Nicholas Fund, Inc.

NICSX

Multi-cap Growth

Nicholas Fund, Inc. is our flagship fund with its long history beginning in 1969. The lead portfolio manager is Albert (Ab) O. Nicholas, CFA. Ab launched Nicholas Fund two years after he started Nicholas Company, Inc. Nicholas Fund utilizes a multi-cap growth strategy that can allow the portfolio manager to pursue the best growth opportunities in the market without being constrained by arbitrary market capitalization guidelines.

While Ab views the entire market spectrum as his universe, he has long focused on stocks with mid and small capitalizations. Early on, Ab recognized the potential for smaller sized companies to offer greater growth prospects than larger cap stocks, and greater opportunity to identify companies that Wall Street may have overlooked. Nicholas Fund offers a mix of companies with varying capitalizations, and the mix can change as stock valuations change. A critical component to the Fund’s style is buying stocks at valuations that offer the best opportunity over the long-run and that we believe may provide a cushion against declining stock prices. Nicholas has long been a proponent for buying stocks at valuations that are affordable relative to their long-term potential. We believe the Fund’s history suggests this approach can produce more consistent, risk-adjusted returns over time.

  • Snapshot
  • Objective
  • Performance
  • Portfolio Manager
  • Distribution History
  • Documents &
    Forms

Investment Approach

Nicholas Fund pursues long-term capital growth through a diversified stock portfolio of small- to large-sized companies with capitalizations generally between $1 to $100 billion. The Fund is typically benchmarked against the Standard & Poor’s 500 Index. 


Fund Facts

Co Portfolio Manger: Albert (Ab) O. Nicholas
Co Portfolio Manger: David O. Nicholas
Style: Multi-cap Growth
Fund Inception: 07/14/1969
Fund Assets (millions): $3,218.6*
Number of Holdings: 41*
* as of 06/30/2016  
Minimum Initial Investment: $500
Fiscal Year-End: March 31
Prospectus Date: July
Cusip: 653735100
Ticker NICSX

 

Characteristics*

Weighted Avg Forward P/E Capped: 15.36x
Weighted  Avg Trailing P/E Capped:  16.91x
Weighted Median Mkt Cap (million):  $26,222.6
Weighted Avg Mkt Cap (million):  $58,564.6
Weighted  Harmonic Avg. Price/Book: 3.55x
Turn Over Rate: (03/31/16)(1) 28.84%
Standard Deviation: 10-Yr(2) 15.64%
Sharpe Ratio: 10-Yr(2) 0.57   

 

Sector Diversification*

 

 

Top Ten Holdings*

Holdings % Net Assets
Walgreens Boots Alliance, Inc.   4.14%
Thermo Fisher Scientific Inc.  3.79%
Aon plc 3.75%
Chubb Limited   3.70%
Gilead Sciences, Inc.  3.63%
LKQ Corporation   3.51%
International Business Machines Corporation  3.30%
Affiliated Managers Group, Inc.  3.30%
AMERCO    3.28%
Time Warner Inc.  3.14%
Total 35.54%

(1) Annualized
(2) Average Annual

* Data as of 06/30/16 unless stated otherwise.


 

Morningstar Ratings

  Rating # of Funds
Overall 1483
3 Year 3 star ranking 1483
5 Year 5 stars 1289
10 Year 5 star 931

Morningstar Category: Large Growth
Source: Morningstar, as of June 30, 2016.
The Overall Morningstar Rating™ for a fund is derived from a weighted average
of the risk-adjusted performance figures associated with its three-,five- and ten year (if applicable) Morningstar Rating™ metrics. (3)

(3) © [2016] Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or loses arising from any use of this information. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating ™ (based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance, including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) One cannot invest directly in an index. Fund holdings and/or sector weightings are subject to change at any time and are not recommendations to buy or sell any security. 

Past performance does not guarantee future results.

 

Investment Objective

Nicholas Fund, Inc. strives to increase the value of your investment over the long-term (“long-term growth”) by investing in a diversified portfolio that includes primarily medium- and large-sized companies. Small companies also may be considered. Our goal is to find what we believe are great companies and hold them for the long-term.

Investment Policies & Considerations

Nicholas Fund’s management team believes that company selection is a key to providing superior returns over time. Our goal is to find growth companies that are reasonably priced by identifying stocks that have low price-to-earnings ratios relative to their earnings growth or those that are attractively priced relative to book value. Above average earnings growth and strong future growth potential are important characteristics in the companies we consider. When selecting portfolio holdings, from among the stocks that meet our criteria, we often take a contrary view and choose lesser known or out-of-favor companies as they generally offer the best values. Some of the factors we consider in assessing companies include:

  • Growth rate of 10% or better
  • Consistent earnings
  • Return on equity (ROE) of 15% or an improving ROE
  • Debt to total capitalization of less than 50%
  • A price to earnings ratio lower than two times the growth rate
  • An enduring franchise or brand
  • Honest, capable management
  • Significant management ownership of stock
  • Long-term and short-term business momentum


It is our strong conviction that superior long-term results are achieved by minimizing capital losses in adverse markets. We do not attempt to forecast short-term market swings, but work to preserve gains and minimize losses using long-term, fundamental valuation techniques. Our portfolio turnover is moderate as our goal is to find, and hold, great companies. However, if a company’s stock is not meeting our expectations, or has become over valued, we will sell it.

At Nicholas, our watchword is patience. We believe it is a key to superior long-term results. 

  •  Quarter-End Performance
  • Month-End Performance
  • Quarterly Performance Presentation

As of June 30, 2016

Average Annual Returns

Fund 3 Month YTD  1 Year  3 Year 5 Year 10 Year
Nicholas Fund (NICSX) 1.87% 0.35% -8.53% 10.96% 12.30% 8.97%
Nicholas II - Class I (NCTWX) -0.28% 0.08% -5.72% 10.02% 9.69% 7.86%
Nicholas II - Class N (NNTWX) -0.33% -0.04% -6.04% 9.66% 9.32% 7.50%
Nicholas Limited Edition - Class I (NCLEX) 2.88% 2.70% -3.94% 7.58% 8.03% 8.16%
Nicholas Limited Edition - Class N (NNLEX) 2.75% 2.51% -4.31% 7.20% 7.65% 7.81%
Nicholas Equity Income Fund (NSEIX) 3.62% 6.30% 0.34% 8.75% 9.97% 9.65%
Nicholas High Income Fund - Class I (NCINX) 2.75% 5.13% -1.88% 2.13% 4.30% 5.14%
Nicholas High Income Fund - Class N (NNHIX) 2.64% 4.98% -2.25% 1.74% 3.94% 4.83%
             

 

  1 Year 5 Year 10 Year 7-Day Yield 7-Day
Effective
Yield
 
Nicholas Money Market (NICXX) 0.00% 0.00% 0.96% 0.00% 0.00%  

 

The 7-Day Yield quotation, rather than the Total Return quotation, more closely reflects the current earnings of the Fund.

Performance data quoted represents past performance and 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.  Performance current to the most recent month end may be lower or higher than the performance quoted.

As of July 31, 2016

Average Annual Returns

Fund 3 Month YTD  1 Year  3 Year 5 Year 10 Year
Nicholas Fund (NICSX) 2.84% 2.71% -8.67% 9.60% 13.45% 9.24%
Nicholas II - Class I (NCTWX) 3.72% 3.72% -3.93% 9.43% 11.70% 8.42%
Nicholas II - Class N (NNTWX) 3.65% 3.52% -4.27% 9.05% 11.31% 8.05%
Nicholas Limited Edition - Class I (NCLEX) 7.20% 7.94% 0.92% 7.25% 9.88% 8.90%
Nicholas Limited Edition - Class N (NNLEX) 7.10% 7.72% 0.55% 6.88% 9.50% 8.56%
Nicholas Equity Income Fund (NSEIX) 5.62% 9.57% 2.56% 8.29% 11.73% 9.96%
Nicholas High Income Fund - Class I (NCINX) 3.28% 7.37% 0.58% 2.28% 4.57% 5.33%
Nicholas High Income Fund - Class N (NNHIX) 3.16% 7.22% 0.25% 1.92% 4.19% 4.98%
             

 

  1 Year 5 Year 10 Year 7-Day Yield 7-Day
Effective
Yield
 
Nicholas Money Market (NICXX) 0.00% 0.00% 0.92% 0.00% 0.00%  

 

The 7-Day Yield quotation, rather than the Total Return quotation, more closely reflects the current earnings of the Fund.

Performance data quoted represents past performance and 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.  Performance current to the most recent month end may be lower or higher than the performance quoted.

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Fund's Quarterly Performance Presentation

Quarterly Performance Presentation

 

Nicholas Fund's Expense Ratio: 0.72%
Nicholas II – Class I's Expense Ratio: 0.61%
Nicholas II – Class N's Expense Ratio: 0.96%
Nicholas Limited Edition – Class I's Expense Ratio: 0.86%
Nicholas Limited Edition – Class N's Expense Ratio: 1.21%
Nicholas Equity Income Fund's Expense Ratio: 0.72%
Nicholas High Income Fund – Class I's Expense Ratio: 0.71%(1)
Nicholas High Income Fund – Class N's Expense Ratio: 1.06%(1)
Nicholas Money Market Fund's Expense Ratio: 0.51%

The Adviser has agreed to voluntarily absorb management fees of 0.30% of Nicholas Money Market Fund's average net assets on an annual basis during the fiscal year ending December 31, 2016. This absorption continues today; however, the Adviser may decrease or discontinue it at any time.  The most recent expense ratios can be found in each funds current annual or semiannual report.

(1)The expense ratio may not correlate to the "Ratio of expenses to average net assets" provided in the Financial Highlights in the Fund's Annual or Semiannual Report. The information in the Financial Highlights reflects the operating expenses of the Fund and does not include Acquired Fund Fees and Expenses. "Acquired Fund Fees and Expenses" are those expenses incurred indirectly by the Fund as a result of acquiring investments in shares of one or more other investment companies.

Nicholas Money Market Fund has fee waivers in effect. Investment performance reflects these fee waivers. In the absence of such waivers, total returns would be reduced.

 

Albert O. Nicholas, CFA is the lead portfolio manager for Nicholas Fund, Inc.
The Co-Portfolio Manager is David O. Nicholas, CFA

 

 

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Albert O. Nicholas, CFA

Chairman and Chief Executive Officer, Portfolio Manager
Industry experience: 61 years
Nicholas Company Tenure: 49 years
Lead Portfolio Manager - Nicholas Fund, Inc.
Co-Portfolio Manager - Nicholas Equity Income Fund, Inc

 

Ab Nicholas has always had great interest in analyzing companies and the stock market. He considers himself an investment analyst first and foremost, but he also has been recognized for his skill as a portfolio manager. His extensive tenure studying the markets and investments through numerous market cycles has fortified his belief in the benefit of investing in stocks for the long-term.  Ab’s experience offers tremendous insight and value when assessing the challenges of today’s markets.


Ab began his career with Northwestern National Insurance Company, where he worked as an investment analyst. He also spent several years at Marshall and Ilsley Bank.


Ab founded the Nicholas Company in 1967 with the idea of offering his investment philosophy and process to a wider group of investors.  He launched the flagship Nicholas Fund in 1969, in order to give individual investors greater access to a diversified portfolio of stocks through a mutual fund.  The Nicholas Fund has been acknowledged over the years by publications such as Forbes, Money Magazine and the Wall Street Journal.


Ab is the lead managers of the Nicholas Fund handling the day-to-day investment decisions and he is the co-manager of the Nicholas Equity Income Fund.


Ab earned a Bachelor’s in Economics at the University of Wisconsin at Madison, while playing guard for the Wisconsin Badger basketball team. After spending two years in the military, he returned to the University for an M.B.A. in Finance and Investments. He is a member of the Milwaukee Investment Analysts Society, and a Chartered Financial Analyst.

 


 

David O. Nicholas, CFA

Chief Investment Officer and Portfolio Manager
Industry experience: 33 years
Nicholas Company Tenure: 30 years
Lead Portfolio Manager - Nicholas II, Inc. and Nicholas Limited Edition, Inc.
Co-Portfolio Manager - Nicholas Fund, Inc.

 

Dave Nicholas joined Nicholas Company as an investment analyst in 1986.  His current responsibilities include Portfolio Manager and Chief Investment Officer.   Dave’s focus has been primarily on small and mid-capitalization companies that meet the criteria for Nicholas II and Nicholas Limited Edition Funds.  Dave’s approach is aligned with the Nicholas core investment philosophy and process, while adjusting it to meet the characteristics of small and mid-capitalization growth companies.  Core elements to the philosophy include identifying companies with secular growth capabilities, consistent earnings growth, strong balance sheets and solid management teams.  Dave also shares Ab’s preference for non-consensus strategies when market opportunities arise.

Dave began his career with First Wisconsin Bank, now known as U.S. Bank, where he worked as an analyst before joining Nicholas Company.

Dave is the lead manager of the Nicholas II and Nicholas Limited Edition Funds, our mid-cap growth and small-cap growth strategies.  He also serves as Chief Investment Officer for Nicholas Company.

Dave earned a B.B.A. in Finance from the University of Wisconsin - Madison and completed his M.S. in Finance at the University of Wisconsin - Milwaukee, where he is a member of the University’s Business School Advisory Board.   Dave is a member of the Milwaukee Investment Analysts Society, and a Chartered Financial Analyst.


 


 

NOTE: None of the distributions included income from U.S. Treasuries, U.S. Agencies, state government or municipalities.
 

Distribution Year

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Distribution History 2016

Pay Date Net
Investment Income
Short Term
Capital Gains
Long Term
Capital Gains
Total
Distribution
06/09/2016 0.1175 0.0000 0.5989 0.7164
Distribution Year
  • 2016

Please print, complete and mail to the appropriate address:

Nicholas Family Of Funds
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701

Overnight Express:

Nicholas Family Of Funds
c/o U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, WI 53202


Order By Telephone

1-800-544-6547

Automated transactions are available 24 hours a day, 7 days a week.

To speak to a representative, call Monday - Friday, from 8am - 7pm, Central Time.

Shareholders calling from outside the U.S. may call collect, 414-765-4124, Monday - Friday, from 8am -7pm, Central Time.



The Nicholas Funds are offered only to United States residents, and information on this site is intended only for such persons. Nothing on this web site should be considered a solicitation to buy or an offer to sell shares of any Nicholas Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction. 

An investment in the Money Market Fund, Inc. is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.

Please refer to each prospectus for important information about each investment company, including investment objectives, risks, charges and expenses. 

Mutual fund investing involves risk; principal loss is possible. Small- and medium-capitalization companies tend to have limited liquidity and greater price volatility than large-capitalization companies. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities such as limited liquidity and great volatility. Investment by the Funds in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. 

Past performance does not guarantee future results.

Diversification does not assure a profit nor protect against loss in a declining market.

Glossary of terms   |   Privacy & Security

Nicholas Funds are distributed by Quasar Distributors, LLC

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