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Jacob Discovery Fund

Fund Overview

Ticker:
JMCGX (Class R), JMIGX (Class I)
Investment Category:

Growth

Objective:

The Fund seeks long-term growth of capital.

Investment Minimums:

Initial minimum investment of $2500 for Class R, and $100,000 for Class I. Additional minimum investment of $100 for Class R, and $1,000 for Class I.

Investment Strategy:

The Jacob Discovery Fund seeks to provide its investors with above average total returns from a broad group of micro capitalization companies that are early in their development and that the Fund believes has significant growth potential. These companies are defined as those with market capitalizations (share price multiplied by number of shares outstanding) of: (1) less than or equal to $600 million; or (2) within the capitalization range of the Russell Micro Cap® Growth Index at the time of purchase.

The Fund’s portfolio is managed in an aggressive growth style. To achieve its objective, the Fund invests in micro capitalization companies that it believes offer the potential for greater earnings and sales growth potential than larger capitalized companies and may offer substantial opportunities for long-term growth of capital. Overall stock selections are based on a qualitative and quantitative assessment of a company’s fundamental prospects and whether it has an above-average potential for long-term growth of capital. Specifically, the Fund seeks companies with expanding profit margins, sales and earnings growth which, over a business cycle, can be expected to produce high levels of free cash flow. Further, the Fund seeks companies with strong management teams that can capitalize on catalysts for growth and competitive advantages such as superior products and favorable industry, economic and political trends. It is the Fund’s goal to maximize the growth potential of the portfolio while also striving to acquire securities that are selling at a reasonable valuation in view of their expected growth rate.

Daily NAV

05/06/2021
Ticker
JAMFX
JSCGX
JSIGX
JMCGX
JMIGX
NAV
$9.98
$40.84
$41.96
$40.17
$44.39
$ Change
-0.38
-1.04
-1.06
-1.00
-1.10
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The portfolio managers follow a three-step process to identify and monitor the Fund's investments:

Find

The first step in our investment process is to narrow down the seemingly infinite universe of possibilities and to focus on what we feel are the most attractive opportunities. Accomplishing this step is no easy task. It requires countless hours of research - scouring the Web, reading analyst reports, running quantitative screens, attending conferences, speaking to executives - all in an attempt to find those relatively rare nuggets worth looking into more closely. Sometimes those nuggets are individual companies, and sometimes they are broader themes that can open up a wide range of potential investments.

Filter

Once we find an intriguing investment idea, we then deploy a thorough qualitative and quantitative review process to determine if the opportunity is as attractive as it appears and can be had at a fair price. Very few of our ideas that we uncover end up being part of our concentrated portfolios.

Ideally, we are looking for companies that operate in large markets in which there are significant barriers to entry, enjoy what we believe is a strong competitive position with growing market share, and boast capable management teams with proven track records. We want the companies to have unique assets - such as proprietary technologies or unusually loyal customers - with the possibility that positive near-term catalysts could drive the value of our investment higher.

If everything looks good qualitatively, we turn our focus to valuation. We evaluate many different quantitative criteria including cash flows, income statement and balance sheet items. We determine what a company is likely to generate in sales and profits for the coming years and then, using several different metrics, calculate a fair valuation based on those estimates.

Of course, we also consider the biggest risks to each company's outlook and gauge the likelihood that these potential pitfalls could derail the investment thesis.

Follow-Up

Once we add an investment to one of our portfolios, we continue to monitor the position closely, making sure that our original analysis remains valid. We will often rebalance or potentially exit a position if the risk/reward ratio for the investment changes materially. We also conduct detailed portfolio reviews on a regular basis.


Investments in micro capitalization companies may involve greater risks, as these companies tend to have limited product lines, markets and financial or managerial resources. Micro cap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. Equity market. One cannot invest directly in an index.

Total Returns as of Quarter-End (03/31/2021 )
Quarter YTD 1 Year 3 Years 5 Years Since Inception*
Jacob Discovery Fund (Class R) 36.84% 36.84% 219.57% 56.41% 37.07% 21.02%
Jacob Discovery Fund (Class I) 36.74% 36.74% 218.76% 56.06% 36.75% 20.69%
Russell Discovery Index 16.87% 16.87% 123.07% 19.72% 18.82% 14.92%

*Inception Date: 10/16/2012
Investor Shares (Class R) Expense Ratio: Gross 3.16% Net 2.31%**
Institutional Shares (Class I) Expense Ratio: Gross 2.91% Net 2.01%**

Performance data quoted represents past performance; past performance 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 fund may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 888-522-6939.

The fund imposes a 2.00% redemption fee on shares held less than 30 days. Performance data does not reflect the redemption fee. If reflected, returns would be lower. The fund imposes neither a maximum sales charge on purchases nor a maximum deferred sales charge.

**The advisor has contractually agreed to waive fees through January 2, 2020.


Investments in micro capitalization companies may involve greater risks, as these companies tend to have limited product lines, markets and financial or managerial resources. Micro cap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. Equity market. One cannot invest directly in an index.

Fund Holdings as of March 31, 2021

Company Symbol Market Value Shares % of Net Assets
VOYAGER DIGITAL LTD VYGVF $7,800,000.00 300,000 7.61%
CODEXIS INC CDXS $3,891,437.34 170,006 3.79%
OPTIMIZERX CORP OPRX $3,646,158.75 74,793 3.56%
OMEROS CORP OMER $3,095,420.00 173,900 3.02%
IDENTIV INC INVE $2,418,060.00 211,000 2.36%
SHARPSPRING INC SHSP $2,294,640.00 143,415 2.24%
PORCH GROUP INC PRCH $2,203,650.00 124,500 2.15%
ALPHATEC HLDGS INC ATEC $2,123,755.00 134,500 2.07%
INSPIRED ENTMT INC INSE $2,114,366.84 227,596 2.06%
THUNDERBIRD ENTMT GROUP INC TBRD $2,039,744.00 560,000 1.99%
USA TECHNOLOGIES INC USAT $2,011,152.00 171,600 1.96%
QUMU CORP QUMU $1,938,092.00 286,700 1.89%
IMPINJ INC PI $1,888,084.00 33,200 1.84%
POWERFLEET INC PWFL $1,887,303.78 229,599 1.84%
ESPORTS ENTMT GROUP INC GMBL $1,816,210.00 121,000 1.77%
USIO INC USIO $1,797,600.00 280,000 1.75%
SOHU COM LTD SOHU $1,713,480.00 109,000 1.67%
DIAMEDICA THERAPEUTICS INC DMAC $1,692,750.00 185,000 1.65%
US XPRESS ENTERPRISES INC USX $1,680,250.00 143,000 1.64%
CELCUITY INC CELC $1,632,350.88 113,832 1.59%
IMMERSION CORP IMMR $1,620,686.92 169,174 1.58%
HUDSON GLOBAL INC HSON $1,608,656.20 96,907 1.57%
ZOVIO INC ZVO $1,563,100.00 385,000 1.52%
ICAD INC ICAD $1,547,150.20 72,910 1.51%
SRAX INC SRAX $1,509,884.34 318,541 1.47%
SUPER LEAGUE GAMING INC SLGG $1,478,400.00 210,000 1.44%
TELA BIO INC TELA $1,415,500.00 95,000 1.38%
NEUBASE THERAPEUTICS INC NBSE $1,367,150.00 185,000 1.33%
HARROW HEALTH INC HROW $1,349,250.75 199,889 1.32%
BIGG DIGITAL ASSETS INC BBKCF $1,260,000.00 700,000 1.23%
ESPERION THERAPEUTICS INC ESPR $1,228,590.00 43,800 1.20%
LANTRONIX INC LTRX $1,128,237.03 246,879 1.10%
CYTOSORBENTS CORP CTSO $1,085,000.00 125,000 1.06%
PRECISION BIOSCIENCES INC DTIL $1,055,700.00 102,000 1.03%
AKOUOS INC AKUS $1,054,120.00 76,000 1.03%
ATHERSYS INC ATHX $1,044,000.00 580,000 1.02%
KRYSTAL BIOTECH INC KRYS $1,032,336.00 13,400 1.01%
PARK CITY GROUP INC PCYG $1,032,333.38 168,958 1.01%
IDEAYA BIOSCIENCES INC IDYA $963,500.00 41,000 0.94%
CEVA INC CEVA $923,106.00 16,440 0.90%
TRANSPHORM INC TGAN $908,600.00 140,000 0.89%
REEDS INC REED $900,900.00 770,000 0.88%
SCOUT GAMING GROUP 6Y2 $897,595.50 160,000 0.88%
IZEA WORLDWIDE INC IZEA $867,100.00 230,000 0.85%
ARBUTUS BIOPHARMA CORP ABUS $865,800.00 260,000 0.84%
ARCTURUS THERAPEUTICS HLDGS ARCT $834,260.00 20,200 0.81%
AERIE PHARMACEUTICALS INC AERI $823,807.00 46,100 0.80%
INTRICON CORP IIN $820,480.00 32,000 0.80%
TILLYS INC TLYS $801,456.00 70,800 0.78%
LEJU HLDGS LTD LEJU $693,746.43 280,869 0.68%
RAFAEL HLDGS INC RFL $663,869.60 16,630 0.65%
DIGITAL TURBINE INC APPS $578,592.00 7,200 0.56%
FIRST INTERNET BANCORP INBK $564,208.45 16,015 0.55%
WAITR HLDGS INC WTRH $556,700.00 190,000 0.54%
SOLITARIO ZINC CORP XPL $448,956.00 540,000 0.44%
WESTERN COPPER & GOLD CORP WRN $441,000.00 350,000 0.43%
EXPLORATION AZIMUT INC AZMTF $411,301.20 530,000 0.40%
CHROMADEX CORP CDXC $392,280.00 42,000 0.38%
MESOBLAST LTD MESO $375,458.00 45,400 0.37%
IMV INC IMV $332,000.00 100,000 0.32%
MAMAMANCINI HLDGS INC MMMB $262,398.00 86,600 0.26%
SCORE MEDIA TSCRF $214,402.80 8,000 0.21%
CASTLIGHT HEALTH INC CSLT $205,360.00 136,000 0.20%
BJS RESTAURANTS INC BJRI $116,160.00 2,000 0.11%

Fund holdings and sector allocations are subject to change and are not a recommendation to buy or sell any security.

By clicking on the company names, you will be leaving the Jacob Funds website and will be entering a third-party website. Jacob Funds is not responsible for, nor can guarantee, the accuracy of any information contained on a third party site.


Investments in micro capitalization companies may involve greater risks, as these companies tend to have limited product lines, markets and financial or managerial resources. Micro cap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. Equity market. One cannot invest directly in an index.

Please refer to the linked fund fact sheet for a current breakdown of the fund's sector allocation.

Sectors as of August 31, 2017

Sector Name %
Common Stocks 92.3
Money Market Fund   6.9
Other Assets in Excess of LIabilities   0.7

 

Fund holdings and sector allocations are subject to change and are not a recommendation to buy or sell any security.


Investments in micro capitalization companies may involve greater risks, as these companies tend to have limited product lines, markets and financial or managerial resources. Micro cap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. Investments in foreign securities involve greater volatility and political, economic and currency risks, and differences in accounting methods. These risks are greater in emerging markets.

Cash flow measures the cash generating capability of a company by adding non-cash charges (e.g. depreciation) and interest expense to pretax income.

The Russell Microcap Growth Index measures the performance of the microcap growth segment of the U.S. Equity market. One cannot invest directly in an index.

JACOB FUNDS




Please note that the Jacob Funds referred to in this website are offered and sold only to United States residents, and the information on this website is intended only for such people. The Fund is not offered for sale in countries other than the U.S. and its territories. This website should not be considered a solicitation to buy or an offer to sell shares of the Jacob Funds in any jurisdiction where it would be unlawful under the securities law of that jurisdiction.

Each fund's investment objectives, risks, charges, expenses and other information are described in the prospectuses, which must be read and considered carefully before investing. You may download the prospectus or obtain a hard copy by calling 888-522-6239.

Mutual fund investing involves risk. Principal loss is possible.

There are risks inherent in investing in the Internet area, particularly with respect to smaller capitalized companies and the high volatility of internet stocks. Small- and Medium-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Investments in foreign securities involve greater volatility and political, economic and currency risks and differences in accounting methods. The Internet Fund may invest in debt securities which typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. Investments in micro-capitalization companies may involve greater risks, as these companies ten to have limited product lines, markets and financial or managerial resources. Microcap stocks often also have a more limited trading market, such that the Adviser may not be able to sell stocks at an optimal time or price. In addition, less frequently-traded securities may be subject to more abrupt price movements than securities of larger capitalized companies. The Small Cap Growth Fund invests in smaller companies, which involve additional risks, such as limited liquidity and greater volatility.

Effective 12/31/20 the Jacob Micro Cap Growth Fund was renamed as the Jacob Discovery Fund.

Jacob Funds are distributed by Quasar Distributors, LLC.