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Jacob Micro Cap Growth Fund

Fund Overview

Ticker:
JMCGX (Class R), JMIGX (Class I)
Fact Sheet:
Investment Category:

Micro Cap Growth

Objective:

The Fund seeks long-term growth of capital.

Investment Minimums:

Initial minimum investment of $2500 for Class R, and $1,000,000 for Class I. Additional minimum investment of $100 for Class R, and $1,000 for Class I.

Investment Strategy:

The Jacob Micro Cap Growth Fund seeks to provide its investors with above average total returns from a broad group of micro capitalization companies that are early in their development and that the Fund believes has significant growth potential. These companies are defined as those with market capitalizations (share price multiplied by number of shares outstanding) of: (1) less than or equal to $600 million; or (2) within the capitalization range of the Russell Micro Cap® Growth Index at the time of purchase.)

The Fund’s portfolio is managed in an aggressive growth style. To achieve its objective, the Fund invests in micro capitalization companies that it believes offer the potential for greater earnings and sales growth potential than larger capitalized companies and may offer substantial opportunities for long-term growth of capital. Overall stock selections are based on a qualitative and quantitative assessment of a company’s fundamental prospects and whether it has an above-average potential for long-term growth of capital. Specifically, the Fund seeks companies with expanding profit margins, sales and earnings growth which, over a business cycle, can be expected to produce high levels of free cash flow. Further, the Fund seeks companies with strong management teams that can capitalize on catalysts for growth and competitive advantages such as superior products and favorable industry, economic and political trends. It is the Fund’s goal to maximize the growth potential of the portfolio while also striving to acquire securities that are selling at a reasonable valuation in view of their expected growth rate.

Daily NAV

08/18/2017
Ticker
JAMFX
JSCGX
JMCGX
JMIGX
NAV
$4.63
$17.78
$10.16
$11.06
$ Change
0.02
0.06
0.06
0.06
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The portfolio managers follow a three-step process to identify and monitor the Fund's investments:

Find

The first step in our investment process is to narrow down the seemingly infinite universe of possibilities and to focus on what we feel are the most attractive opportunities. Accomplishing this step is no easy task. It requires countless hours of research - scouring the Web, reading analyst reports, running quantitative screens, attending conferences, speaking to executives - all in an attempt to find those relatively rare nuggets worth looking into more closely. Sometimes those nuggets are individual companies, and sometimes they are broader themes that can open up a wide range of potential investments.

Filter

Once we find an intriguing investment idea, we then deploy a thorough qualitative and quantitative review process to determine if the opportunity is as attractive as it appears and can be had at a fair price. Very few of our ideas that we uncover end up being part of our concentrated portfolios.

Ideally, we are looking for companies that play in large markets in which there are significant barriers to entry, enjoy what we believe is a strong competitive position with growing market share, and boast capable management teams with proven track records. We want the companies to have unique assets - such as proprietary technologies or unusually loyal customers - with the possibility that positive near-term catalysts could drive the value of our investment higher.

If everything looks good qualitatively, we turn our focus to valuation. We evaluate many different quantitative criteria including cash flows, income statement and balance sheet items. We determine what a company is likely to generate in sales and profits for the coming years and then, using several different metrics, calculate a fair valuation based on those estimates.

Of course, we also consider the biggest risks to each company's outlook and gauge the likelihood that these potential pitfalls could derail the investment thesis.

Follow-Up

Once we add an investment to one of our portfolios, we continue to monitor the position closely, making sure that our original analysis remains valid. We will often rebalance or potentially exit a position if the risk/reward ratio for the investment changes materially. We also conduct detailed portfolio reviews on a regular basis.


Investments in micro capitalization companies may involve greater risks, as these companies tend to have limited product lines, markets and financial or managerial resources. Micro cap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. Equity market. One cannot invest directly in an index.

Total Returns as of Month-End (07/31/2017 ) Total Returns as of Quarter-End (06/30/2017 ) Total Returns as of (06/30/2017 )
Month Quarter 1 Year 3 Years 5 Years Since Inception*
Jacob Micro Cap Growth Fund (Class R) 2.32% 4.16% 11.85% -4.02% N/A 2.48%
Jacob Micro Cap Growth Fund (Class I) 2.39% 4.19% 12.18% -3.75% N/A 2.79%
Russell Micro Cap Growth Index -0.55% 5.29% 22.71% 4.61% N/A 12.39%

*Inception Date: 10/16/2012
Investor Shares (Class R) Expense Ratio: Gross 4.06% Net 2.86%**
Institutional Shares (Class I) Expense Ratio: Gross 3.81% Net 2.61**

Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 888-522-6939.

The fund imposes a 2.00% redemption fee on shares held less than 30 days. Performance data does not reflect the redemption fee. If reflected, returns would be lower. The fund imposes neither a maximum sales charge on purchases nor a maximum deferred sales charge.

**The advisor has contractually agreed to waive fees through January 2, 2018.

Short term performance, in particular, is not a good indication of the fund's future performance, and an investment should not be made based solely on returns.


Investments in micro capitalization companies may involve greater risks, as these companies tend to have limited product lines, markets and financial or managerial resources. Micro cap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. Equity market. One cannot invest directly in an index.

Fund Holdings as of June 30, 2017

Company Name Symbol $ Market Value % of Net Assets
USA Technologies USAT 442,000.00 5.63
Codexis Inc CDXS 386,982.70 4.93
Mitek Sys Inc MITK 368,130.00 4.69
Hortonworks Inc HDP 329,728.00 4.20
Digital Turbine Inc APPS 307,970.00 3.93
Bazaarvoice Inc BV 297,000.00 3.79
Energy Recovery ERII 256,990.00 3.28
Psivida Corp PSDV 256,500.00 3.27
ID Systems Inc IDSY 255,001.87 3.25
Radisys Corp RSYS 233,120.00 2.97
Sajan Inc SAJA 215,764.86 2.75
Intersect Ent Inc XENT 209,625.00 2.67
Icad Inc ICAD 208,075.40 2.65
Aspen Aerogels Inc ASPN 204,700.00 2.61
Top Image Systems TISA 197,665.62 2.52
Lantronix Inc LTRX 195,688.00 2.49
Numerex Corp Pa NMRX 194,409.62 2.48
Esperion ESPR 194,376.00 2.48
Tillys Inc TLYS 182,700.00 2.33
Senomyx Inc SNMX 174,300.00 2.22
Entegra Finl Corp ENFC 170,625.00 2.17
First Northwest Bancorp FNWB 165,931.94 2.11
Imprimis IMMY 151,644.80 1.93
Bioamber Inc BIOA 149,342.70 1.90
Netlist Inc NLST 148,614.00 1.89
BJS Restaurants Inc BJRI 130,375.00 1.66
Ceva Inc CEVA 129,078.00 1.65
IZEA Inc IZEA 116,510.00 1.49
Immersion Corp IMMR 116,160.44 1.48
Omeros Corp OMER 114,453.75 1.46
Staar Surgical Co STAA 111,780.00 1.42
Tearlab Corp TEAR 110,712.00 1.41
Chuys Hldgs Inc CHUY 105,300.00 1.34
Ignyta Inc RXDX 103,500.00 1.32
Reeds Inc REED 96,806.85 1.23
Reis Inc REIS 96,666.25 1.23
Chromadex Corp CDXC 95,500.00 1.22
NV5 Global Inc NVEE 89,250.00 1.14
Real Ind Inc RELY 87,000.00 1.11
El Pollo Loco Hldgs LOCO 83,100.00 1.06
Midsouth Bancorp MSL 58,750.00 0.75
Staffing 360 STAF 46,150.00 0.59
Chemocentryx Inc CCXI 42,120.00 0.54

Fund holdings and sector allocations are subject to change and are not a recommendation to buy or sell any security.

By clicking on the company names, you will be leaving the Jacob Funds website and will be entering a third-party website. Jacob Funds is not responsible for, nor can guarantee, the accuracy of any information contained on a third party site.


Investments in micro capitalization companies may involve greater risks, as these companies tend to have limited product lines, markets and financial or managerial resources. Micro cap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. Equity market. One cannot invest directly in an index.

Sectors as of August 31, 2016

Sector Name %
Biotech & Pharmaceuticals 18.5
Chemicals   2.3
Energy-Exploration & Production   2.0
Financial   2.9
Food & Beverages   6.3
Industrial   3.3
Medical Devices 15.4
Retail & Restaurants   7.7
Technology-Hardware   7.3
Technology-Software & Services 32.6
Money Market Fund   1.7

 

Fund holdings and sector allocations are subject to change and are not a recommendation to buy or sell any security.


Investments in micro capitalization companies may involve greater risks, as these companies tend to have limited product lines, markets and financial or managerial resources. Micro cap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. Equity market. One cannot invest directly in an index.

JACOB FUNDS




Please note that the Jacob Funds referred to in this website are offered and sold only to United States residents, and the information on this website is intended only for such people. The Fund is not offered for sale in countries other than the U.S. and it territories. This website should not be considered a solicitation to buy or an offer to sell shares of the Jacob Funds in any jurisdiction where it would be unlawful under the securities law of that jurisdiction.

Each fund's investment objectives, risks, charges, expenses and other information are described in the prospectuses, which must be read and considered carefully before investing. You may download the prospectus or obtain a hard copy by calling 888-522-6239.

Mutual fund investing involves risk. Principal loss is possible.