco Dynamics Fund from December 1993 through mid-2004, as the chief investment officer of Invesco Funds Group, Inc. from July 2000 until July 2003, and as the chief investment officer of the Denver Investment Center of Invesco North America from July 2003 until May 2004. Mr. Miller holds an MBA from the University of Missouri-St. Louis and a BSBA from Saint Louis University. He is a CFA Charter holder.

Kenneth G. McQuade

  • Waddell & Reed Investment Management Company
  • 1 Year with Fund
  • 21 Years in Industry
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Ken McQuade is a senior vice president of Ivy Investment Management Company and Waddell & Reed Investment Management Company. Mr. McQuade joined the firm in August 1997. He is currently a portfolio manager on the firm’s small-cap growth product line, which includes Ivy Small Cap Growth Fund, WRA Small Cap Fund, Ivy Funds VIP Small Cap Growth and institutional accounts. Prior to joining the firm, he was affiliated with A.G. Edwards & Sons. Mr. McQuade earned a BS degree in finance from Bradley University in 1992.

Bradley P. Halverson, CFA

  • Waddell & Reed Investment Management Company
  • 1 Year with Fund
  • 15 Years in Industry
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Bradley P. Halverson is a vice president of Ivy Investment Management Company and Waddell & Reed Investment Management Company. Mr. Halverson joined the firm in 2008 as an investment analyst on the small-cap growth team. He is currently a portfolio manager on the firm’s small-cap growth product line, which includes Ivy Small Cap Growth Fund, WRA Small Cap Fund, Ivy Funds VIP Small Cap Growth and institutional accounts. Prior to joining the company, Mr. Halverson was associated with Northpointe Capital, A.G. Edwards & Sons, Inc. and PricewaterhouseCoopers, LLP. He graduated from Brigham Young University in 1995 with a BS and MS in accounting. He earned an MBA from the University of Michigan in 2002 with an emphasis in finance and corporate strategy. He is a CFA charterholder.

Growth of a $10,000 Investment
through 3/31/2017

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 4/27/2017

Net Asset Value (NAV) $11.94
Daily NAV Change ($) ($0.02) 0.17%
Weekly NAV Change ($) $0.21 1.79%
Public Offering Price (POP) $11.94

Fund Facts

Ticker Symbol WRSBX
CUSIP 930057310
Fund Code 177
Fund Type Domestic Equity
Fund Inception 10/4/1999
Class Inception 10/4/1999
Fiscal Year End June
Dividends Paid December
Fund Assets (as of 3/31/2017) $889.4 mil
Total Equity Holdings (as of 3/31/2017) 80
Total Holdings (as of 3/31/2017) 86
Portfolio Turnover Rate (as of 12/31/2016) 31%
Lipper Category Small-Cap Growth Funds
Morningstar Category Small Growth
Benchmark Russell 2000 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.

Performance at NAV does not include the effect of sales charges, if it had, performance shown would be lower. Class B shares, including sales charge, reflects the applicable contingent deferred sales charge (CDSC), which declines from 5% at the time of purchase to zero at the beginning of the seventh year.

Monthly Rates of Return

Average Annual Total Returns as of 3/31/2017
(Returns for periods of less than 1-yr are not annualized)
 
Fund with maximum 5.00% CDSC 1.74% 17.92% 4.79% 10.58% 8.20% 8.57%
Russell 2000 Growth TR USD 5.35% 23.03% 6.72% 12.10% 8.06% 6.38%
Lipper Small-Cap Growth Funds 5.81% 22.09% 5.02% 10.49% 7.24% 7.73%
Fund at NAV 6.74% 21.92% 5.53% 10.71% 8.20% 8.57%

Quarterly Rates of Return

Average Annual Total Returns as of 3/31/2017
(Returns for periods of less than 1-yr are not annualized)
 
Fund with maximum 5.00% CDSC 1.74% 17.92% 4.79% 10.58% 8.20% 8.57%
Russell 2000 Growth TR USD 5.35% 23.03% 6.72% 12.10% 8.06% 6.38%
Lipper Small-Cap Growth Funds 5.81% 22.09% 5.02% 10.49% 7.24% 7.73%
Fund at NAV 6.74% 21.92% 5.53% 10.71% 8.20% 8.57%

Calendar Year Return

  2012
Class B 13.78 40.60 1.77 -3.14 12.16
Russell 2000 Growth TR USD 14.59 43.30 5.60 -1.38 11.32

Morningstar Ratings as of 3/31/2017 Morningstar Logo

Category: Small Growth
Ratings are based on risk-adjusted returns
Overall out of 599
3 Year out of 599
5 Year out of 527
10 Year out of 386

Lipper Ranking through 3/31/2017 Lipper Logo

Category: Small-Cap Growth Funds
 
Rankings are based on average annual total returns, but do not consider sales charges.
1 Year 280/561 50
3 Year 228/501 46
5 Year 222/442 51
10 Year 121/324 38

Expense Ratios as of 10/31/2016

Net 2.55%
Gross 2.58%

5-Year Standard Deviation as of 3/31/2017

Russell 2000 Growth TR USD 15.24

5-Year MPT* Statistics as of 3/31/2017

*Modern Portfolio Theory
Alpha -0.03
Beta 0.89
R-Squared 92.89
Sharpe Ratio 0.76
Capture Ratio Upside: 88.63%
Downside: 88.85%

Distributions

Historical Prices Inception 10/4/1999

4/3/2017 $11.61 NO NO
4/4/2017 $11.59 NO NO
4/5/2017 $11.47 NO NO
4/6/2017 $11.57 NO NO
4/7/2017 $11.57 NO NO
4/10/2017 $11.59 NO NO
4/11/2017 $11.63 NO NO
4/12/2017 $11.51 NO NO
4/13/2017 $11.43 NO NO
4/17/2017 $11.53 NO NO
4/18/2017 $11.54 NO NO
4/19/2017 $11.60 NO NO
4/20/2017 $11.73 NO NO
4/21/2017 $11.71 NO NO
4/24/2017 $11.88 NO NO
4/25/2017 $11.96 NO NO
4/26/2017 $11.92 NO NO
4/27/2017 $11.94 NO NO

Historical Distributions Inception 10/4/1999

12/8/2016 $0 Long: $0.810 Short: $0.000 $11.32 12/8/2016
12/10/2015 $0 Long: $2.184 Short: $0.000 $10.75 12/10/2015
12/11/2014 $0 Long: $1.457 Short: $0.000 $12.64 12/11/2014
12/12/2013 $0 Long: $2.533 Short: $0.012 $13.44 12/12/2013
12/13/2012 $0 Long: $0.764 Short: $0.000 $11.7 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 3/31/2017

AMN Healthcare Services, Inc. U.S. health care staffing, recruitment and workforce solutions company 2.96%
Ultimate Software Group, Inc. (The) The Ultimate Software Group, Inc. (Ultimate) provides unified human capital management (HCM) software-as-a-service (SaaS) solutions for global businesses. Ultimate’s UltiPro software (UltiPro) is a SaaS-based solution designed to deliver the functionality needed to manage the employment life cycle. 2.66%
Pool Corp. POOLCORP is the largest wholesale distributor of swimming pool and related backyard products. 2.65%
RE/MAX Holdings, Inc., Class A RE/MAX Holdings, Inc. operates as a franchisor of residential and commercial real estate brokerage services in the U.S. and internationally. 2.32%
Watsco, Inc. North American distributor of air conditioning, heating and refrigeration equipment, operating in the U.S., Canada, Mexico and Puero Rico. 2.31%
Booz Allen Hamilton Holding Corp. Booz Allen Hamilton Holding Corp. provides management and technology consulting services to the U.S. government in the defense, intelligence, and civil markets. The Company offers economic and business analysis, information technology, intelligence and operations analysis, modeling and simulation, organization, and other consulting services. 2.31%
Mercury Computer Systems, Inc. Mercury Systems is a commercial provider of secure sensor and mission processing subsystems. Mercury’s solutions power a variety of critical defense and intelligence programs. 2.28%
SVB Financial Group SVB Financial Group (SVBFG) is a financial services company, a bank holding company and financial holding company. Through its subsidiaries and divisions it offers a range of banking and financial products and services to clients across the U.S., as well as in international entrepreneurial markets. 2.15%
Paycom Software, Inc. 2.06%
Dycom Industries, Inc. Dycom Industries, Inc. is a leading provider of specialty contracting services to the dynamic telecommunications and infrastructure industry.  1.96%

Total Portfolio Holdings

Updated quarterly, upon availability.

Market Capitalization
as a % of equity assets as of 3/31/2017

Large 0.0%
Medium 70.4%
Small 29.6%
Median Market Cap (as of 3/31/2017) $2.8 bil

Top 10 Industry Allocation
as a % of Equity Holdings as of 3/31/2017

Application Software 12.4%
Health Care Equipment 8.3%
Regional Banks 6.7%
Semiconductors 6.2%
Health Care Services 4.9%
Restaurants 4.8%
Industrial Machinery 3.9%
Trading Companies & Distributors 3.6%
IT Consulting & Other Services 3.6%
Aerospace & Defense 3.3%

Sector Allocation
as a % of equity assets as of 3/31/2017

Information Technology 29.61%
Industrials 18.54%
Health Care 17.77%
Consumer Discretionary 16.94%
Financials 7.90%
Energy 2.73%
Materials 2.42%
Real Estate 2.41%
Consumer Staples 1.68%

Portfolio Composition
as a % of net assets as of 3/31/2017

Domestic Common Stock 91.98%
Foreign Common Stock 4.33%
Cash and Cash Equivalents 3.69%

Equity Country Allocation
as a % of equity assets as of 3/31/2017

United States 93.4%
Canada 2.0%
Thailand 1.4%
Israel 1.3%
Netherlands 1.1%
Luxembourg 0.8%

Total Portfolio Holdings

Updated quarterly, upon availability.

Risk Factors: The value of the Fund’s shares will change, and you could lose money on your investment. Investing in small-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 2000 Growth is an unmanaged index comprised of securities that represent the small 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.

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 1.38%, Class B shares at 2.55%, Class C shares at 2.28%. 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 RatingTM 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 includes the effects of sales charges, loads, and redemption fees, as applicable. 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. Certain 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.

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

Effective April 1, 2010 Timothy Miller is primarily responsible for the day-to-day management of the Waddell & Reed Advisors Small Cap Fund.

Please remember that an investment in a mutual fund involves risk. Investment return and principal value of a mutual fund investment will fluctuate, and shares, when redeemed, may be worth more or less than their original cost.

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

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