Investing in small and mid-cap stocks is more risky and more volatile than investing in large cap stocks. Ariel Fund often invests a significant portion of its assets in companies within the financial services and consumer discretionary sectors and its performance may suffer if these sectors underperform the overall stock market. Performance data quoted represents past performance. Past performance does not guarantee future results. All performance assumes the reinvestment of dividends and capital gains and represents returns of the Investor Class shares. 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 may be lower or higher than the performance data quoted. For the period ended June 30, 2013, the average annual total returns of Ariel Fund (Investor Class) for the one-, five- and ten-year periods were +30.68%, +10.65% and +7.48%, respectively. Ariel Fund's Investor Class shares had an annual expense ratio of 1.06% for the year ended September 30, 2012. Performance data current to the most recent month-end for Ariel Fund may be obtained by visiting our web site, arielinvestments.com.
Wow, that happened fast. Or so we think many investors would say. For a typical U.S. investor holding a portfolio diversified across domestic stocks, foreign stocks and bonds, the year started quite well. Through the first four months, there were down months here and there in an asset class or two, but most holdings showed gains— handsome ones in stocks. Cracks showed in May in foreign stocks and bonds, and then most everything fell in June. U.S. bonds lost more than -1% (for the second straight month), emerging market stocks lost more than -6% and domestic large-caps lost more than -1%. Those losses seem minor by comparison to gold, which as reported in The Wall Street Journal, "fell -23% in the second quarter, the biggest quarterly decline since trading of U.S. gold futures began in 1974." Conventional wisdom holds that it was Ben Bernanke's mid-June comments about quantitative easing that spurred the rout. To our minds, he simply signaled that quantitative easing would slow down at some point, which we would have thought an obvious truth. Many reacted, however, as if it was new and harsh news. We were pleased that the effects were less dramatic on our investment universes than they were on the recently popular areas such as bonds, emerging markets stocks and gold. So it is with pleasure that we note our positive returns during a difficult quarter. In the second quarter of 2013, Ariel Fund returned +1.69%, a gain between the Russell 2500 Value Index and the Russell 2000 Value Index, which rose +1.54% and +2.47%, respectively. Continue Reading »