Howdy, Stranger!

It looks like you're new here. If you want to get involved, click one of these buttons!

In this Discussion

Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

    Support MFO

  • Donate through PayPal

Small Cap Value

Looking for additional ideas in this space. I look at PE and Style Purity in SCV...Pzena, Hotchkiss & Wiley and LSV are the Managers I've reviewed. I own RYSEX in my Rollover but looking for another Mgr. Franklin, American Century and TRP have good product but they have all migrated to Blend...therefore, skewing Annualized Perfromance a bit.
I've reviewed M*, Fidelity and MFO Great Owls ...NSDVX is one idea I like.

Any additional to share?

Comments

  • edited March 2021
    Not sure if they fit your exact criteria, but for my money in the SCV cat...
    FCPVX and/or RYOFX.

    You can also get a nice slice of SCV in allocation fund FMSDX.
  • I'm not sure how it measures up to your criteria, but have you looked at Bridgeway? BRSVX has a pretty good track record in SCV.
  • VSCIX Vanguard. Watch out for not great customer service, but a great INDEX fund. Granted, not specifically VALUE.
  • Agreed, VSCIX is a great, SCB Index fund. Pretty steep min at $5M though. If interested, try VSMAX Admiral shares at $3K min.
  • ARGFX Ariel Growth seems to be some special kind of small cap value fund. If anyone can explain it to me I would appreciate it. I don't really get it, but when the market tanks, when small cap value should decline less, this find always seems to lose more than the market. In 2008, I don't have the numbers handy, but I bet it declined by 70% or even more in a few months time. At the same time it is capable of outsize gains on the upside. Very volatile. They do hold stocks with lower than average PE's but there is something about their style that is not at all advantageous in down markets.
  • I've used QRSVX in the past, and bought some again a few months ago. Didn't really shop around very much, just saw an old favorite doing pretty well, still lower risk, and went for it.
  • When I rearranged the deck chairs in the IRA this spring I ended up buying RWJ. I sold RYSEX during last year's fire drill. Sold JSCVX this spring. And set some cash aside.

    It's hard to find pure value plays in the smaller caps with what's available at Vanguard, where my IRA is. You might be interested in SYLD which is heavily concentrated in SMID value, but has little bleed into blend..
  • Value funds of all stripes have been drifting toward and into blend for the past few years. In moderation this doesn't worry me, so long as they keep a value tilt. My thinking is that funds that move around within reason can be holding true to their general mandate while still seeking out the more attractive areas to invest in.

    At the same time, I agree that where a fund's portfolio is positioned skews performance numbers and needs to be considered when comparing funds. The style purist sidesteps this problem by focusing on funds that home in on their declared style box.

    It is quite possible that value funds that have wandered into the blend category may start wandering back, especially if their managers perceive a rotation into value. If that happens, it may not be so important to look for funds that are currently pure value.

    That said, comments about a few of the funds mentioned:

    American Century (ASVIX) has been in small cap value for the past few years (per M*); though it is just on the value side of the value/blend divide. It hasn't yet migrated to blend. (Lipper however does classify it as core, i.e. blend; it's that close to the line).

    The only TRP fund I know that purported to be SCV was, well, TRP SCV, PRSVX. That fund drifted into blend so many years ago that it is now leaning toward growth.

    BRSVX - a fund I've always rooted for (I like the fund company) but had a rough decade. Its style purity should help should we see a real rotation into value. There's also BRSIX if you're interested in micro caps.

    QRSVX drifted over the line to blend a couple of years ago but is still in the value half of the equity universe. It's too late now, but the better (read cheaper) way to have invested in it was to have purchased FPPTX and waited for it to convert into QRSIX, the cheaper shares of Queens Road SCV.

  • I have previously mentioned that my choice for SCV is the ETF, CSB. It's fairly concentrated at 103 positions, so it may not suit investors who want a larger slice of the universe. The other candidates I reviewed are DES and VRB. CSB throws off a monthly dividend which may or not be attractive. Most of my holding is in a Roth.
  • I favor FTHNX in the small cap space, though more of a blend.
  • edited March 2021
    I used to own PVFIX for many years almost since inception, but sold it this year to use the proceeds to acquire LLSCX. The fund is definitely a SCV fund but it used to hold a lot of cash and was very conservative.

    BRSIX has done well with the small cap rally. QRSIX has also done well of late (I own both BRSIX & QRSIX via FPPTX consolidation).

  • Lots of very good suggestions. Some drifted away from the specific OP request of SCV to suggest SCB and/or MC.

    The important takeaway though is the OP identified a category that has been outperforming for several months and appears likely to continue its outperformance.

    The important action item is "Just Do It." Identify one or more of the suggested funds that fits your criteria and start the BUY process.

    It's still the same story, the most important "time" in investing is "time in the market."

    Aside: I still like my two SCV suggestions, but am intrigued (in no particular order) with PVIVX, THBVX and ASVIX.
  • edited March 2021
    Here is US News' rankings of small cap value funds:

    https://money.usnews.com/funds/mutual-funds/rankings/small-value

    BRSIX is #2
    BRSVX is #5
    RYPNX is #6
    QRSVX is #14
    NSMVX is #21
    PZISX is #29
    PVFIX is #36
    RYSEX is #38
    LSVQX is #39
    NSDVX is #48

    THBVX is considered a small blend fund based on this (which I also own):

    http://quotes.morningstar.com/chart/fund/chart?t=THBVX&region=usa&culture=en_US

    PVIVX is a small blend fund also based on this:

    http://quotes.morningstar.com/chart/fund/chart?t=pvivx&region=usa&culture=en_US

    ASVIX is a small cap value fund based on this:

    http://quotes.morningstar.com/chart/fund/chart?t=asvix&region=usa&culture=en_US

  • RE: US News Rankings...

    You really don't need to go any further than looking at their #1 ranked SCV fund, DFFVX.
    http://performance.morningstar.com/fund/performance-return.action?t=DFFVX&region=usa&culture=en-US

    How is a M* 3* fund that ranked in its SCV category
    2011-YTD
    72-23-10-65-46-40-40-55-52-45-24
    even REMOTELY regarded as Best in Class?

    Seriously, ONCE in the Top Ten percentile in 11 years, and it's magically the #1 ranked SCV fund?

    This is NOT a one-off comparison. I've made these comparisons for YEARS with their rankings and I've NEVER been able to justify any more than a glance at them.

    Kind of reminds me of some of the old stock "Supervised Lists" from back in the 80's, some of which required the company to fund the inclusion of their stock on the list, if you get my drift.
  • edited March 2021
    I do, it just depends on what your long/short term objective is. I owned PVFIX prior to 2010 and it never did stellar, probably mediocre at best. This year has probably been its best year in years. The manager used to work at Royce Funds.

    Plus, 2021 is still young.
  • edited March 2021
    What? LT/ST objective has NOTHING to do with this.

    PVFIX, US News #36, is a perennial SCV laggard and is in the 100% (last) SCV YTD percentile.
    http://performance.morningstar.com/fund/performance-return.action?t=PVFIX&region=usa&culture=en-US

    It's 2021, 7.31% YTD TR is horrific for a SCV fund.

    But in your thinking I guess there's a long time to go yet in 2021?
  • msf
    edited March 2021
    stillers said:

    RE: US News Rankings...

    You really don't need to go any further than looking at their #1 ranked SCV fund, DFFVX.
    ...
    Seriously, ONCE in the Top Ten percentile in 11 years, and it's magically the #1 ranked SCV fund?
    ...
    Kind of reminds me of some of the old stock "Supervised Lists" from back in the 80's, some of which required the company to fund the inclusion of their stock on the list, if you get my drift

    US News runs third party numbers through its algorithm to produce its rankings. In this sense it's similar to M*'s star ratings, except M* doesn't exclusively use third party data, so M* has a small but non-zero ability to jigger its figures.

    No magic involved, just formulas. Speaking of M*, it gives DFFVX a sliver rating. That's prospective. Could you explain to us what US News' rankings are supposed to represent? If one is going to appreciate your critique, it would help to know what it is you're critiquing.

    " for my money in the SCV cat...FCPVX and/or RYOFX"

    Seriously, ONCE in the Top Ten percentile in 11 years, and for your money FCPVX is one of your top two SCV funds?

    I agree with you that the US News rankings are not worth more than a quick glance. But that's because it's easy to take half a dozen pot shots at how they're computed, not because I necessarily disagree with the results.
  • edited March 2021
    DFFVX is UP 17.31% YTD while FCPVX is UP 25.13% YTD. (I confirmed that data on their respective sites. M* YTD TR data for the latter is incorrect.)

    That ~+8% better YTD performance is despite the fact that FCPVX is historically a worse performer in UP markets than DFFVX and is likely do in part at least to the return of Derek Janssen as its PM in 02/21.

    Here are the historical facts:

    DFFVX is a M* 3* rated fund currently, and for each of the past 3-, 5- and 10-yr prior periods.

    FCPVX is a M* 5* rated fund currently, M* 4* for 3- and 5-year prior periods and a 5* for the prior 10-yr period.

    As you know, funds earn those stars on past, actual performance. They don't drive my investment decisions, but they are certainly a factor.

    All other measurements from SD to Sharpe to Sortino to Capture ratio clearly favor FCPVX over DFFVX. These are ALL important investment decision drivers for me.

    M* metal (read, "analyst") ratings are worth the cyberspace they're written on in my book. DFFVX's silver rating, while sounding impressive, is doing nothing to help it come close to the first page of SCV funds that I scope.

    US News rankings are even more worthless to me then M* metal rankings. That lofty #1 ranking hasn't helped it any this year either.

    I make my own determination on how I think a given fund will perform in coming periods.

    Investors are always free to choose their investments. I easily chose FCPVX over DFFVX.

    YMMV and I'm done with this discussion.
  • You were done with this discussion when you suggested that all one needed to know about a source (here, US News) is that they listed as their top fund one that had only one top decile performance in the past eleven years. Seriously.

    I accepted this. I merely observed that it seems to apply equally to you.

    Back fill all you want about how wonderful your fund is. None of that changes anything. It doesn't address the innuendo you directed at US News.

    As you know, funds earn those stars on past, actual performance
    Past performance is no guarantee of future results. On what basis does US News calculate fund scores? Never mind - an issue already raised and ducked by changing the subject.

    Finally, lest anyone think I am defending US News' methodology, I reiterate: "I agree ... that the US News rankings are not worth more than a quick glance."
  • You were done with this discussion when you suggested that all one needed to know about a source (here, US News) is that they listed as their top fund one that had only one top decile performance in the past eleven years. Seriously.

    I accepted this. I merely observed that it seems to apply equally to you.

    Back fill all you want about how wonderful your fund is. None of that changes anything. It doesn't address the innuendo you directed at US News.

    As you know, funds earn those stars on past, actual performance
    Past performance is no guarantee of future results. On what basis does US News calculate fund scores? Never mind - an issue already raised and ducked by changing the subject.

    Finally, lest anyone think I am defending US News' methodology, I reiterate: "I agree ... that the US News rankings are not worth more than a quick glance."
  • Trigger finger a little slow today ? @msf
    Stay safe Derf
  • Derf said:

    Trigger finger a little slow today ? @msf
    Stay safe Derf

    "Pancho met his match, you know, in the deserts down in Mexico..."
  • edited March 2021
    Just checked a former holding: PRSVX . It's drifted into "blended," but at +16.62% YTD, that's already insane. But M* lists it as in the 71st percentile. Wow.
  • Derf said:

    Trigger finger a little slow today ? @msf
    Stay safe Derf

    Too many open windows, so sluggish system. Meanwhile I received an MFO error message saying there was a posting problem. Apparently there wasn't.
  • edited March 2021
    I picked US News as only an example that supported some of the SCV funds identified above. I could have picked another example such as:

    https://mutualfunds.com/equity-categories/us-small-cap-value-equity-funds-and-etfs/

    or something else for that matter, but I did not.

    It was not intended that US News should be used as the final say on one's investment decision. I hope each and every reader/op does their own homework before they invest.

    PVFIX, based on the M* information as of 2/28/21, was 7.31% YTD and in the 100% rank category. However, the trailing total return, as of 3/11/21 was 13.27% not 7.31%. The fund started to slowly increase as of March 5. Incidentally, Pinnacle's website states that is performance YTD is 12.60% - http://www.pinnaclevaluefund.com/performance.aspx

    Are there better SCV funds? Sure, but the OP asked for other possibilities for consideration.

    Also, with the exception of several standout small cap growth funds, there seems to be a resurgence in the SCV arena that has been out of favor for past several years (which is why I mentioned short/long term objective). BRSIX, BRUSX and others have seen some significant percentage of increases in 2021, but it is still early. For example, as of 3/11/21, the YTD total trailing return for BRUSX was 37.31%; BRSIX was 41.73% and BRSVX was 48.02% (I picked on Bridgeway as an example). Even WSCVX's total trailing return was 29.46% YTD as of 3/11/21. I am sure there are other SCV funds that have performed as comparably as well.

    I have been investing in BRUSX and PRSVX for the last several years when SCV was out of favor; I am finally seeing the fruits of my long term investing perseverance.
  • As of 12/31/2020, the largest holding of BRSVX was GameStop. Not a stock I would expect John Montgomery to buy, but what do I know? M* claims the stock has gained 6,500% over the previous year. My experience with Bridgeway funds was that some years are blowouts and others the obverse.
  • "DFFVX is UP 17.31% YTD while FCPVX is UP 25.13% YTD. (I confirmed that data on their respective sites. M* YTD TR data for the latter is incorrect.) "

    First US News, now slamming M*.

    Fidelity's FCPVX is up 25.13 YTD though March 11. (There's this funky little asterisk on the YTD figure that reads "*AS OF 3/11/2021".)

    DFA's DFFVX is up 17.21% YTD through February 28. (The table says "annualized, but it has a footnote saying that "Performance less than one year is not annualized.")

    FCPVX was up "just" 15.63% through February 28, per the cited Fidelity page. Same as M*.

    Can you say Beardstown Ladies? Typos like writing 17.31% instead of 17.21% are common and understandable (more so if links are provided to check sources); comparing apples and oranges is not.

    This apples to oranges comparison resulted in a making FCPVX look better than it was. It's very easy to imply bad intent, if you get my drift. IMHO here, as with US News and its formulaic fund rankings, a cigar is just a cigar.
  • edited March 2021
    Concerning M* and BRSVX, the link below indicates that Gamestop was BRSVX's largest holding, at 1.96%; I believe it is based on 3/12/21 figures. The link indicates also that the Gamestop position was up on 1303.93% since it was first purchased 9/30/18. The Michaels Stores position is up 66.52% since it was announced that it was going to be taken private again.

    http://portfolios.morningstar.com/fund/holdings?t=BRSVX&region=usa&culture=en-US
Sign In or Register to comment.