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Hi Bob. What do you use in your clients' portfolios within small cap value universe. I have looked at fsccx, but there is not much there in terms of downside protection.


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  • @fundalarm. I looked at the not-so-good options in wifey's 403b and chose VSCIX, too. Super, rock-bottom expenses, good performance among peers. My other small-cap is MSCFX. It started out like a house on fire. But reversion to the mean is hard to avoid. Nevertheless, I'm happy with it. I own a FOREIGN small/mid-cap fund, PRIDX. It's going gangbusters this year.
  • >> the nature of owning small caps.

    Well, within this universe there are lower-risk funds w/ truly veteran managers, chiefly the two from Gabelli, WEMMX and GABSX.
  • edited July 2017
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  • We currently don't own a dedicated small cap value fund. As you likely know, we make no attempt to fill in style boxes. At this point, we use SWSSX or SCHA as a core hold, then build around it with IYSIX and/or VTMSX. And I would not expect any small cap fund to be a safe haven during bear markets. As for international small cap value, we are using BISMX.
  • FWIIW, I reduced my position again this year in WSVIX, having held since inception. SCV seems to be a tough area to make money. Maybe this is due to the previously discussed reduction in total number of small caps available to managers. I did not receive an announcement that I recall, but John Walthausen has added a colleague to the fund's management. Members in the past have commented on JW's age.
  • Thank you, all, for your answers. Nuveen's FSCCX fits the bill for me for less risk averse portfolios. Otherwise, some indexing via ETFs or nothing at all dedicated a la BobC.
  • @fundalarm- Hello there- very happy to see that you're still around, and that your nose is still looking great!:)

  • edited July 2017
    I own QRSVX, FOSCX, and MSCFX in this space. Queens Road is a value fund, while the other two ride the line between growth and blend.

    5 year annual returns of: 11.11%, 14.2%, 15.5%

    QRSVX is pretty conservative if that is what you are looking for, but it still has an ulcer index of 10 and had a max draw down of 42% in 2009. It is in risk group 4. So, yeah, maybe protection is the wrong word, but the conservative positioning of the fund results in holding some cash (currently around 16%), and avoiding overpaying for stocks. It has had the same manager since 2002! FWIW

    Down Market Performance Bar Chart on the QRSVX website

    Bar Chart of Downside Returns vs. Russel 2k

  • I've been using XSLV, which is classified as small cap value on MFO in its risk profile. It's a risk group 4 as well, but hasn't been around long enough to see how it performs in a big correction or bear market. Still, it seems tamer than most.
  • Thank you, gentlemen. While downside protection is important, i cant pay for large cash holdings within a fund as we manipulate cash levels on the overall portfolio level.

    @Old_Joe: the nose belongs to my 11 and a half yo airedale. He is around and kicking. We added a smaller one in recent years..belonging to a Scotty. I havent been around the Boards much as I crossed to the dark side and joined the "retail" world by becoming an advisor. Hope all is well with you and the sunny state of California!
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