FPA U.S. Value Fund, Inc.

Objective:

The primary objective of the FPA U.S. Value, Inc. is long-term growth of capital. Current income is a secondary consideration.

Philosophy:

  • Avoid Permanent Capital Impairment. One of the most important aspects of successful investing is knowing how to avoid permanent capital impairment. To avoid these mistakes, the Strategy:

    • maintains an investment discipline that focuses on key factors such as business quality, valuation and financial leverage.
    • determines an appropriate level of diversification by number of investments and industry exposure in the portfolio.

  • Invest in Quality Companies at Attractive Valuations. One of the best ways to generate strong absolute returns, along with outperformance over full market cycles, is to invest in quality businesses at valuations that do not reflect the underlying companies’ quality and future growth potential. As a result, we are typically looking for quality companies that appear misunderstood and/or out of favor.

    The Strategy defines quality companies as ones that we believe have:
    • strong and enduring competitive positions
    • growing businesses within a growing industry resulting in growing earnings
    • current and/or prospective high returns on capital
    • current and/or prospective robust free cash flow generation

  • Preference for Companies with Good Management. Ideally, we like to invest in businesses that are well managed from an operational and capital allocation standpoint. As a result, we may consider investments in good businesses that are not well-managed provided executives can be replaced and there is an ample discount to our estimate of intrinsic value. Often times, the reason a quality company is offered at a cheap price is due to poor results that stem from mismanagement.  



As of August 31, 2016

Comparative Performance Monthly

Fund/IndexMTDYTDSince 9/1/151 Year5 Years10 Years
FPA U.S. Value Fund, Inc.-1.43 %-3.51 %-3.75 %-3.75 %11.46 %6.99 %
S&P 5000.14 %7.82 %12.55 %12.55 %14.69 %7.51 %
Russell 25000.80 %10.27 %8.79 %8.79 %13.56 %8.02 %

Periods over one year annualized.
On September 1, 2015, the Fund changed its name to FPA U.S. Value Fund, Inc., and the current portfolio manager assumed management of the Fund on that date. Contemporaneous with this change, the Fund transitioned to its current investment strategy. Performance prior to September 1, 2015 reflects the performance of the prior portfolio manager and investment strategy. Performance prior to September 1, 2015 is not indicative of performance for any subsequent periods. The transition took place during time period from September 1, 2015-September 30, 2015.
A redemption fee of 2.00% will be imposed on redemptions within 90 days.
Expense ratio calculated as of most recent prospectus is 0.97%.
Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. This data represents past performance and investors should understand that investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original cost. Current month-end performance data may be obtained by calling toll-free, 1-800-982-4372.


As of June 30, 2016

Fund/IndexQTRYTDSince 9/1/151 Year5 Years10 YearsExpense Ratio1
FPA U.S. Value Fund, Inc.-4.86 %-5.88 %-6.12 %-9.20 %7.45 %6.60 %0.97 %
S&P 5002.46 %3.84 %8.40 %3.99 %12.10 %7.42 %
Russell 25003.57 %3.98 %2.58 %-3.67 %9.48 %7.32 %

Periods over one year annualized.
On September 1, 2015, the Fund changed its name to FPA U.S. Value Fund, Inc., and the current portfolio manager assumed management of the Fund on that date. Contemporaneous with this change, the Fund transitioned to its current investment strategy. Performance prior to September 1, 2015 reflects the performance of the prior portfolio manager and investment strategy. Performance prior to September 1, 2015 is not indicative of performance for any subsequent periods. The transition took place during time period from September 1, 2015-September 30, 2015.
A redemption fee of 2.00% will be imposed on redemptions within 90 days.
1Expense Ratio is calculated as of the date of the most recent prospectus.
Past performance is no guarantee of future results and current performance may be higher or lower than the performance shown. This data represents past performance and investors should understand that investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original cost. Current month-end performance data may be obtained by calling toll-free, 1-800-982-4372.


Portfolio Structure *

CASH PLUS LIQUIDITY:
9.84%
TOTAL NET ASSETS:
$135 Million
NUMBER OF EQUITY HOLDINGS:
23



Top Sectors*



Top Holdings*

McKesson
  6.7%   Walgreens Boots Alliance
  5.2%
CBS
  5.9%   Twenty First Century Fox
  5.2%
Amerisourcebergen
  5.9%   Whirlpool
  4.4%
Cardinal Health
  5.7%   Madison Square Garden
  4.4%
Time Warner

  5.5%   Invesco
  4.2%
 
Top 10 Holdings represent 53.0% of Total Net Assets

Portfolio Holdings

* As of June 30, 2016. Portfolio composition will change due to ongoing management of the funds.  References to individual securities or sectors are for informational purposes only and should not be construed as recommendations by the Funds, Advisor or Distributor.

^ Houghton Mifflin Harcourt, included in the consumer discretionary sector, derives a majority of its revenue and profit from its Education segment, which primarily provides education solutions to educational institutions for the pre-K – 12 market.



As of June 30, 2012
 
(NAV) 1 Year 5 Years 10 Years
Before Tax -7.34% 1.35% 7.48%
After Tax on Distribution* -7.34% 0.98% 7.04%
 
After Tax on Distribution and Sale of Fund Shares* -6.24% 1.04% 6.45%
 
(With Load) 1 Year 5 Years 10 Years
Before Tax -12.21% 0.26% 6.90%
After Tax on Distribution* -12.21% -0.10% 6.47%
 
After Tax on Distribution and Sale of Fund Shares* -10.38% 0.12% 5.93%

**After -tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.  Actual after-tax returns depend upon an investor's tax situation and may differ from those shown.  After-tax returns presented here are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or IRAs.

Performance has been calculated on a total return basis, which combines principal and dividend income changes for the periods shown. Principal changes are based on the difference between the beginning and closing net asset values for the period and assume reinvestment of all dividends and distributions paid. The maximum sales charge of 5.25% and all applicable expenses such as advisory fees have been included in calculating the after tax (with load) performance. Total return calculations are based on a $10,000 investment. This data represents past performance and investors should understand that investment returns and principal values fluctuate, so that when you redeem your investment it may be worth more or less than its original cost. The Prospectus details the Fund"s objective and policies, sales charges, and other matters of interest to the prospective investor. Please read this Prospectus carefully before investing.