Performance Review

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Annualized Performance
as of 6/30/2018
3 MO:4.09%
YTD :4.86%
1 YR:16.73%
3 YRS:6.62%
5 YRS:9.94%
10 YRS:10.53%

Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown here.

For Benchmark information click here

The views expressed in this investment report represent the opinions of PNC Capital Advisors, LLC and are not intended to predict or depict performance of any investment. All information contained herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, solicitation or recommendation to purchase any security. The information herein was obtained by various sources; we do not guarantee its accuracy or completeness. Fund performance quoted above is for class I shares. Past performance does not guarantee future results. These views are as of the date of this publication and are subject to change based on subsequent developments.

Investments in small-capitalization companies present greater risk of loss than investments in large companies. Investments in value companies can continue to be undervalued for long periods of time and be more volatile than the stock market in general. Investments in growth companies can be more sensitive to the company's earnings and more volatile than the stock market in general. International investments are subject to special risks not ordinarily associated with domestic investments, including currency fluctuations, economic and political change and differing accounting standards that may adversely affect portfolio securities. These risks may be heightened in emerging markets.

PNC Small Cap Fund (class I)1 returned 4.14% in the second quarter versus a return of 7.75% for the benchmark, the Russell 2000 Index.

In the broader market, the second quarter was dominated by trade tariff proclamations and the effect of the tariffs, not only on corporations, but also on the global economy as a whole. It appeared the market deemed small-capitalization companies relative winners in this environment filled with protectionist rhetoric, given their outsized exposure to U.S.-based revenues, relative to their large-capitalization brethren and passive investors appeared to shift allocations to small caps, as measured by exchange-traded fund flows.

In addition to the dominance of small capitalizations over large, the second quarter was also marked by a rotation from growth to value within the small-capitalization universe. The Russell 2000 Value Index outperformed the Russell 2000 Growth Index by close to 1% in the second quarter—a reversal of Growth’s dominance in the first quarter of 2018. This environment is reminiscent of what the Index experienced around the middle of 2016. During that period, value handily outperformed growth, low quality stocks rallied, and again, the smallest of the small-capitalization performed quite well.


For the Fund, the largest overweight is to Industrials, followed by Financials and Consumer Discretionary. Within Industrials, our overweight is concentrated in professional services, aerospace and defense, and building products companies. Financials included an overweight to consumer finance, insurance, and capital markets companies. The focus within Consumer Discretionary is on the auto components, household durables, and specialty retail industries.

The largest sector underweights in the Fund are in Health Care and Information Technology. Health Care investments consist of a provider of staffing services to hospitals and health-care facilities and a food and animal safety testing products company. While the biotechnology and pharmaceutical industries made up over half the Health Care weight in the Russell 2000 Index, the Fund does not have any exposure to these industries. In general, companies within these industries tend not to fit the investment criteria, due to their tendency to either lack consistent, recurring revenue or cash flow, or their dependency on a single product for a majority of revenue generation. The Information Technology investments are mainly in the software, services, and electronic equipment industries, with no exposure to the semiconductor and communications equipment groups. Finally, the portfolio does not have exposure to the Energy, Consumer Staples, Telecommunication Services, or Utilities sectors.


1Effective May 17, 2018, PNC Small Cap Fund reopened to new investors.

Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than that shown here. Select a Fund to view the most recent month-end performance information or go to each Fund's snapshot page to view most recent month-end performance as well as any waiver or expense reimbursement information.

The information contained in this piece should not be considered legal or tax advice; questions regarding your specific situation should be directed to your legal or tax advisor.

NOT FDIC INSURED | NO BANK OR FEDERAL GOVERNMENT GUARANTEE | MAY LOSE VALUE

You should consider the investment objectives, risks, charges, and expenses of the PNC Funds carefully before investing. A prospectus or summary prospectus with this and other information may be obtained at 800-622-FUND (3863) or pncfunds.com. Please read it carefully before investing.

PNC Capital Advisors, LLC, a subsidiary of The PNC Financial Services Group Inc., serves as investment adviser and co-administrator to PNC Funds and receives fees for its services. PNC Funds are distributed by PNC Funds Distributor, LLC, which is not affiliated with the adviser and is not a bank.

This site shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of shares of the PNC Funds in any jurisdiction in which such offer, solicitation or sale would be unlawful.

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