Forward International Small Companies Fund

Class A

Investment Strategy

Updated as of:
June 30, 2008

Find the best 100 small stocks in the international markets

	use a "bottom-up" approach to try to identify international small cap companies with outstanding investment potential
	quantitative screen help identify international small cap companies that are experiencing an acceleration of relative profit growth that is not yet fully recognized by the market
	company strengths and weaknesses are identified and then meetings are held with small company management teams to fully understand business model
	the team then works to create an investment portfolio of approximately 100 stocks

Investment Process

Identify international small cap companies with value stock characteristics

	we start with a universe of over 8,000 international companies with market capitalizations of less than $3 billion
	we employ a series of screens to identify approximately 1,500 companies that meet our value criteria
	we then review that list to identify those companies that have strong business models

Perform rigorous quantitative screening to narrow down investment universe

use a variety of data resources to analyze the finances of each prospective investment

divide companies into one of four groups:

emerging growth - companies which might not have a strong track record but are poised to enter a period of significant growth
established growth - companies with a consistently high rate of earnings growth and visible prospects going forward
defensive growth - companies often belonging to mature sectors but which are undergoing a transformation leading to a temporary earnings acceleration
cyclical growth - companies experiencing temporary earnings acceleration, mostly driven by macro-economic trends

determine "Price to Appraised Value" (PAV), "Pictet Profit Ranking" (PPR) or another customized valuation measures based on companies industry and style

rank each company by effectiveness of using profits to create more profits

Use qualitative screening to further understand prospective investments

	analyze the sector that each company is in to better understand company's competitive position
	determine and rank company's strength of organization and management

Primary research is then conducted to understand the goals of each company

meetings are held with managers at the company to understand business goals, determine new products and identify competitive advantages

A portfolio is created with approximately 100 international small companies

	only Pictet's top-ranked companies are included in the Fund
	country and sector allocations are reviewed to make sure sectors or countries with negative outlooks are reduced in the portfolio

		Class: A Change to: Institutional Change to: Investor

PDF Fund Fact Sheet

Overview

Category:	Int’l Small Capitalization
Ticker Symbol:	FFIAX
CUSIP:	349913764
Benchmark:	MSCI EAFE Small Cap Index
Inception:	May 2, 2005
Net Assets:	$4.1 Million
Load Fee:	5.75%
Dealer Concession:	5.00%¹
Trail:	0.25%²
Gross Expense Ratio:	1.73%
Net Expense Ratio:	1.73%

Minimum Investment

Initial:	$4,000
Initial–eDelivery:	$2,000
Initial–Automatic Investment Plan:	$500

Statistics

Price/Book:*	3.37
Forward P/E:*	13.39
EPS Growth Rate:*	27.83%
Long-Term Debt-to-Equity:*	16.69%
Weighted Avg. Market Capitalization:*	$2.4 Billion
Avg. Capitalization:*	$2.3 Billion
Beta:	0.96
R-Squared:	0.93
Number of Holdings:	125
Annualized Turnover:	95.04%

¹Maximum concession allowed – see prospectus for more details.

²Additional maximum of 0.20% may be allowable under the Shareholder Services Plan.

*Data refers to the Fund’s holdings and not to the Fund itself.

Price/Book Ratio and Price/Earnings represent equity securities within the Fund's portfolio, and are not intended to demonstrate Fund growth income earned by the Fund, or distributions made by the Fund.

EPS Growth Rate represents current year consensus estimates weighted by distribution of the portfolio.

Prospectus

Performance

Site Map

About Forward : Forward Funds : How To Invest : Research : Account Login

Prospectus : Performance : Contact Us : Privacy : Site Map