Manager Commentary as of 6/30/2010

• We are pleased that the Westcore Select 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 Fund’s top three contributing sectors relative to the benchmark were information technology, consumer discretionary, and energy.  Akamai Technologies Inc. is a provider of services for accelerating and improving the delivery of Internet content and applications.  This information technology sector holding was the Fund’s best performing stock in the quarter as it continued to benefit from increased demand for video and applications delivered over the Internet.  Another strong performer in the information technology sector was Fund holding Dolby Laboratories Inc., a developer of audio and video-encoding technologies.  Similar to last quarter, a cycle of businesses updating PCs and strong worldwide digital TV sales benefitted Dolby.  The Fund’s underweight position in the energy sector, in addition to the relative outperformance of those energy names the Fund did hold, allowed us to outperform the benchmark in this sector.
  
  
• The three largest detractors from the Fund’s performance relative to the benchmark in the quarter were the health care, industrials, and consumer staples sectors.  In the industrials sector, Robert Half International Inc., a provider of staffing services, underperformed as the market grappled with weaker-than-expected professional job growth.  The possibility of an anemic recovery in job growth led us to liquidate this position in the quarter.  The Fund’s underweight position in consumer staples, relative to the benchmark, was a detractor as this sector outperformed during the quarter.  The Fund’s worst performing stock in the quarter was financials sector holding Waddell & Reed Financial Inc.  This investment management company suffered from poor performance in its largest investment strategy which led us to sell the position during the quarter.     

• 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 held overweight positions in the information technology, health care and financial sectors and had underweight positions in the consumer staples, consumer discretionary and materials sectors.  The Fund’s five largest stock positions as of quarter end were Rovi Corporation, Bank of the Ozark’s Inc., Shire plc, Dolby Laboratories Inc., and Waters Corporation. 

• 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)