Note: This Fund is currently offered (by purchase or exchange) only to investors purchasing shares through certain financial intermediaries. Please see the prospectus or contact RS Investments for more information.
The RS Partners Fund seeks long-term growth of capital by investing in equity securities — principally of companies with market capitalizations of up to $3 billion — using a value methodology combining balance sheet analysis with cash flow analysis.
Investment Objective
The Fund's investment objective is long-term growth. The Fund seeks to increase shareholder capital over the long term.
Investment Strategy
The Fund invests principally in equity securities of companies with market capitalizations of up to $3 billion that RS Investments believes are undervalued. In evaluating investments for the Fund, RS Investments employs a return on capital analysis, combining balance sheet and cash flow analysis. The Fund typically invests most of its assets in securities of U.S. companies, but may also invest any portion of its assets in foreign securities. The Fund is a non-diversified mutual fund.
Since its inception, the Fund frequently has held a substantial portion of its assets, at times equaling or exceeding 25%, in cash and cash equivalents. The Fund may, but will not necessarily, do so in the future.
Investment Process
In evaluating investments for the Fund, RS Investments employs a value methodology, combining balance sheet and cash flow analysis. We may perform a number of analyses in evaluating a potential investment, including, for example:
• performing fundamental research focusing on business analysis;
• observing how management allocates capital;
• striving to understand the unit economics of the business of the company;
• studying the cash flow rate of return on capital employed;
• discerning the sources and uses of cash;
• considering how management is compensated;
• asking how the stock market is pricing the entire company.
Sell Discipline
Although RS Investments may consider the factors described above in purchasing or selling investments in the Fund, RS Investments may purchase, sell, or continue to hold an investment for the Fund whenever it believes doing so may benefit the Fund, or on the basis of any of the factors described above or any other factors it may in its discretion consider.
Risk Factors
Investing in small- and mid-size companies can involve risks such as having less publicly available information, higher volatility, and less liquidity than in the case of larger companies. Investing in a more limited number of issuers and sectors can be subject to greater market fluctuation. Overweighting investments in certain sectors or industries increases the risk of loss due to general declines in the prices of stocks in those sectors or industries. Foreign securities are subject to political, regulatory, economic, and exchange-rate risks not present in domestic investments. The value of a debt security is affected by changes in interest rates and is subject to any credit risk of the issuer or guarantor of the security.
