Manager Commentary as of 6/30/2010

• We are pleased that the Westcore MIDCO Growth Fund outperformed its benchmark the Russell Midcap Growth Index in the second quarter with a return of -9.41% versus the -10.20% return of the index.

   
• Equity markets struggled in the second quarter as investors digested the large gains off the March 2009 lows.  Sovereign debt crises, growing state and federal budget deficits, a major oil spill in the Gulf of Mexico and an apparent economic soft patch all contributed to the weak performance.  Despite what appears to be moderation of economic growth, we continue to find innovative companies that we believe can succeed in a slower growth environment. 

• In the second quarter of 2010, the top three contributing sectors relative to the benchmark were information technology, energy and consumer staples. For the second quarter in a row, our best performing stock was Netflix Inc., in the consumer discretionary sector.  Netflix’s prolific “Watch Instantly” streaming service continues to drive strong margins and subscriber growth.  Akamai Technologies Inc. is a provider of services for accelerating and improving the delivery of Internet content and applications.  This information technology sector holding outperformed as it continued to benefit from increased demand for video and applications delivered over the Internet.   

• The Fund’s three largest detractors from performance relative to the benchmark in the quarter were the financials, health care and materials sectors.  Financials sector holding Waddell & Reed Financial Inc. was the Fund’s worst performing stock in the quarter.  This investment management company suffered from poor performance in its largest investment strategy which led us to sell the position during the quarter.  In the health care sector, King Pharmaceuticals Inc. underperformed as concerns arose over the growth of this pharmaceutical manufacturer’s existing product line and management’s ability to develop the company’s new product portfolio.  We believe recent pressure has substantially undervalued the company and see a favorable opportunity for the company’s new product line.  We are confident in management’s ability and see a delay in the development of this product line as temporary.     

• Of note, as the quarter progressed, we found valuations increasingly attractive in the energy sector.  The BP oil spill drove significant stock weakness across the sector, and we used this as an opportunity to add to existing holdings and initiate new positions in attractive companies.  As we enter the second half of 2010, we see attractive growth prospects in the energy sector.     

• We believe our in-depth research focus at the company level helps us identify good growth opportunities despite a potentially slower growth environment.  As of June 30, 2010, the Fund’s primary overweight positions were in the information technology and industrials sectors and its largest underweights were in the consumer staples and consumer discretionary sectors. 
  
  
• As always, we thank you for your continued investment.
  

The performance data quoted represents past performance and does not guarantee future results. Investment return and principal value will vary, and shares, when redeemed, may be worth more or less than their original cost. To obtain current performance as of the most recent month-end, please call 800.392.CORE (2673) or visit the Performance tab.

Stock Performance (3 months ended 6/30/2010)