Small Cap Value

Defensive Small-Cap Value Equities

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Overview

Client Commitment

As defensive value specialists, we look to invest in high quality companies with strong management teams, stable balance sheets, and durable competitive advantages that are trading at attractive valuations. We seek to achieve excess returns over full market cycles, with less risk than our benchmark and peers as measured by standard deviation, beta and down market capture.

Investment Approach

    Attractive Reward / Risk

  1. Our disciplined valuation process measures downside risk before upside potential and invests in securities with
    favorable reward/risk ratios.
  2. High-Conviction Process

  3. The portfolio typically holds between 60 to 90 stocks with business fundamentals considered more important than fluctuations in the wider economy.
  4. Different Than the Benchmark

  5. The benchmark is not used as a starting point for portfolio construction, which should lead to high active share.

Featured Insights

Performance

RETURNS

(As of 09/30/2018)
(As of 09/30/2018)
Inception: Jul 01, 1988 3M YTD 1YR 3YR 5YR 10YR Since Inception
Composite Gross 0.83% 1.76% 7.23% 15.12% 11.49% 11.13% 13.16%
Composite Net 0.60% 1.07% 6.28% 14.11% 10.51% 10.15% 11.89%
Russell 2000® Value Index 1.60% 7.14% 9.33% 16.12% 9.91% 9.52% 10.78%
Inception: Jul 01, 1988 3M YTD 1YR 3YR 5YR 10YR Since Inception
Composite Gross 0.83% 1.76% 7.23% 15.12% 11.49% 11.13% 13.16%
Composite Net 0.60% 1.07% 6.28% 14.11% 10.51% 10.15% 11.89%
Russell 2000® Value Index 1.60% 7.14% 9.33% 16.12% 9.91% 9.52% 10.78%
Past performance cannot guarantee future results. Investing involves risk, including the possible loss of principal and fluctuation of value. Returns greater than one year are annualized. Returns are expressed in U.S. dollars. Composite returns are net of transaction costs and gross of non-reclaimable withholding taxes, if any, and reflect the reinvestment of dividends and other earnings.
The gross performance results presented do not reflect the deduction of investment advisory fees and returns will be reduced by such advisory fees and other contractual expenses as described in the individual contract and Form ADV Part 2A.
Net performance results do not reflect the deduction of investment advisory fees actually charged to the accounts in the composite but they do reflect the deduction of model investment advisory fees based on the maximum fee rate in effect for the respective time period, adjusted for performance-based fees where applicable. Actual advisory fees may vary among clients invested in the strategy shown and may be higher or lower than model advisory fees. Returns for each client will be reduced by such fees and expenses as negotiated in any client contract as discussed in Form ADV Part 2A.
For a complete list of holdings as of the most recently available disclosure period, contact us.

Commentary & Literature

2Q18 Portfolio Commentary Highlights

  • Small caps outperformed mid- and large-cap stocks given investors’ perception that smaller caps are more immune from trade wars.
  • We remain focused on limiting downside in what we believe is a richly valued equity market.
  • During the quarter, we added to banks and information technology.