The Heartland Value Fund (HRTVX) achieved a 10.04% gain in the third quarter, nearing the Russell 2000® Value Index's 12.60% return. The fund consistently outperforms its benchmark across various timeframes, demonstrating a robust strategy for small-cap value investors. This positive trend emerges as small-cap S&P 600 Index companies begin to see earnings rebound, aligning with a changing monetary policy landscape.

China's September Consumer Price Index (CPI) remained in deflation, primarily due to falling food prices, despite an increase in non-food inflation. While economic data suggests the need for further monetary easing, the People's Bank of China might delay action until after a potential meeting between President Xi and former US President Trump, reserving policy flexibility in case trade discussions prove unfavorable. Additionally, the lower-than-expected third-quarter inflation could lead to a more supportive GDP deflator in the upcoming GDP report, potentially increasing the forecasted 4.5% year-on-year growth.

Caterpillar is undergoing a significant transformation, shifting from a traditional heavy equipment manufacturer to a diversified leader in energy, infrastructure, and technology solutions. This evolution, supported by a strong backlog and increasing demand from data centers, ensures stable cash flows and robust earnings. The company's commitment to shareholder value is evident through strong free cash flow, consistent dividend growth, and share repurchases. Despite market challenges like tariffs and ESG concerns, Caterpillar's foundational strength positions it favorably for future growth over the next 12-24 months.