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Full Economic Cycle Charts
As a bottom-up fundamental investor, Mairs & Power looks for investments that have "a sustainable competitive advantage" which implies that portfolio holdings will outperform their peers over a long time horizon. When we talk about the advantages of holding through a "economic cycle," the only cycle that is relevant is the economic business cycle fluctuating between periods of expansion and slowing of demand across the economy as measured by Gross Domestic Product growth.
The below charts illustrate the performance of both the Mairs & Power Growth Fund and the Mairs & Power Balanced Fund over five full economic cycles as defined by the national Bureau of Economic Research, measured trough-to-trough, as well as the current period where we are mid-cycle. Each Fund's performance is compared to its relevant benchmark, and in the case of the Growth Fund, with its market index.
These charts illustrate the Growth Fund outperformed its peer as measured by the Lipper Multi-Cap Core Fund Index through every cycle. Both Funds also outperformed their benchmark index in all economic cycles except the 1982-1991 cycle.
The underperformance during the 1982-1991 business cycle coincided with a historic shift in the economy - the dramatic reduction in inflation which had held stock valuations down in the previous cycle. As investors' expectations for inflation came down, there was an across-the-board expansion of stock valuations across the market, resulting in the only period of underperformance to the benchmarks. Both the Growth Fund and Balanced Fund significantly outperformed their benchmarks during the subsequent two cycles.
Performance data quoted represents past performance and 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 Funds may be lower or higher than the performance quoted. For the most recent month-end performance figures, click here or call Shareholder Services at (800) 304-7404.