Change in Lead Portfolio Manager MAIRS & POWER FUNDS TRUST Mairs & Power Balanced Fund Supplement to Prospectus and Summary Prospectus Dated April 30, 2017 Filed pursuant to Rule 497(e) Registration Nos. 333-174574; 811-22563 As part of a succession plan established by Mairs & Power, Inc. (the Adviser ), the investment adviser to the Mairs & Power Balanced Fund (the Fund ), Kevin V. Earley has been named lead portfolio manager of the Fund effective April 1, 2018. Ronald L. Kaliebe, the lead portfolio manager of the Fund, will remain as co-manager of the Fund in preparation for his retirement on June 30, 2019. Mr. Earley has served as co-manager of the Fund since 2015. In addition, Robert W. Thompson has been named as co-manager of the Fund effective April 1, 2018. 1. The Prospectus section entitled Summary Section Portfolio Management and the Summary Prospectus section entitled Portfolio Management are each deleted in their entirety and replaced by the following: Portfolio Management The Fund employs Mairs & Power, Inc. to manage the Fund s investment portfolio. Kevin V. Earley, lead portfolio manager of the Fund since April 1, 2018 and co-manager of the Fund since 2015, is Vice President of the Adviser. Ronald L. Kaliebe, co-manager of the Fund from 2006 until 2013, the lead portfolio manager of the Fund from 2013 to April 1, 2018 and co-manager of the Fund since April 1, 2018, is Senior Vice President, Director of Fixed Income and Director of the Adviser. Robert W. Thompson, co-manager of the Fund since April 1, 2018, is Vice President and Fixed Income Portfolio Manager of the Adviser. 2. The Prospectus section entitled Portfolio Managers is deleted in its entirety and replaced by the following: Portfolio Managers Mark L. Henneman, Chairman and Chief Executive Officer of the Adviser, has been primarily responsible for the dayto-day management of the Growth Fund as lead portfolio manager since July 1, 2013. Prior to such date, he was comanager of the Growth Fund since 2006. Kevin V. Earley, Vice President of the Adviser, has been primarily responsible for the day-to-day management of the Balanced Fund as lead portfolio manager since April 1, 2018. Prior to such date, he was co-manager of the Balanced Fund since January 1, 2015. He was Director and co-manager of Mid- and Large-Cap Value Investments at Nuveen Asset Management, formerly known as US Bank/FAF Advisors, from 1997 to 2012. Ronald L. Kaliebe, Senior Vice President, Director of Fixed Income and Director of the Adviser, has served as comanager of the Balanced Fund since April 1, 2018. Previously, Mr. Kaliebe served as the lead portfolio manager of the Balanced Fund from 2013 to April 1, 2018 and as co-manager of the Balanced Fund from 2006 to 2013. Robert W. Thompson, Vice President and Fixed Income Portfolio Manager of the Adviser, has served as co-manager of the Balanced Fund since April 1, 2018. He was Vice President, Corporate Bonds at Advantus Capital Management from 2003 to 2016. Andrew R. Adams, Executive Vice President, Chief Investment Officer and Director of the Adviser, has been primarily responsible for the day-to-day management of the Small Cap Fund as lead portfolio manager since 2011, and has served as co-manager of the Growth Fund since January 1, 2015. Allen D. Steinkopf, Vice President of the Adviser, has served as co-manager of the Small Cap Fund since January 1, 2015. He was the Senior Manager of Small Cap Equity at Nuveen Asset Management, formerly known as US Bank/FAF Advisors, from 2004 to 2013. Additional information about each portfolio manager's compensation, other accounts managed by the portfolio managers and the portfolio managers' ownership of shares in the Funds that they manage is available in the Funds' SAI. The date of this Supplement is April 2, 2018. Please keep this Supplement with your records.
Filed pursuant to Rule 497(e) Registration Nos. 333-174574; 811-22563 MAIRS & POWER FUNDS TRUST (the Trust ) Mairs & Power Growth Fund Mairs & Power Balanced Fund Mairs & Power Small Cap Fund (the Funds ) Supplement to the Prospectus and Statement of Additional Information ( SAI ) dated April 30, 2017 This supplement serves as notification of the following changes: At a recent meeting of the Board of Trustees (the Board ) of the Trust, the Board approved certain changes relating to the Funds, as described below: 1. Election of Trust Officers Effective as of May 16, 2017, the Board appointed Robert W. Mairs as Secretary of the Trust following the resignation of Jon A. Theobald from his position as Secretary of the Trust and Collyn E. Iblings as Assistant Chief Compliance Officer of the Trust. Mr. Theobald continues to serve as a Trustee of the Trust. The Board determined not to fill the position of Assistant Treasurer, previously held by Ms. Iblings, at this time. All references to information pertaining to Mr. Theobald as Secretary of the Trust and Ms. Iblings as Assistant Treasurer of the Trust are hereby deleted. Accordingly, the Trustee and Officer table beginning on page 16 of the SAI in the section entitled Management of the Funds is deleted in its entirety and replaced with the following: 1
Name (Year of birth) and Address (1) INTERESTED TRUSTEE Position(s) Held with the Trust and Length of Time Served (2) Principal Occupation(s) During Past Five Years Number of Portfolios in Fund Complex Overseen by Trustee Other Directorships Held by Trustee During Past Five Years Jon A. Theobald (1945) Secretary from 2003 to May 2017; Chief Compliance Officer from 2004 to 2012; Trustee since December 2012 Chairman of the Board of the Investment Adviser (January 2015 to present). Chief Executive Officer of the Investment Adviser (2012 to present). President of the Investment Adviser (2007 to 2014). Chief Operating Officer of the Investment Adviser (2007 to 2012). Chief Compliance Officer of the Investment Adviser (2004 to 2012). 3 None DISINTERESTED TRUSTEES Bert J. McKasy (1942) Mary Schmid Daugherty (1958) Trustee since September 2006; Board Chair since December 2014 Trustee since December 2010; Audit Committee Chair since December 2012 Attorney, Lindquist & Vennum, P.L.L.P. (1994 to present). Associate Professor, Department of Finance, University of St. Thomas (1987 to present). 3 None 3 None James D. Alt (1951) Trustee since April 2015; Nominating and Governance Chair since January 2017 Adjunct Associate Professor, University of Minnesota Law School (2007 to present); Retired Partner, Dorsey & Whitney LLP (3) (1984 to 2012). 3 None Patrick A. Thiele (1950) Trustee since April 2015 Retired Chief Executive Officer, PartnerRe Ltd. (2000 to 2010). 3 Director, OneBeacon Insurance Group, Ltd. (2014 to present); Director, PartnerRE Ltd. (March 2016 to present) 2
Name (Year of birth) and Address (1) PRINCIPAL OFFICERS Mark L. Henneman (1961) Position(s) Held with the Trust and Length of Time Served (2) President since December 31, 2014; Vice President from 2009 to 2014 Principal Occupation(s) During Past Five Years President of the Investment Adviser (January 2015 to present). Chief Investment Officer of the Investment Adviser (January 2015 to present). Executive Vice President of the Investment Adviser (2012 to 2014). Vice President of the Investment Adviser (2004 to 2012). Number of Portfolios in Fund Complex Overseen by Trustee N/A Other Directorships Held by Trustee During Past Five Years N/A Ronald L. Kaliebe (1952) Vice President since 2009 Senior Vice President of the Investment Adviser (January 2015 to present). Director of Fixed Income of the Investment Adviser (January 2015 to present). Vice President of the Investment Adviser (2001 to 2014). N/A N/A Andrew R. Adams (1972) Vice President since 2011 Executive Vice President of the Investment Adviser (October 2016 to present). Vice President of the Investment Adviser (2006 to October 2016). N/A N/A Andrea C. Stimmel (1967) Robert W. Mairs (1969) Treasurer since 2011; Chief Compliance Officer from 2012 to 2016 Secretary since May 2017; Chief Compliance Officer and Anti- Money Laundering Compliance Officer since 2017; Assistant Chief Compliance Officer from September 2016 to December 2016 Director of Operations and Treasurer of the Investment Adviser (2008 to present). Chief Compliance Officer of the Investment Adviser (2012 to 2016). Chief Compliance Officer of the Investment Adviser (January 2017 to present). Assistant Chief Compliance Officer of the Investment Adviser (September 2016 to December 2016). General Counsel of the Investment Adviser (2015 to present). Shareholder and Attorney, Gray Plant Mooty (1999 to 2015). N/A N/A N/A N/A 3
Name (Year of birth) and Address (1) Collyn E. Iblings (1978) Position(s) Held with the Trust and Length of Time Served (2) Assistant Chief Compliance Officer since May 2017; Assistant Treasurer from September 2016 to May 2017. Principal Occupation(s) During Past Five Years Assistant Treasurer of the Investment Adviser (September 2016 to May 2017). Mutual Fund Administration Services Manager (2015 to May 2017). Assistant Vice President, Finance, and Compliance Manager (2014 to present). Accounting Manager (2011 to 2014). Number of Portfolios in Fund Complex Overseen by Trustee N/A Other Directorships Held by Trustee During Past Five Years N/A (1) Unless otherwise indicated, the mailing address of each officer and trustee is: W1520 First National Bank Building, 332 Minnesota Street, Saint Paul, MN 55101-1363. (2) Dr. Daugherty and Mr. McKasy served as directors of Mairs and Power Growth Fund, Inc. and Mairs and Power Balanced Fund, Inc. (together, the Predecessor Funds ) prior to the reorganization of the Predecessor Funds into newly formed series of the Trust effective December 31, 2011. Positions listed in this column for trustees and officers prior to 2012 refer to their positions with the Predecessor Funds. Each trustee serves until his or her resignation or mandatory retirement age. Each officer is elected annually and serves until his successor has been duly elected and qualified. (3) Dorsey & Whitney LLP previously served as legal counsel to the Trust through December 2012. 2. Amended and Restated Agreement for Investment Counsel Service ( the Advisory Agreement ) and Termination of the Administration Agreement Following approval by the Board, the Trust and Mairs & Power, Inc. (the Adviser ) amended and restated the Advisory Agreement for the purpose of incorporating the administrative services provided by the Adviser to the Trust and making other related clerical updates, effective June 1, 2017. In connection with the amendment of the Advisory Agreement, the Administration Agreement between the Adviser and the Trust will be terminated effective June 1, 2017. There will be no reduction or modification to the nature or level of services provided by the Adviser to the Funds in connection with the foregoing, and the amount of advisory fees currently payable to the Adviser by each Fund under the Advisory Agreement will not increase. The date of this Supplement is May 31, 2017. Please keep this Supplement with your records. 4
MAIRS & POWER FUNDS Investing for the long-term PROSPECTUS APRIL 30, 2017 - GROWTH FUND (MPGFX) est. 1958 - BALANCED FUND (MAPOX) est. 1961 - SMALL CAP FUND (MSCFX) est. 2011 The Securities and Exchange Commission has not determined if the information in this prospectus is accurate or complete, nor has it approved or disapproved these securities. It is a criminal offense to state otherwise.
TABLE OF CONTENTS Summary Section.....................................................................................1 Mairs & Power Growth Fund..........................................................................1 Mairs & Power Balanced Fund.........................................................................4 Mairs & Power Small Cap Fund........................................................................8 Fund Details........................................................................................12 Mairs & Power Growth Fund.........................................................................12 Mairs & Power Balanced Fund........................................................................12 Mairs & Power Small Cap Fund.......................................................................13 Temporary Defensive Policies All Funds................................................................14 Investment Limitations All Funds.....................................................................14 Disclosure of Portfolio Holdings All Funds..............................................................14 Risks..............................................................................................15 Management and Organization of the Funds..............................................................17 Investment Adviser.................................................................................17 Portfolio Managers.................................................................................17 Shareholder Information..............................................................................18 Pricing of Fund Shares..............................................................................18 Security Valuations.................................................................................18 Purchase of Fund Shares.............................................................................19 Redeeming Fund Shares.............................................................................22 How to Exchange Shares.............................................................................23 Important Information Regarding Telephone and Internet Transactions.........................................24 Redemption Fee (Small Cap Fund).....................................................................24 How to Transfer Registration.........................................................................24 Signature Guarantee................................................................................25 Income and Capital Gain Distributions.................................................................25 Frequent Purchases and Redemptions of Fund Shares.......................................................25 Limited Availability (Small Cap Fund)..................................................................26 Federal Income Taxes...............................................................................27 Other Shareholder Services...........................................................................28 Index Descriptions...................................................................................29 Financial Highlights.................................................................................30 For More Information................................................................................33 Privacy Policy...................................................................................PP-1 Additional Information.......................................................................Back Cover
SUMMARY SECTION MAIRS & POWER GROWTH FUND Investment Objective The objective of the Mairs & Power Growth Fund (the Fund) is to provide shareholders with a diversified portfolio of common stocks, which have the potential for above-average, long-term appreciation. Fees and Expenses of the Fund This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. Shareholder Fees (fees paid directly from your investment)...........none Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fees.........................0.56% Other Expenses...........................0.10% Total Annual Fund Operating Expenses.........0.66% Expense Example This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and you then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 1 year 3 years 5 years 10 years $67 $211 $368 $822 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund s performance. During the most recent fiscal year, the Fund s portfolio turnover rate was 10.99% of the average value of its portfolio. Principal Investment Strategies The Fund invests primarily in U.S. common stocks. The Fund may also invest in securities of foreign issuers which are listed on a U.S. stock exchange or are represented by American Depositary Receipts (ADRs). In selecting securities for the Fund, the Fund s investment adviser, Mairs & Power, Inc. (the Adviser) gives preference to holdings in high quality companies, which are characterized by earnings that are reasonably predictable, have a return on equity that is above-average, hold market dominance and have financial strength. Some emphasis is placed on small cap companies (companies with a market capitalization of less than two billion dollars at the time of initial purchase) and mid cap companies (companies with a market capitalization between two and ten billion dollars at the time of initial purchase). The Adviser focuses generally on companies located in the Upper Midwest region of the U.S. (which the Adviser considers to be the states of Illinois, Iowa, Minnesota, North Dakota, South Dakota and Wisconsin). The Adviser seeks to keep the Fund s assets reasonably fully invested, to maintain modest portfolio turnover rates and to moderate risk by investing in a diversified portfolio of equity securities. The Adviser may sell the Fund s portfolio securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities. Principal Risks of Investing in the Fund All investments have risks. The Fund is designed for longterm investors. You should be prepared to accept fluctuations in portfolio value as the Fund seeks to achieve its investment objective. The Fund cannot provide assurance that it will achieve its objective. Loss of money is a risk of investing in the Fund. The main risks of investing in the Fund are: Market Conditions The Fund s investments are subject to market risk, which may cause the value of the Fund to decline. Equity securities are generally subject to greater risk than fixed income securities in adverse market conditions. Markets may, in response to governmental actions or intervention, economic or market developments, or other external factors, experience periods of high volatility and reduced liquidity. During those periods, the Fund may experience high levels of shareholder redemptions and may have to sell securities at times when the Fund would otherwise not do so, potentially at unfavorable prices. Certain securities may be difficult to value during such periods. Fund Management Active management by the Adviser in selecting and maintaining a portfolio of securities that will achieve the Fund s investment objective could cause the Fund to underperform compared to other funds having similar investment objectives. 1
Common Stock Common stocks held by the Fund will fluctuate in value based on the earnings of the company and on general industry and market conditions. The Fund could lose money if a company in which it invests becomes financially distressed. Small Cap and Mid Cap Securities Small cap and mid cap companies may have a shorter history of operations and be less diversified with respect to their product line. Stocks of these companies tend to be more volatile and less liquid than large company stocks. Sector Emphasis Risk To the extent the Fund emphasizes, from time to time, investments in a particular sector, the Fund will be subject to a greater degree of risks particular to that sector because companies in the sector may share common characteristics and may react similarly to market developments. For example, as of December 31, 2016, the Fund had significant investments in the industrials sector, and as a result, it may be more susceptible to the particular risks that may affect companies in the industrials sector, including risks related to employment and economic growth, interest rate changes, changes in consumer spending, legislative and government regulation and spending, import controls, commodity prices, and worldwide competition. Securities of Foreign Issuers and ADRs There are certain risks in securities of foreign issuers which are not associated with domestic securities. These risks among others include political, social or economic instability, difficulty in predicting international trade patterns, taxation and foreign trading practices, and greater fluctuations in price than U.S. corporations. In addition, there may be less publicly available information about a foreign company than about a U.S. domiciled company. Minnesota/Upper Midwest Geographic Risk The Adviser focuses on securities of companies that are located in the Upper Midwest region of the U.S. The Fund may emphasize companies located in Minnesota, in particular. The Fund may be impacted by events or conditions affecting the region to a greater extent than if the Fund invested in more geographically diverse investments. For example, political and economic conditions and changes in regulatory, tax or economic policy in a state or region could affect the economy or particular business operations of companies located in the state or region. Performance Risk/Return Bar Chart and Table The following bar chart and table illustrate the risks of investing in the Fund. The bar chart shows changes in the Fund s performance from year to year over a 10-year period. Both the chart and the table assume that all distributions have been reinvested. The Fund is the successor to Mairs and Power Growth Fund, Inc. (the Predecessor Fund), which was reorganized into the Fund effective December 31, 2011. The performance information for periods before December 31, 2011 reflects the historical performance of the Predecessor Fund. Visit the Fund s website at www.mairsandpower.com, or call 800-304-7404 for current performance figures. Past performance of the Fund, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. Calendar Year Returns as of December 31 Percentage Gain or Loss 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% 4.91% -28.51% 22.52% 17.40% 0.74% 21.91% 35.64% 8.12% -3.07% 15.38% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Calendar Year Returns as of December 31 During the period shown on the bar chart, the Fund s best and worst quarters are shown below: Highest Quarter 2nd Quarter, 2009 17.71% Lowest Quarter 4th Quarter, 2008 22.23% Average Annual Total Returns The following table shows how the Fund s average annual returns before and after taxes for one, five and ten years compare to those of the S&P 500 Total Return Index. The unaudited after-tax returns shown in the table are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). 2
Average Annual Total Returns (For the periods ended December 31, 2016) 1 year 5 years 10 years Return Before Taxes 15.38% 14.86% 8.07% Return After Taxes on Distributions 13.54% 13.69% 7.25% Return After Taxes on Distributions and Sale of Fund Shares 9.65% 11.85% 6.48% S&P 500 Total Return Index (reflects no deduction for fees, expenses or taxes) 11.96% 14.66% 6.95% Portfolio Management The Fund employs Mairs & Power, Inc. to manage the Fund s investment portfolio. Mark L. Henneman, lead portfolio manager of the Fund since July 1, 2013 and co-manager of the Fund from January 2006 to June 2013, is President, Chief Investment Officer and Director of the Adviser. Andrew R. Adams, comanager of the Fund since January 1, 2015, is Executive Vice President and Director of the Adviser. Purchase and Sale of Fund Shares The minimum initial and subsequent investment amounts offered by the Fund are: Minimum Subsequent Type of Account Investment Investment Regular $2,500 $100 Individual Retirement Account (IRA) $1,000 $100 You may purchase, exchange or redeem Fund shares directly through the Fund s transfer agent by writing or calling: Mairs & Power Funds c/o U.S. Bancorp Fund Services, LLC P.O. Box 701 Milwaukee, WI 53201-0701 Telephone: 800-304-7404 Qualifying shareholders may also purchase, exchange or redeem Fund shares on-line at www.mairsandpower.com. Fund transactions may be made on any day the New York Stock Exchange is open for business. Investors who wish to purchase or redeem Fund shares through a bank, brokerdealer, financial adviser or recordkeeper ( Financial Intermediary ) should contact the Financial Intermediary directly for information relating to the purchase or sale of Fund shares. Tax Information The Fund s distributions are taxable and will be taxed as ordinary income or long-term capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA. You may be taxed later upon withdrawal of monies from such tax-deferred arrangements. Payments to Broker-Dealers and Other Financial Intermediaries If you purchase the Fund through a Financial Intermediary, the Fund may pay a fee to the intermediary for sub-transfer agent and other administrative services. The Adviser may also pay the intermediary for the sale of Fund shares and other services. These payments may create a conflict of interest by influencing the Financial Intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your Financial Intermediary s website for more information. 3
MAIRS & POWER BALANCED FUND Investment Objective The objective of the Mairs & Power Balanced Fund (the Fund) is to provide capital growth, current income and preservation of capital. Fees and Expenses of the Fund This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. Shareholder Fees (fees paid directly from your investment)...........none Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fees.........................0.60% Other Expenses...........................0.12% Total Annual Fund Operating Expenses.........0.72% Expense Example This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and you then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 1 year 3 years 5 years 10 years $74 $230 $401 $894 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund s performance. During the most recent fiscal year, the Fund s portfolio turnover rate was 14.10% of the average value of its portfolio. Principal Investment Strategies The Fund emphasizes investments in U.S. common stock and other securities convertible into common stock as well as fixed income securities such as corporate bonds and U.S. Government securities. In selecting securities for the Fund, the Fund s investment adviser, Mairs & Power, Inc. (the Adviser) gives preference to equity holdings in high quality companies, which are characterized by earnings that are reasonably predictable, have a return on equity that is above-average, hold market dominance and have financial strength. The Adviser focuses generally on companies located in the Upper Midwest region of the U.S. (which the Adviser considers to be the states of Illinois, Iowa, Minnesota, North Dakota, South Dakota and Wisconsin) and on small cap and mid cap companies. The Adviser defines a small cap company as a company with less than two billion dollars in market capitalization at the time of initial purchase and a mid cap company as a company with a market capitalization between two and ten billion dollars at the time of initial purchase. The Adviser also gives preference to higher rated investmentgrade fixed income securities (rated Baa or better by Moody s Investors Service or rated BBB or better by Standard & Poor s). Lower rated convertible and nonconvertible debt securities may be purchased if, in the opinion of the Adviser, the potential rewards outweigh the incremental risks. Lower rated debt securities may include debt securities rated below investment-grade (also known as high yield or junk bonds ). The Fund may also invest in securities of foreign issuers which are listed on a U.S. stock exchange or are represented by American Depositary Receipts (ADRs). The Adviser seeks to keep the Fund s assets reasonably fully invested, to maintain modest portfolio turnover rates and to moderate risk by investing in a diversified portfolio of equity and fixed income securities. The Fund may sell its portfolio securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities. Principal Risks of Investing in the Fund All investments have risks. The Fund is designed for longterm investors. You should be prepared to accept fluctuations in portfolio value as the Fund seeks to achieve its investment objective. The Fund cannot provide assurance that it will achieve its objective. Loss of money is a risk of investing in the Fund. The main risks of investing in the Fund are: Market Conditions The Fund s investments are subject to market risk, which may cause the value of the Fund to decline. Equity securities are generally subject to greater risk than fixed income securities in adverse market conditions. Markets may, in response to governmental actions or intervention, economic or market developments, or other external 4
factors, experience periods of high volatility and reduced liquidity. During those periods, the Fund may experience high levels of shareholder redemptions and may have to sell securities at times when the Fund would otherwise not do so, potentially at unfavorable prices. Certain securities may be difficult to value during such periods. Fund Management Active management by the Adviser in selecting and maintaining a portfolio of securities that will achieve the Fund s investment objective could cause the Fund to underperform compared to other funds having similar investment objectives. Common Stock Common stocks held by the Fund will fluctuate in value based on the earnings of the company and on general industry and market conditions. The Fund could lose money if a company in which it invests becomes financially distressed. Convertible Debt Securities Convertible securities are fixed income securities that the Fund has the option to exchange for equity securities at a specified conversion price. Consequently, the value of the convertible security may be exposed to the market risk of the underlying stock as well as interest rate risk and the credit risk of the issuer. Interest Rate Risk Fixed-rate debt securities are subject to interest rate risk, which is the risk the value of a fixed-rate debt security will decline due to an increase in market interest rates. When interest rates rise, the value of a fixed-rate debt security generally decreases. When interest rates decline, the value of a fixed-rate debt security generally increases. Generally, a debt security with a longer maturity will have greater price volatility as a result of interest rate changes than a debt security with a shorter maturity. Investors in the Fund bear the risk that increases in market interest rates will cause the value of the investment portfolio to decline. Credit Risk Fixed income securities are subject to credit risk, which is the risk that the issuer of a debt security will fail to make interest and principal payments when due. Securities issued by the U.S. Government generally are viewed as carrying minimal credit risk. Securities issued by private entities and governmental entities not backed by the full faith and credit of the U.S. Government are subject to higher levels of credit risk. Payment defaults could cause the value of the Fund s investment portfolio to decline. Maturity Risk Longer-term securities generally have greater price fluctuations and are more sensitive to interest rate changes than shorter-term securities. Therefore, the Fund may experience greater price fluctuations when it holds securities with longer maturities. Debt Securities Rated Less than Investment-Grade These securities have a higher degree of credit risk than investment-grade securities. Companies that issue these lower rated securities (also known as high yield or junk bonds ) are often highly leveraged and traditional methods of financing may not be available to them. Also, market values of lower rated securities may be more sensitive to developments which affect the individual issuer and to general economic conditions. Call Risk The Fund invests in corporate bonds, which are subject to call risk. Corporate bonds, preferred stock, and some securities issued by U.S. agencies may be called (redeemed) at the option of the issuer at a specified price before reaching their stated maturity date. If a bond held by the Fund is called during a period of declining interest rates, the Fund will likely reinvest the proceeds received at a lower interest rate than that of the called bond, causing a decrease in the Fund s income. Government Obligations Risks No assurance can be given that the U.S. Government will provide financial support to U.S. government-sponsored agencies or instrumentalities where it is not obligated to do so by law, such as the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Securities issued by Fannie Mae and Freddie Mac have historically been supported only by the discretionary authority of the U.S. Government. While the U.S. Government provides financial support to various U.S. government-sponsored agencies and instrumentalities, such as Fannie Mae and Freddie Mac, no assurance can be given that it will always do so. Securities of Foreign Issuers and ADRs There are certain risks in securities of foreign issuers which are not associated with domestic securities. These risks include political, social or economic instability, difficulty in predicting international trade patterns, taxation and foreign trading practices, and greater fluctuations in price than U.S. corporations. In addition, there may be less publicly available information about a foreign company than about a U.S. domiciled company. 5
Small Cap and Mid Cap Securities Small cap and mid cap companies may have a shorter history of operations and be less diversified with respect to their product line. Stocks of these companies tend to be more volatile and less liquid than large company stocks. Minnesota/Upper Midwest Geographic Risk The Adviser focuses on securities of companies that are located in the Upper Midwest region of the U.S. The Fund may emphasize companies located in Minnesota, in particular. The Fund may be impacted by events or conditions affecting the region to a greater extent than if the Fund invested in more geographically diverse investments. For example, political and economic conditions and changes in regulatory, tax or economic policy in a state or region could affect the economy or particular business operations of companies located in the state or region. Performance Risk/Return Bar Chart and Table The following bar chart and table illustrate the risks of investing in the Fund. The bar chart shows changes in the Fund s performance from year to year over a 10-year period. Both the chart and the table assume that all distributions have been reinvested. The Fund is the successor to Mairs and Power Balanced Fund, Inc. (the Predecessor Fund), which was reorganized into the Fund effective December 31, 2011. The performance information for periods before December 31, 2011 reflects the historical performance of the Predecessor Fund. Visit the Fund s website at www.mairsandpower.com, or call 800-304-7404 for current performance figures. Past performance of the Fund, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. Calendar Year Returns as of December 31 Percentage Gain or Loss 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% 4.28% -21.12% 21.35% 14.87% 3.23% 17.34% 19.02% 8.04% -2.54% 11.42% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Calendar Year Returns as of December 31 During the period shown on the bar chart, the Fund s best and worst quarters are shown below: Highest Quarter 2nd Quarter, 2009 13.47% Lowest Quarter 4th Quarter, 2008 12.69% Average Annual Total Returns The following table shows how the Fund s average annual returns before and after taxes for one, five and ten years compare to those of the Composite Index, the S&P 500 Total Return Index and the Bloomberg Barclays U.S. Government/Credit Bond Index. The Composite Index reflects an unmanaged portfolio comprised of 60% of the S&P 500 Total Return Index and 40% of the Bloomberg Barclays U.S. Government/Credit Bond Index. The unaudited after-tax returns shown in the table are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts (IRAs). Average Annual Total Returns (For the periods ended December 31, 2016) 1 year 5 years 10 years Return Before Taxes 11.42% 10.38% 6.85% Return After Taxes on Distributions 9.99% 9.37% 5.89% Return After Taxes on Distributions and Sale of Fund Shares 6.71% 7.95% 5.21% Composite Index (reflects no deduction for fees, expenses or taxes) 8.48% 9.72% 6.24% S&P 500 Total Return Index (reflects no deduction for fees, expenses or taxes) 11.96% 14.66% 6.95% Bloomberg Barclays U.S. Government/Credit Bond Index (reflects no deduction for fees, expenses or taxes) 3.05% 2.29% 4.40% 6
Portfolio Management The Fund employs Mairs & Power, Inc. to manage the Fund s investment portfolio. Ronald L. Kaliebe, lead portfolio manager of the Fund since July 1, 2013 and co-manager of the Fund from January 2006 to June 2013, is Senior Vice President, Director of Fixed Income and Director of the Adviser. Kevin V. Earley, co-manager of the Fund since January 1, 2015, is Vice President and Director of the Adviser since 2013. Purchase and Sale of Fund Shares The minimum initial and subsequent investment amounts offered by the Fund are: Minimum Subsequent Type of Account Investment Investment Regular $2,500 $100 Individual Retirement Account (IRA) $1,000 $100 You may purchase, exchange or redeem Fund shares directly through the Fund s transfer agent by writing or calling: Mairs & Power Funds c/o U.S. Bancorp Fund Services, LLC P.O. Box 701 Milwaukee, WI 53201-0701 Fund transactions may be made on any day the New York Stock Exchange is open for business. Investors who wish to purchase or redeem Fund shares through a bank, brokerdealer, financial adviser or recordkeeper ( Financial Intermediary ) should contact the Financial Intermediary directly for information relating to the purchase or sale of Fund shares. Tax Information The Fund s distributions are taxable and will be taxed as ordinary income or long-term capital gains, unless you are investing through a tax-deferred arrangement, such as a 401(k) plan or an IRA. You may be taxed later upon withdrawal of monies from such tax-deferred arrangements. Payments to Broker-Dealers and Other Financial Intermediaries If you purchase the Fund through a Financial Intermediary, the Fund may pay a fee to the intermediary for sub-transfer agent and other administrative services. The Adviser may also pay the intermediary for the sale of Fund shares and other services. These payments may create a conflict of interest by influencing the Financial Intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your Financial Intermediary s website for more information. Telephone: 800-304-7404 Qualifying shareholders may also purchase, exchange or redeem Fund shares on-line at www.mairsandpower.com. 7
MAIRS & POWER SMALL CAP FUND Investment Objective The objective of the Mairs & Power Small Cap Fund (the Fund) is to seek above-average, long-term appreciation. Fees and Expenses of the Fund This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund. Shareholder Fees (fees paid directly from your investment) Redemption Fee (as a percentage of amount redeemed on shares held for 180 days or less).....1.00% Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Management Fees.........................0.90% Other Expenses...........................0.15% Total Annual Fund Operating Expenses.........1.05% Expense Example This example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The example assumes that you invest $10,000 in the Fund for the time periods indicated and you then redeem all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Fund s operating expenses remain the same. Although your actual costs may be higher or lower, based on these assumptions, your costs would be: 1 year 3 years 5 years 10 years $107 $334 $579 $1,283 Portfolio Turnover The Fund pays transaction costs, such as commissions, when it buys and sells securities (or turns over its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund shares are held in a taxable account. These costs, which are not reflected in annual fund operating expenses or in the example, affect the Fund s performance. During the most recent fiscal year, the Fund s portfolio turnover rate was 21.26% of the average value of its portfolio. Principal Investment Strategies The Fund normally will invest at least 80% of its net assets (including borrowings for investment purposes) in U.S. common stocks issued by small cap companies. For this purpose, small cap companies are defined as companies whose market capitalization at the time of purchase is within the non-float adjusted range represented by companies in the S&P SmallCap 600 Total Return Index. The S&P SmallCap 600 Total Return Index is a widely used benchmark for small cap performance and is rebalanced continuously. As of December 31, 2016, the non-float adjusted market capitalization range for the S&P SmallCap 600 Total Return Index was approximately $51 million to $4.5 billion, but is expected to change frequently. In selecting securities for the Fund, the Fund s investment adviser, Mairs & Power, Inc. (the Adviser) gives preference to companies with attractive business niches, strong competitive positions, and the potential to grow revenues, earnings and cash flows consistently over the long-term. Capable management with a track record of prudent capital deployment is also an important consideration. The Adviser focuses generally on companies located in the Upper Midwest region of the U.S. (which the Adviser considers to be the states of Illinois, Iowa, Minnesota, North Dakota, South Dakota and Wisconsin). The Fund also may invest in common stocks issued by companies with market capitalizations above the non-float adjusted range of the S&P SmallCap 600 Total Return Index. The Fund may also invest in securities of foreign issuers which are listed on a U.S. stock exchange or are represented by American Depositary Receipts (ADRs). From time to time, the Fund may invest in initial public offerings (IPOs). The Adviser seeks to keep the Fund s assets reasonably fully invested, to maintain modest portfolio turnover rates, and to mitigate risk by investing in a diversified portfolio of equity securities. The Fund may sell its portfolio securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities. Principal Risks of Investing in the Fund All investments have risks. The Fund is designed for longterm investors. You should be prepared to accept fluctuations in portfolio value as the Fund seeks to achieve its investment objective. The Fund cannot provide assurance that it will achieve its objective. Loss of money is a risk of investing in the Fund. The main risks of investing in the Fund are: Market Conditions The Fund s investments are subject to market risk, which may cause the value of the Fund to decline. Equity securities are generally subject to greater risk than fixed income securities in adverse market conditions. Markets 8
may, in response to governmental actions or intervention, economic or market developments, or other external factors, experience periods of high volatility and reduced liquidity. During those periods, the Fund may experience high levels of shareholder redemptions and may have to sell securities at times when the Fund would otherwise not do so, potentially at unfavorable prices. Certain securities may be difficult to value during such periods. Fund Management Active management by the Adviser in selecting and maintaining a portfolio of securities that will achieve the Fund s investment objective could cause the Fund to underperform compared to other funds having similar investment objectives. Common Stock Common stocks held by the Fund will fluctuate in value based on the earnings of the company and on general industry and market conditions. The Fund could lose money if a company in which it invests becomes financially distressed. Small Cap Securities Generally, companies with smaller market capitalizations have fewer shares traded daily, less liquidity, and greater price volatility than companies with larger market capitalizations. In addition, small cap companies tend to have shorter track records, a more limited product or service base, more limited access to capital, and a greater possibility of failing. These factors increase the risk of investing in small cap companies, as compared to mid cap and large cap companies. Initial Public Offering (IPO) Risk The Fund may invest in initial public offerings by small cap companies, which can involve greater risks than investments in companies which are already publicly traded. The companies which undergo IPOs generally have limited operating histories, and their prospects for future profitability are uncertain. In addition, stock prices of IPOs can be highly unstable due to the absence of a prior public market and other factors. Sector Emphasis Risk To the extent the Fund emphasizes, from time to time, investments in a particular sector, the Fund will be subject to a greater degree of risks particular to that sector because companies in the sector may share common characteristics and may react similarly to market developments. For example, as of December 31, 2016, the Fund had significant investments in the industrials sector, and as a result, it may be more susceptible to the particular risks that may affect companies in the industrials sector, including risks related to employment and economic growth, interest rate changes, changes in consumer spending, legislative and government regulation and spending, import controls, commodity prices, and worldwide competition. Securities of Foreign Issuers and ADRs There are certain risks in securities of foreign issuers which are not associated with domestic securities. These risks include political, social or economic instability, difficulty in predicting international trade patterns, taxation and foreign trading practices, and greater fluctuations in price than U.S. corporations. In addition, there may be less publicly available information about a foreign company than about a U.S. domiciled company. Minnesota/Upper Midwest Geographic Risk The Adviser focuses on securities of companies that are located in the Upper Midwest region of the U.S. The Fund may emphasize companies located in Minnesota in particular. The Fund may be impacted by events or conditions affecting the region to a greater extent than if the Fund invested in more geographically diverse investments. For example, political and economic conditions and changes in regulatory, tax or economic policy in a state or region could affect the economy or particular business operations of companies located in the state or region. Performance Risk/Return Bar Chart and Table The following bar chart and table illustrate the risks of investing in the Fund. The bar chart shows changes in the Fund s performance from year to year over a five-year period. Both the chart and the table assume that all distributions have been reinvested. Visit the Fund s website at www.mairsandpower.com, or call 800-304-7404 for current performance figures. Past performance of the Fund, before and after taxes, is not necessarily an indication of how the Fund will perform in the future. 9