FPA Queens Road Small Cap Value Fund Q4 2024 Commentary

Summary

• The FPA Queens Road Small-cap Value Fund outperformed the Russell 2000 Value Index in 2024, returning 10.76% versus 8.05%, with a focus on long-term performance and risk management.
• The Fund's strategy emphasizes buying high-quality compounders and maintaining tax efficiency, with notable performers including Interdigital, Sprouts, and CSW Industries.
• Market commentary highlights the difficulty in finding reasonably valued quality small-caps, advocating for active management to navigate the "junkier" small-cap indices.
• Despite market volatility, the Fund's portfolio holdings' valuations, competitive positions, and execution track records inspire confidence for long-term growth.

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Dear Shareholder,

The FPA Queens Road Small-cap Value Fund (“Fund”) returned 2.38% for the fourth quarter of 2024 compared to a -1.06% return for the Russell 2000 Value Index in the same period. For the full year, the Fund returned 10.76% versus