Manager Commentary as of 6/30/2010  

• The second quarter of 2010 proved to be bittersweet.  On the one hand, the Fund’s absolute returns were negative.  On the other hand, we provided some downside protection to our shareholders with better results than the benchmark Russell 2000 Value Index.  In the quarter the Westcore Small-Cap Value Fund returned -8.74% while the Russell 2000 Value Index returned -10.59%.  Previously, we have talked about the length of the low-quality, low share-price, “junk” rally that began in March 2009 and the fact that it was getting “long in the tooth” by historical standards.  The duration of such rallies has typically been 10 months.  This rally came to an end in late April/early May as the market began rewarding companies that have what we believe are higher-quality characteristics.  Our focus on companies with these characteristics helped contribute to our relative outperformance during the second quarter.

• Leading contributors to the Fund’s performance relative to the benchmark in the second quarter were the energy, interest rate sensitive and medical/healthcare sectors.  SM Energy Company, formerly St. Mary’s Land & Exploration Company, is an independent energy company.  In the quarter, SM continued to execute its strategic plan that focuses more on shale oil and gas development.  The company’s position in the Eagle Ford Shale in south Texas has been a major driver of value and promising drilling results there appear to have caused the market to re-evaluate SM’s future cash flow potential.  Within the medical/healthcare sector, the Fund’s standout performer in the quarter was Biovail Corporation.  This specialty pharmaceutical company saw share price appreciation following reported first quarter results that bested market expectations and the announcement of a merger with Valeant Pharmaceuticals.  We believe the merger provides Biovail with greater product and market diversity, substantial cost reduction opportunities, and an increased product pipeline.

• The technology, transportation and REITs sectors provided the most significant headwinds to the Fund’s performance relative to the index in the second quarter.  The Fund’s underperformance in the transportation and REITs sectors was due in large part to our underweight positions in these sectors.  Within the technology sector, concerns over the sustainability of the global recovery caused Belden Inc., an industrial cable products provider, to experience stock price weakness in the quarter.  We believe prospects for Belden remain strong, as demand for its products is showing improvement and the markets in which it competes appear to have remained rational.  Although the Fund’s interest rate sensitive sector holdings outperformed the benchmark, the sector was generally quite weak in the quarter.  For example, shares of Whitney Holding Corp., a bank holding company engaged in banking activities in the Gulf Coast region, were negatively impacted as investors were apparently concerned that economic difficulties resulting from the oil spill in the Gulf would adversely impact its loan portfolio.  While we continue to have confidence in Whitney’s management, the economic effects on the Gulf region could be quite pronounced and extended in duration.  We will continue to monitor this situation closely.

• Investors appear increasingly skeptical of the vibrancy of the U.S. and global economic recovery as a number of economic indicators have flashed caution signals.  Car and housing sales declined after government stimulus programs expired, job creation remains anemic and persistently high unemployment rates continue to point to a consumer that cannot be expected to be the engine that will drive strong GDP growth.  While we believe this may prove to be a typical correction from both a market and economic standpoint, we are monitoring the situation closely.  We believe that over the next year, companies with strong fundamentals will be rewarded by investors.

• As always, we want to thank our shareholders for their confidence and patience in these difficult market conditions.