Source Capital, Inc.

Objective:

Source Capital, Inc. (SOR) seeks long-term capital growth by investing primarily in small and mid-cap stocks.

  • Buy superior businesses at reasonable prices
  • Consistent disciplined philosophy since fund inception
  • Portfolio weightings reduces benchmark correlation
  • Concentrated portfolio
  • Very low portfolio turnover

Philosophy:

The Fund's managers believe that long-term ownership of superior companies produces high shareholder returns. These businesses typically exhibit outstanding returns on capital combined with fortress balance sheets. Their business models are easily understood, benefit from strong market positions or other competitive strengths, and are executed by capable management teams. Through a patient approach, the Fund attempts to take advantage of price opportunities or market inefficiencies to periodically acquire the securities of such companies at attractive prices. The Fund's approach does not rely on market or economic forecasts, rather on the selection of individual businesses and a disciplined judgment of the relative attractiveness of the market valuation of those businesses. Due to its bottom up security selection process and relative concentration of holdings, the Fund varies widely from benchmark security and sector weightings.



As of August 31, 2014

Comparative Performance Monthly

Fund/IndexMTDYTD1 Year3 Years**5 Years**10 Years**15 Years**20 Years**
Source Capital4.28%8.00%21.11%20.12%16.94%9.64%10.97%12.27%
Russell 2500 4.94%5.71%21.45%20.31%18.54%10.44%9.70%10.96%
S&P 5004.00%9.89%25.25%20.61%16.88%8.38%4.78%9.53%
NASDAQ4.99%10.57%29.15%22.64%19.26%10.62%4.27%N/A

** Annualized


As of June 30, 2014

Average Annual Returns

Fund/IndexQTRYTD1 Year3 Years**5 Years**10 Years**15 Years**20 Years**
Source Capital (NAV)1.68%7.16%23.42%13.18%19.27%8.89%10.56%12.51%
Russell 2500 3.57%5.95%25.58%15.51%21.63%9.78%9.34%11.42%
S&P 5005.23%7.14%24.61%16.58%18.83%7.78%4.35%9.79%
NASDAQ5.31%6.18%31.17%18.18%20.50%9.00%4.13%N/A

** Annualized


Historical Annual Returns

Source Capital, Inc.*Russell 2500
201330.87%36.80%
201215.55%17.88%
2011-5.20%-2.50%
201026.00%26.70%
200953.00%34.40%
2008-42.80%-36.80%
20076.10%1.40%
20064.30%16.20%
200514.90%8.10%
200419.50%18.30%
200345.70%45.50%
2002-17.10%-17.80%
200124.70%1.20%
20009.60%4.30%
199923.10%24.10%
19985.80%0.40%
199725.40%24.40%
199621.90%19.00%
199520.70%31.70%
19940.60%-1.00%
19936.30%16.60%
199213.30%16.10%
199122.20%46.90%
1990-3.20%-14.90%
198923.90%19.40%
198816.80%22.70%
19871.70%-4.70%
198613.90%12.00%
198528.50%31.90%

* Past performance is not indicative of future performance. The returns shown for Source Capital are calculated at net asset value per share, including reinvestment of all distributions. Since Source Capital is a closed-end investment company and its shares are bought and sold on the New York Stock Exchange, your performance may also vary based upon the market price of the common stock. The Russell 2500 Index consists of the 2,500 smallest companies in the Russell 3000 total capitalization universe. This index is considered a measure of small to mid capitalization stock performance. The Standard & Poor's 500 Stock Index (S&P 500) is a capitalization-weighted index which covers industrial, utility, transportation and financial service companies, and represents approximately 75% of the New York Stock Exchange (NYSE) capitalization and 30% of NYSE issues. This index is considered a measure of large capitalization stock performance. The Nasdaq Composite Index is a market capitalization, price only, unmanaged index that tracks the performance of domestic common stocks traded on the regular Nasdaq market as well as foreign common stocks and ADRs traded on the national market system. These indices do not reflect any commissions or fees which would be incurred by an investor purchasing the stocks they represent. The performance of the Company and of the Averages is computed on a total return basis which includes reinvestment of all distributions. Source Capital is a closed-end investment company. Its shares are traded on the New York Stock Exchange, and the Company is not involved in these transactions. Thus, your performance will also vary based upon the market price of Source Capital's common stock.


As of August 31, 2014

After-Tax Returns

1 Year5 Years10 Years
Per Common Share21.11%16.94%9.64%
Footer

*Past performance is not indicative of future performance. The returns shown for Source Capital are calculated at net asset value per share, including reinvestment of all distributions. Since Source Capital is a closed-end investment company and its shares are bought and sold on the New York Stock Exchange, your performance may also vary based upon the market price of the common stock. The performance of the Company is computed on a total return basis which includes reinvestment of all distributions. After tax performance has been calculated on a total return basis, which combines principal and dividend income changes for the periods shown. Principal changes are based on the difference between the beginning and closing net asset values for the period and assume reinvestment of all dividends and distributions paid. Source Capital is a closed-end investment company. Its shares are traded on the New York Stock Exchange, and the Company is not involved in these transactions. Thus, your performance will also vary based upon the market price of Source Capital's common stock.


Portfolio Structure *

CASH PLUS LIQUIDITY:
6.1%
TOTAL NET ASSETS:
$671 Million
TOTAL SECURITIES IN PORTFOLIO
32



Top Sectors*



Top Holdings*

O'Reilly Automotive   9.3%   Graco
  4.6%
Signet Jewelers
  7.6%   ScanSource   4.2%
WABCO Holdings
  6.1%   Copart
  3.7%
CarMax   5.9%   Knight Transportation
  3.6%
IDEX Corporation
  4.9%   Heartland Express
  3.6%
 
Top 10 Holdings represent 53.4% of Total Net Assets

Portfolio Holdings

Source Capital Audit Committee Charter LLC

Source Capital Nominating and Governance Committee Charter

* As of June 30, 2014. Past performance is not indicative of future performance. The returns shown for Source Capital are calculated at net asset value per share, including reinvestment of all distributions. Since Source Capital is a closed-end investment company and its shares are bought and sold on the New York Stock Exchange, your performance may also vary based upon the market price of the common stock. The Russell 2500 Index consists of the 2,500 smallest companies in the Russell 3000 total capitalization universe. This index is considered a measure of small to mid capitalization stock performance. The Standard & Poor's 500 Stock Index (S&P 500) is a capitalization-weighted index which covers industrial, utility, transportation and financial service companies, and represents approximately 75% of the New York Stock Exchange (NYSE) capitalization and 30% of NYSE issues. This index is considered a measure of large capitalization stock performance. The Nasdaq Composite Index is a market capitalization, price only, unmanaged index that tracks the performance of domestic common stocks traded on the regular Nasdaq market as well as foreign common stocks and ADRs traded on the national market system. These indices do not reflect any commissions or fees which would be incurred by an investor purchasing the stocks they represent. The performance of the Company and of the Averages is computed on a total return basis which includes reinvestment of all distributions. After tax performance has been calculated on a total return basis, which combines principal and dividend income changes for the periods shown. Principal changes are based on the difference between the beginning and closing net asset values for the period and assume reinvestment of all dividends and distributions paid. Source Capital is a closed-end investment company. Its shares are traded on the New York Stock Exchange, and the Company is not involved in these transactions. Thus, your performance will also vary based upon the market price of Source Capital's common stock.


As of December 31, 2011
 
(NAV) 1 Year 5 Years 10 Years
Per Common Share -5.21% 2.07% 6.72%

*Past performance is not indicative of future performance. The returns shown for Source Capital are calculated at net asset value per share, including reinvestment of all distributions. Since Source Capital is a closed-end investment company and its shares are bought and sold on the New York Stock Exchange, your performance may also vary based upon the market price of the common stock. The Russell 2500 Index consists of the 2,500 smallest companies in the Russell 3000 total capitalization universe. This index is considered a measure of small to mid capitalization stock performance. The Standard & Poor's 500 Stock Index (S&P 500) is a capitalization-weighted index which covers industrial, utility, transportation and financial service companies, and represents approximately 75% of the New York Stock Exchange (NYSE) capitalization and 30% of NYSE issues. This index is considered a measure of large capitalization stock performance. The Nasdaq Composite Index is a market capitalization, price only, unmanaged index that tracks the performance of domestic common stocks traded on the regular Nasdaq market as well as foreign common stocks and ADRs traded on the national market system. These indices do not reflect any commissions or fees which would be incurred by an investor purchasing the stocks they represent. The performance of the Company and of the Averages is computed on a total return basis which includes reinvestment of all distributions. After tax performance has been calculated on a total return basis, which combines principal and dividend income changes for the periods shown. Principal changes are based on the difference between the beginning and closing net asset values for the period and assume reinvestment of all dividends and distributions paid. Source Capital is a closed-end investment company. Its shares are traded on the New York Stock Exchange, and the Company is not involved in these transactions. Thus, your performance will also vary based upon the market price of Source Capital's common stock.