Manager Commentary as of 6/30/2010

• The second quarter was not good for equity markets.  Speaking recently with friends in Bangkok, I heard the following comparison.  The Asian currency crisis, which started in Bangkok, was called the “Tom Yum Goong contagion” (Tom Yum Goong is a Hot and Sour Thai soup), the subprime mortgage crisis was branded the “hamburger contagion” and the current euro-region crisis has been labeled the “Gyros crisis”.  Regardless of the terminology, it seems that globalization is allowing financial pandemics to flow through financial markets faster than flu through an elementary school.

• All of the major market indices finished down in the quarter, including the Fund’s benchmark, the Russell Microcap Index which returned -8.35%. In comparison the Westcore Micro-Cap Opportunity Fund returned -5.67% for the same time period. Most of the damage came in June with the benchmark down 8.35%, and the Fund off 7.14%.  Although neither the Fund nor the index had material exposure to Greece or the rest of Europe, we believe sentiment in the midst of a “flight to quality” affected unrelated securities.  Or, put more succinctly, we believe the baby was being thrown out with the bath water.

• Our models, however, worked well in the quarter leading to outperformance in 9 of 13 sectors. Most of the factors in our models were predictive, including cash flow valuation with the least expensive stocks outperforming the most expensive stocks.

• The Fund’s best performing sectors relative to the benchmark were Interest Rate Sensitive, Technology and Capital Goods. The sectors that performed worst relative to the benchmark were REITs, Consumer Staples and Transportation.

• Each year at the end of June, the Russell Indexes rebalance making the end of the second quarter interesting for portfolios structured on models, such as the Westcore Micro-Cap Opportunity Fund.  To avoid any issues with Russell’s rebalance, we try to rebalance earlier in the month of June and that was our strategy this year.  We believe our models are working well.  Currently the Fund holds a significant position in high cash flow yield companies – the type of companies which have historically performed well over time.  We believe the Fund is positioned to take advantage of the market rebound once the rest of the market realizes that the “Gyros crisis” is not the end of the World, Europe, or even Greece.

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)