Dear Fellow Shareholder: For the quarter ending September 30, 2012, Ariel Fund rose +6.66% versus +5.85% for the Russell 2500 Value Index and +5.67% for the Russell 2000 Value Index. Meanwhile, Ariel Appreciation Fund jumped +7.43% during the quarter versus a +5.80% gain for the Russell Midcap Value Index and a +5.59% rise for the Russell Midcap Index. These gains helped distinguish our year-to-date returns. More specifically, Ariel Fund has risen +15.59% through September 30th versus +14.47% for the Russell 2500 Value Index and +14.37% for the Russell 2000 Value Index, respectively. Ariel Appreciation Fund is up +16.62% this year compared to +14.03% for the Russell Midcap Value Index and +14.00% for the Russell Midcap Index.
For the one-year period ending September 30, 2012, Ariel Fund gained +35.48% versus a rise of +32.15% for the Russell 2500 Value Index. During the same period, Ariel Appreciation Fund surged +31.57% compared to the Russell Midcap Value Index, which returned +29.28%. Meanwhile, the S&P 500 Index gained +30.20% over the one-year period. The sweet spot for both Funds was the financial sector, which came back after being very out of favor in the preceding year. Meanwhile, health care was a key soft spot in both portfolios. On a stock-by-stock basis, Gannett Co., Inc. (GCI, Financial) and Fair Isaac Corp. (FICO, Financial) were top performers in Ariel Fund, gaining +95.39% and +103.15%, respectively. Weaker performers included DeVry Inc. (DV, Financial) and Hospira, Inc. (HSP, Financial), which fell -37.81% and -11.30%. Ariel Appreciation Fund’s best performers were CBS Corp. (CBS, Financial), up +80.68%, and First American Financial Corp. (FAF, Financial), rising +72.39%. Its laggards included DeVry Inc. and Dell Inc. (DELL, Financial), which lost -37.81% and -29.75%, respectively.
Stock gains have been so dramatic of late that some may not know the last few weeks represent the culmination of not one, but two meaningful market milestones. First, as Barron’s recently pointed out, October 19, 2012 marked the 25th Anniversary of “the worst day ever in American stock market history” when the Dow plummeted a whopping -22.6% in one day.1 As the newspaper noted, “Were it a happier occasion, we’d call it a silver anniversary. As it happened, the silver came to those who bought equities on and immediately after that dark day, as it marked the low.” We did just that—even making outbound calls to clients on Black Monday to request more money for our bargain shopping. Remarkably, from that 1987 low, the Dow’s all-time high occurred almost exactly 20 years later on October 9, 2007. Herein lies the second noteworthy milestone. It may surprise many to hear that five years later, the Dow is within shouting distance of its peak. In fact, The Wall Street Journal calculates that as of quarter end, the index is “less than 4%” off its high despite a period in which “the stock market halved and then doubled, bonds soared, the real-estate market crashed and stabilized, and energy prices spiked, tanked and rose anew.”2
“Skeptical about the Skepticism”3
Here is the rub. As stocks have recovered, the one area of the market that has been the most widely reviled has also been the driver of our outperformance. This holds true for shorter periods like last quarter as well as the last five years. More specifically, although counterintuitive to some, financial stocks have been our best-performing sector as the market has neared all-time highs.
As the primary sponsors of the toxic mortgage-backed securities that collapsed during the recent housing bust, financial firms are widely viewed as fueling the worst investment crisis since the Great Depression. In fact, financials have been so widely admonished that their shares have traded as much on negative views of the past as on objective judgments about the present—and future. In keeping with our contrarian view, where others saw wreckage, we saw opportunity. More specifically, we took advantage of the pall that was cast over the entire sector—a negative sentiment that indiscriminately punished most of the companies in the industry regardless of their exposure to the difficulties at hand. In so doing, we were able to buy discarded shares of financial brands that we believed to be well-positioned to succeed after silly season subsided. This is where the data gets interesting and the merits of our patient investing philosophy become quite clear. As depicted below, for the five years ending September 30, 2012, portfolio attribution shows that financial services represented our second-most heavily-weighted and most heavily-weighted sectors in Ariel Fund and Ariel Appreciation Fund, respectively.
Financial stocks also boosted our relative returns over this half-decade. First and foremost, over the last five years Ariel Fund gained +0.36% annually*, which is +1.83% cumulatively, versus +2.21% annually and +11.54% cumulatively for the Russell 2500 Value Index. Similarly, over the last five years Ariel Appreciation Fund returned +3.26% annually**, or +17.42% cumulatively, against the Russell Midcap Value Index’s +1.73% annualized and +8.98% cumulative return. Although Ariel Fund underperformed its benchmark, its financial stocks added 896 basis points of cumulative outperformance versus the index. These issues provided an even stronger relative return contribution—2,585 basis points cumulatively—to Ariel Appreciation Fund. In both cases, as is typical, other sectors detracted from our relative performance. For example, in the case of Ariel Fund, stock selection in the producer durables sector resulted in the biggest drag on our returns, which set back our relative performance -5.34%. Similarly, the energy sector dinged Ariel Appreciation Fund -6.48% over the period.
Beyond the actual financial sector performance boost, the aforementioned data only tells one part of the story. When we further drill down on the individual stocks driving our returns, it becomes clear that we could never be accused of benchmark hugging. Our bets are truly active as evidenced by the fact that of the 15 financial stocks held in Ariel Fund over this period, 12 were constituents of the Russell 2500 Value Index. Yet these dozen holdings averaged 21.54% of our portfolio versus 1.51% for the benchmark. The same is true for Ariel Appreciation Fund, which held 19 financial services stocks over this period—11 of which were in the benchmark. Whereas these 11 names represented on average 20.37% of our portfolio, combined they made up just 1.11% of the benchmark.
Investing in Money
While there is little question that we made a conscious decision to embrace one of the most unloved areas of the economy and in so doing selected totally different stocks from the benchmark, we did not opt for the run-of-the-mill financials like the scores of washed-out and undifferentiated regional banks. Instead, leading into the crisis and fearing heightened risk profiles, we sold the monoline insurers in advance of their remarkable declines. We then doubled and tripled down on the real estate management companies in the wake of widespread and indiscriminate selling that failed to consider the long-term viability of the industry leaders. We also bought more shares of the asset managers—companies that were admittedly whipsawed by market fears as they often traded in tandem with market sentiment rather than the underlying fundamentals.
And while we still have exposure to these more traditional areas, our newest bet is on the alternative investment managers that are well-poised to benefit as pension funds continue to raise their exposure to the asset class. Here we have set our sights on KKR & Co. L.P. (KKR, Financial) and Blackstone Group L.P. (BX, Financial)11—even though some question their management’s shareholder friendliness and may be wary of how their financing may one day be challenged in a rising interest rate environment. In our view, both companies stand to benefit as pension funds continue to raise their exposure to hedge funds and private equity; both possess strong, long-term track records; and both companies’ balance sheets give them competitive advantages over peers. Additionally, we think in each case the market is underestimating the value of the future profits even if Congress opts to change the tax treatment of carried interest which are profits currently treated as capital gains instead of ordinary income.
According to Barron’s, “The economist and investor John Maynard Keynes emphasized that investment profits are largely determined by how investors behave at market tops and bottoms—which is where price volatility concentrates, where sudden spikes occur, where big investment mistakes are made.”12 Our activity in the financial services sector underscores this view.
Portfolio Comings and Goings
During the quarter, we purchased Life Technologies Corp. (LIFE), which focuses on improving the human condition, in Ariel Fund. Its systems, consumables and services enable researchers to accelerate scientific exploration, driving to discoveries and developments that better the quality of life. Conversely, we exited our position in Stanley Black & Decker, Inc. (SWK, Financial) in order to pursue more compelling opportunities.
During the quarter, we purchased three new holdings and eliminated one in Ariel Appreciation Fund. We added global biotechnology tools company Life Technologies Corp. We also initiated a position in human resources consulting firm Towers Watson (TW, Financial), whose clients comprise 74% of the Fortune 1000 and 77% of the Fortune Global 500. Competitive advantages in scope, scale and brand position the company to benefit from the long-term tailwinds in human resources consulting. Towers Watson operates a growing business with low capital requirements while enjoying high operating margins as well as high retention rates. Lastly, we purchased motorsports owner International Speedway Corp. (ISCA, Financial). A current holding in both Ariel Fund and Ariel Discovery Fund, International Speedway has an unparalleled portfolio of racetracks across the country. The vast majority of its revenues come from NASCAR-sanctioned races, making the firm closely linked to the second-most watched sport in the U.S. In order to pursue these new opportunities, we exited Chesapeake Energy Corp. (CHK).
We appreciate the opportunity to serve you and welcome your questions or comments. Feel free to contact us at [email protected].
Sincerely,
John W. Rogers, Jr.
Chairman and CEO
Mellody Hobson
President
1 Racanelli, Vito. “Stocks Give Back Gains on Weak Earnings.” Barron’s, October 22, 2012, page M3.
2 Light, Joe and Ben Levisohn. “What a Trip.” The Wall Street Journal, October 6-7, 2012, page B7.
3 DeAenlle, Conrad. “Wary of Heights (and the Future).” The New York Times, April 8, 2012, page BU11.
4 The primary benchmark for the Ariel Fund is the Russell 2500 Value Index and the primary benchmark for the Ariel Appreciation Fund is the Russell Midcap Value Index.
5 The average weight is the simple arithmetic average of the daily weight for each security or group in the portfolio and benchmark.
6 Total Portfolio Return shown does not represent the performance of Ariel Fund or Ariel Appreciation Fund for the period. The Total Portfolio Return shown represents the cumulative returns for the period of the stocks in the financial sector before the deduction of fees, charges, transaction costs or other expenses.
7 The Benchmark Total Return represents the cumulative returns for the period of the stocks in the financial sector within the respective benchmark.
8 Allocation Effect is the portion of the Fund’s excess return attributed to taking different sector group bets from its respective Benchmark.
9 Selection Effect is the portion of Fund excess return attributable to choosing different securities within groups from its Benchmark. Interaction Effect is the portion of the Fund’s excess return attributable to combining allocation decisions with relative performance. The Interaction Effect measures the strength of the manager’s convictions.
10 The Total Effect column represents the effect on total returns of the Fund within the sector relative to the returns of its Benchmark.
11 KKR & Co. is a holding in Ariel Fund and Ariel Appreciation Fund. Blackstone Group L.P. is a holding in Ariel Appreciation Fund.
12 Conrad, Martin. “The Money Paradox.” Barron’s, December 31, 2011. Web.
Investing in small and mid-cap stocks is more risky and more volatile than investing in large cap stocks. Ariel Fund and Ariel Appreciation Fund concentrate a significant portion of their assets in the financial services and consumer discretionary sectors and their performance may suffer if these sectors underperform the overall stock market.
This commentary candidly discusses a number of individual companies. These opinions are current as of the date of this commentary, but are subject to change. The information provided in this letter is not reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell a particular security.
Portfolio holdings are subject to change. The performance of any single portfolio holding is no indication of the performance of other portfolio holdings of Ariel Fund, Ariel Appreciation Fund or of the performance of the Funds. Click here for the most recent holdings for Ariel Fund and Ariel Appreciation Fund.
One of the Fund’s benchmarks has been changed from the Russell 2500TM Index to the Russell 2000® Value Index as the Adviser believes the new index is more indicative of the market capitalization and style profile of the fund. The Russell 2000® Value Index measures the performance of the small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2500TM Value Index measures the performance of the small to mid-cap value segment of the U.S. equity universe. It includes those Russell 2500 companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap® Value Index measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap® Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap Index is a subset of the Russell 1000® Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap Index represents approximately 27% of the total market capitalization of the Russell 1000 companies. Russell® is a trademark of Russell Investment Group, which is the source and owner of the Russell Indexes’ trademarks, service marks and copyrights. The S&P 500® Index is the most widely accepted barometer of the market. It includes 500 blue chip, large cap stocks, which together represent about 75% of the total U.S. equities market.
Investors should consider carefully the investment objectives, risks, and charges and expenses before investing. For a current summary prospectus or full prospectus which contains this and other information about the Funds offered by Ariel Investment Trust, call us at 800-292-7435 or click here. Please read the summary prospectus or full prospectus carefully before investing. Distributed by Ariel Distributors, LLC, a wholly-owned subsidiary of Ariel Investments, LLC.
For the one-year period ending September 30, 2012, Ariel Fund gained +35.48% versus a rise of +32.15% for the Russell 2500 Value Index. During the same period, Ariel Appreciation Fund surged +31.57% compared to the Russell Midcap Value Index, which returned +29.28%. Meanwhile, the S&P 500 Index gained +30.20% over the one-year period. The sweet spot for both Funds was the financial sector, which came back after being very out of favor in the preceding year. Meanwhile, health care was a key soft spot in both portfolios. On a stock-by-stock basis, Gannett Co., Inc. (GCI, Financial) and Fair Isaac Corp. (FICO, Financial) were top performers in Ariel Fund, gaining +95.39% and +103.15%, respectively. Weaker performers included DeVry Inc. (DV, Financial) and Hospira, Inc. (HSP, Financial), which fell -37.81% and -11.30%. Ariel Appreciation Fund’s best performers were CBS Corp. (CBS, Financial), up +80.68%, and First American Financial Corp. (FAF, Financial), rising +72.39%. Its laggards included DeVry Inc. and Dell Inc. (DELL, Financial), which lost -37.81% and -29.75%, respectively.
Stock gains have been so dramatic of late that some may not know the last few weeks represent the culmination of not one, but two meaningful market milestones. First, as Barron’s recently pointed out, October 19, 2012 marked the 25th Anniversary of “the worst day ever in American stock market history” when the Dow plummeted a whopping -22.6% in one day.1 As the newspaper noted, “Were it a happier occasion, we’d call it a silver anniversary. As it happened, the silver came to those who bought equities on and immediately after that dark day, as it marked the low.” We did just that—even making outbound calls to clients on Black Monday to request more money for our bargain shopping. Remarkably, from that 1987 low, the Dow’s all-time high occurred almost exactly 20 years later on October 9, 2007. Herein lies the second noteworthy milestone. It may surprise many to hear that five years later, the Dow is within shouting distance of its peak. In fact, The Wall Street Journal calculates that as of quarter end, the index is “less than 4%” off its high despite a period in which “the stock market halved and then doubled, bonds soared, the real-estate market crashed and stabilized, and energy prices spiked, tanked and rose anew.”2
“Skeptical about the Skepticism”3
Here is the rub. As stocks have recovered, the one area of the market that has been the most widely reviled has also been the driver of our outperformance. This holds true for shorter periods like last quarter as well as the last five years. More specifically, although counterintuitive to some, financial stocks have been our best-performing sector as the market has neared all-time highs.
As the primary sponsors of the toxic mortgage-backed securities that collapsed during the recent housing bust, financial firms are widely viewed as fueling the worst investment crisis since the Great Depression. In fact, financials have been so widely admonished that their shares have traded as much on negative views of the past as on objective judgments about the present—and future. In keeping with our contrarian view, where others saw wreckage, we saw opportunity. More specifically, we took advantage of the pall that was cast over the entire sector—a negative sentiment that indiscriminately punished most of the companies in the industry regardless of their exposure to the difficulties at hand. In so doing, we were able to buy discarded shares of financial brands that we believed to be well-positioned to succeed after silly season subsided. This is where the data gets interesting and the merits of our patient investing philosophy become quite clear. As depicted below, for the five years ending September 30, 2012, portfolio attribution shows that financial services represented our second-most heavily-weighted and most heavily-weighted sectors in Ariel Fund and Ariel Appreciation Fund, respectively.
Financial stocks also boosted our relative returns over this half-decade. First and foremost, over the last five years Ariel Fund gained +0.36% annually*, which is +1.83% cumulatively, versus +2.21% annually and +11.54% cumulatively for the Russell 2500 Value Index. Similarly, over the last five years Ariel Appreciation Fund returned +3.26% annually**, or +17.42% cumulatively, against the Russell Midcap Value Index’s +1.73% annualized and +8.98% cumulative return. Although Ariel Fund underperformed its benchmark, its financial stocks added 896 basis points of cumulative outperformance versus the index. These issues provided an even stronger relative return contribution—2,585 basis points cumulatively—to Ariel Appreciation Fund. In both cases, as is typical, other sectors detracted from our relative performance. For example, in the case of Ariel Fund, stock selection in the producer durables sector resulted in the biggest drag on our returns, which set back our relative performance -5.34%. Similarly, the energy sector dinged Ariel Appreciation Fund -6.48% over the period.
Beyond the actual financial sector performance boost, the aforementioned data only tells one part of the story. When we further drill down on the individual stocks driving our returns, it becomes clear that we could never be accused of benchmark hugging. Our bets are truly active as evidenced by the fact that of the 15 financial stocks held in Ariel Fund over this period, 12 were constituents of the Russell 2500 Value Index. Yet these dozen holdings averaged 21.54% of our portfolio versus 1.51% for the benchmark. The same is true for Ariel Appreciation Fund, which held 19 financial services stocks over this period—11 of which were in the benchmark. Whereas these 11 names represented on average 20.37% of our portfolio, combined they made up just 1.11% of the benchmark.
Investing in Money
While there is little question that we made a conscious decision to embrace one of the most unloved areas of the economy and in so doing selected totally different stocks from the benchmark, we did not opt for the run-of-the-mill financials like the scores of washed-out and undifferentiated regional banks. Instead, leading into the crisis and fearing heightened risk profiles, we sold the monoline insurers in advance of their remarkable declines. We then doubled and tripled down on the real estate management companies in the wake of widespread and indiscriminate selling that failed to consider the long-term viability of the industry leaders. We also bought more shares of the asset managers—companies that were admittedly whipsawed by market fears as they often traded in tandem with market sentiment rather than the underlying fundamentals.
And while we still have exposure to these more traditional areas, our newest bet is on the alternative investment managers that are well-poised to benefit as pension funds continue to raise their exposure to the asset class. Here we have set our sights on KKR & Co. L.P. (KKR, Financial) and Blackstone Group L.P. (BX, Financial)11—even though some question their management’s shareholder friendliness and may be wary of how their financing may one day be challenged in a rising interest rate environment. In our view, both companies stand to benefit as pension funds continue to raise their exposure to hedge funds and private equity; both possess strong, long-term track records; and both companies’ balance sheets give them competitive advantages over peers. Additionally, we think in each case the market is underestimating the value of the future profits even if Congress opts to change the tax treatment of carried interest which are profits currently treated as capital gains instead of ordinary income.
According to Barron’s, “The economist and investor John Maynard Keynes emphasized that investment profits are largely determined by how investors behave at market tops and bottoms—which is where price volatility concentrates, where sudden spikes occur, where big investment mistakes are made.”12 Our activity in the financial services sector underscores this view.
Portfolio Comings and Goings
During the quarter, we purchased Life Technologies Corp. (LIFE), which focuses on improving the human condition, in Ariel Fund. Its systems, consumables and services enable researchers to accelerate scientific exploration, driving to discoveries and developments that better the quality of life. Conversely, we exited our position in Stanley Black & Decker, Inc. (SWK, Financial) in order to pursue more compelling opportunities.
During the quarter, we purchased three new holdings and eliminated one in Ariel Appreciation Fund. We added global biotechnology tools company Life Technologies Corp. We also initiated a position in human resources consulting firm Towers Watson (TW, Financial), whose clients comprise 74% of the Fortune 1000 and 77% of the Fortune Global 500. Competitive advantages in scope, scale and brand position the company to benefit from the long-term tailwinds in human resources consulting. Towers Watson operates a growing business with low capital requirements while enjoying high operating margins as well as high retention rates. Lastly, we purchased motorsports owner International Speedway Corp. (ISCA, Financial). A current holding in both Ariel Fund and Ariel Discovery Fund, International Speedway has an unparalleled portfolio of racetracks across the country. The vast majority of its revenues come from NASCAR-sanctioned races, making the firm closely linked to the second-most watched sport in the U.S. In order to pursue these new opportunities, we exited Chesapeake Energy Corp. (CHK).
We appreciate the opportunity to serve you and welcome your questions or comments. Feel free to contact us at [email protected].
Sincerely,
John W. Rogers, Jr.
Chairman and CEO
Mellody Hobson
President
1 Racanelli, Vito. “Stocks Give Back Gains on Weak Earnings.” Barron’s, October 22, 2012, page M3.
2 Light, Joe and Ben Levisohn. “What a Trip.” The Wall Street Journal, October 6-7, 2012, page B7.
3 DeAenlle, Conrad. “Wary of Heights (and the Future).” The New York Times, April 8, 2012, page BU11.
4 The primary benchmark for the Ariel Fund is the Russell 2500 Value Index and the primary benchmark for the Ariel Appreciation Fund is the Russell Midcap Value Index.
5 The average weight is the simple arithmetic average of the daily weight for each security or group in the portfolio and benchmark.
6 Total Portfolio Return shown does not represent the performance of Ariel Fund or Ariel Appreciation Fund for the period. The Total Portfolio Return shown represents the cumulative returns for the period of the stocks in the financial sector before the deduction of fees, charges, transaction costs or other expenses.
7 The Benchmark Total Return represents the cumulative returns for the period of the stocks in the financial sector within the respective benchmark.
8 Allocation Effect is the portion of the Fund’s excess return attributed to taking different sector group bets from its respective Benchmark.
9 Selection Effect is the portion of Fund excess return attributable to choosing different securities within groups from its Benchmark. Interaction Effect is the portion of the Fund’s excess return attributable to combining allocation decisions with relative performance. The Interaction Effect measures the strength of the manager’s convictions.
10 The Total Effect column represents the effect on total returns of the Fund within the sector relative to the returns of its Benchmark.
11 KKR & Co. is a holding in Ariel Fund and Ariel Appreciation Fund. Blackstone Group L.P. is a holding in Ariel Appreciation Fund.
12 Conrad, Martin. “The Money Paradox.” Barron’s, December 31, 2011. Web.
Investing in small and mid-cap stocks is more risky and more volatile than investing in large cap stocks. Ariel Fund and Ariel Appreciation Fund concentrate a significant portion of their assets in the financial services and consumer discretionary sectors and their performance may suffer if these sectors underperform the overall stock market.
This commentary candidly discusses a number of individual companies. These opinions are current as of the date of this commentary, but are subject to change. The information provided in this letter is not reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell a particular security.
Portfolio holdings are subject to change. The performance of any single portfolio holding is no indication of the performance of other portfolio holdings of Ariel Fund, Ariel Appreciation Fund or of the performance of the Funds. Click here for the most recent holdings for Ariel Fund and Ariel Appreciation Fund.
One of the Fund’s benchmarks has been changed from the Russell 2500TM Index to the Russell 2000® Value Index as the Adviser believes the new index is more indicative of the market capitalization and style profile of the fund. The Russell 2000® Value Index measures the performance of the small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2500TM Value Index measures the performance of the small to mid-cap value segment of the U.S. equity universe. It includes those Russell 2500 companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap® Value Index measures the performance of the mid-cap value segment of the U.S. equity universe. It includes those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values. The Russell Midcap® Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap Index is a subset of the Russell 1000® Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap Index represents approximately 27% of the total market capitalization of the Russell 1000 companies. Russell® is a trademark of Russell Investment Group, which is the source and owner of the Russell Indexes’ trademarks, service marks and copyrights. The S&P 500® Index is the most widely accepted barometer of the market. It includes 500 blue chip, large cap stocks, which together represent about 75% of the total U.S. equities market.
Investors should consider carefully the investment objectives, risks, and charges and expenses before investing. For a current summary prospectus or full prospectus which contains this and other information about the Funds offered by Ariel Investment Trust, call us at 800-292-7435 or click here. Please read the summary prospectus or full prospectus carefully before investing. Distributed by Ariel Distributors, LLC, a wholly-owned subsidiary of Ariel Investments, LLC.
