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the hottest funds in the hottest category

David_Snowball
in Fund Discussions
The top domestic equity category, YTD, is ... small-value? Hmmmm.

The top five performers there are:

1. Hodges Pure Contrarian (HDPCX): up 69% YTD, two-star, high vol, $14 million in assets.
2. Aegis Value (AVALX): up 59% YTD, one-star, high vol, $130 million in assets. Very microcap. We've profiled it.
3. Schneider Small Cap Value (SCMVX): up 53%, one-star, high vol, $45 million in assets. Trails 99% of its peers over the past 10 years.
4. Towle Deep Value (TDVFX): up 51% YTD, four-star, $139 million in assets (a fair chunk of it is internal), top 1% in every trailing time period. Also profiled.
5. CMA Advisors Small Cap Value (CMOVX): up 49%, one-star, $51 million in assets.

Hmmmm ...

The worst funds in the category are Intrepid Endurance (ICMAX), up 8% with lots of cash including mine, Bridgeway Ultra-Small (BRUSX), their original fund, up 9.5%, James Small Cap (JASCX), Diamond Hill Small Cap (several classes), closed and Gold-rated, and Huber Small Cap Value (HUSIX).

I always like to imagine that there's some pattern there, but maybe it's all no and no signal.

As ever,

David

Comments

  • TedTed
    @David & MFO Members: In case you missed my eariler link on Category Kings !
    Regards,
    Ted
    http://www.mutualfundobserver.com/discuss/discussion/30505/lipper-mutual-fund-category-kings-top-ten-ytd#latest
  • VintageFreakVintageFreak
    @Mr Snowball. Yup. There is a pattern. Some people timed their entry into those funds. Others like me own ICMAX.
  • sma3
    what goes up must (and will) come down.
  • gmarceau
    True small value is so hard to hold. I hope no one is buying TDVFX or AVALX after this run up. If you're going to buy into small value, at least do it when the fund is in a decline like HUSIX, but I couldn't imagine always buying into these when their down for 10 or 20 years, that would take so much discipline.
  • TedTed
    @MFO Members: Yesterday I sold PRHSX and put the proceeds into IWN. It goes without saying that SCV has been on quite a run this year, and I believe it has more room to run with the January Effect. I hope I'm not to late to the party !
    Regards,
    Ted
  • MJG
    Hi Guys,

    It would certainly improve the health of any portfolio if some pattern recognition would emerge from the countless historical investment studies that have been made. These studies have basically failed to yield lasting investment rules. Investment category returns are not persistent on an annual,basis. Here is one of many Links that visually demonstrate the commonplace marketplace vicissitudes:

    https://www.mfs.com/wps/FileServerServlet?articleId=templatedata/internet/file/data/sales_tools/mfsvp_20yrsb_fly&servletCommand=default

    If a pattern exists in these data, it surely escapes me. What is illustrated is that a rapid elevator is in operation. What is up will certainly go down, and in an unpredictable manner. Good luck on trying to time these events. I suppose that this is the data that supports the standard advice to broadly diversify and to be a patient investor by staying the course.

    That conventional advice tilts the odds just a little. I am reminded of a famous saying by Damon Runyon: "The race is not always to the swift or the battle to the strong, but that is the way to bet". Going against market momentum is a tough way to consistently earn a decent return. The failures far outdistance the few success stories. The trend is your friend.

    But getting down to the individual fund level, some winners do exist and persist. Good luck at identifying them early in their success cycle. Also, these outliers don't persist forever. Warren Buffett is a recent example of falling from grace. And that too is changing today as Buffett seems to be benefitting from Trump's election. Unlikely events do happen.

    Best Wishes.
  • MarkMark
    There are traders and then there are investors. Buffett is an investor. Plan and act accordingly.
  • CrashCrash
    In April of 2017, I'll have been in MSCFX (small-cap BLEND) for 5 years. Now it's closed to new investors. When it opens-up again, it bears a hard look from folks who are not yet into it. I feed profits from this fund into MAPOX, which is one of my two less volatile portfolio anchors. PRWCX is the other. (Another closed fund. I have people here on this discussion board to thank for this.)
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