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Are U.S. small caps in your portfolio?

Art
edited November 2013 in Fund Discussions
...They think that the small cap space is egregiously, unsustainably overvalued and they see few attractive opportunities in the emerging markets...

This is from the thread about SEEDX and what the managers think. I have a few go anywhere funds and checked portfolios of others. Most do not have much in the way of small caps. Funds checked were BPAVX, BMPEX, FPACX, IVWIX, MFLDX.

Questions are do you hold U.S. small caps in your portfolio and in what percentage? Are you or do you plan on reducing exposure to US small caps in the near future?

I hold 3 funds that have small/micro cap holdings totaling 14% of portfolio. PCVAX, VVPSX and BUFOX. Maybe time to reduce exposure. Seems some of these managers think value is elsewhere or none is to be had if they are in cash.

Comments

  • edited November 2013
    Back in the Spring, I moved to a global small cap fund for the very reasons you gave, U.S small cap valuations increasing. My only small cap managed fund now is GPGOX. I figured if and when US small caps look over-valued, then holding a well managed global small cap option was prudent. I also carry an index small cap that follows the Russell 2000.

    GPGOX is 7% of total portfolio which I don't intend to adjust. The R2000 index fund is only @ about 3%, but I may move that to a large cap index (or cash) if SC's start trending down.

    edit to add: Art, one point to make on the go-anywhere funds you listed, FPACX, IVWIX and MFLDX all have way to high an asset base to hold small cap companies to any degree. So I don't think you can get much take-away about how the managers feel about small caps on those funds. But your point is well taken.
  • I just sold BERWX so my only dedicated small cap holding is GPGOX which is at 17% cash.

    My other stock holdings are in global funds which are all small enough (and willing enough) to go significantly into small caps if they find value there. Their current small cap holding percentages are:

    FPRAX - 23%
    JPPIX - 10%
    SGHIX - 7%
    TWEBX - 5%
    RPGAX - 3%

    Not sure about the percentage of U.S. versus Foreign in these figures. As I recall, GPGOX has about 1/3 U.S., 2/3 foreign.
  • BUFOX is closed to new investors...a sign of good management, but also a sign that the fund may not be able (or want) to put new money to work in this space.
  • I hold one small cap fund, FSCRX, one small cap stock TESS and have a number of funds such as my biotech, health care and technology funds which have small cap exposure. Total seems to be about 12%.
  • US domestic small-caps are 3.2% of my portfolio. MSCFX. I will harvest profit and transplant it into my MAPOX after the first of the year. It has indeed been a stellar performer for me, over the past 16 months or so. M* number says it's up +40.6% over the past year. My results? +53.15%. That includes last year's end-of-year-pay-out.
  • I am in GABSX and about to add WEMMX; neither gets mentioned on MFO so far as I know. The incomplete researches I have done on the former (comparing with PENNX and any given Fido smallcap, for example), it invariably does as well or better and with less downside. I would welcome any substantiated opinions.
  • Hi David,

    I have mentioned the Teton Westwood Mighty Mites fund in the past (search for WEIMX). GABSX looks like an attractive SCB fund, but I would try and access the lower cost GACIX. Both WEIMX and GACIX are available in Scottrade retirement accounts for a minimum of $250.

    In our portfolio, we continue to use VXF, WEIMX and DGSCX to cover our domestic SC and MC needs.

    Kevin
  • edited November 2013
    Hi Art,

    Those that have followed my previous post know that I have a sleeve that holds my small and mid cap funds in the growth area of my portfolio. With this small caps make up about 15%, mid caps about 25% and large caps about 60% of the growth area. For the portfolio as a whole, small caps make up 6%, mid caps 19% and large caps 75% of the portfolio’s current overall equity allocation.

    I have not yet decided when, and if, to cut my allocation to small caps as the Moose’s current signal is linked below … “Hold Small Caps.” Even if they lose some of their luster, I most likely will consider them to be part of my overall equity asset allocation and do nothing.

    http://decisionmoose.com/Moosistory.html

    Hope this helps.

    I wish all … “Good Investing.”

    Old Skeet
  • edited November 2013
    Reply to @kevindow: Hey, tyvm! I buy whatever is offered NTF within Fido and ML.
  • Tell me more about Decisionmoose.
  • Reply to @Old_Skeet: Yes, Skeet, please tell us more about the moose. I just glanced at the site and it looked surprisingly interesting. Have you been following their signals for a while?
  • edited November 2013
    I have ARIVX which currently has 64% in cash! (as of Oct 31)

    and from Eric Cinnamond's 3rd quarter commentary:
    "In summary, the majority of operating results and management comments that we reviewed and analyzed this quarter are consistent with what we witnessed the past year—inconsistent and sluggish. Despite a business environment that lacks clarity and direction, the small-cap investment environment remains exuberant and decisively higher (Russell 2000 has gained 30% the past year). With operating results stagnating and small-cap prices soaring, we believe there is a growing disconnect between price and fundamentals. As this disconnect widens, we believe the risk of meaningful losses in small-caps is increasing. Although we acknowledge the current investment environment may continue and that by holding a large cash position we could incur meaningful opportunity cost, we remain committed to our investment discipline and refuse to overpay. Therefore, we expect cash levels to remain high until conditions change and our opportunity set improves. Moreover, we are avoiding many of the stocks and industries that are performing well and have increased positions in areas that are out-of-favor and performing poorly—increasing the disconnect with the benchmark further. While it is an uncomfortable positioning, we believe it is the right course of action given the increasingly expensive small-cap market combined with an unsupportive fundamental backdrop. In conclusion, we believe it is more important than ever to think independently and avoid investment risks that appear nonexistent today but, in our opinion, have increased considerably with price. "

    I hold a position in FMIMX and I don't plan on making changes at this time.
    I have a position in BRSIX and I have taken some profits.
  • edited November 2013
    Reply to @expatsp:

    Hello,

    This is a site that I use to read weekly until it went to be a paying membership site. Several years back it seems some, not me, were taking the Mooses calls and providing them to others for a fee. When he discovered what was going on he went to a membership type site.

    Even with this, the Moose still publishes his signals although you can not read his weekly commentary without membership. I visit the site from time-to-time to see his current call. Back in June, I added to my small cap positions based upon this call. And, in the past when I have had new money I wanted to put to work I'd visit the Moose's site to get his perspective.

    I don't follow everything that the Moose publishes ... but, you can see from review of the historical data he seems to be right more times than not.

    By my own thinking the small cap rally is a little long in the tooth for new money at this time. Although I am not currently selling, I am not buying either. So far for 2013 I have been a net seller of equities even though I have done some select buying form time-to-time in hopes of keeping a fresh team pulling the wagon.

    Hope this helps.

    Old_Skeet
  • edited November 2013
    Since there was a good discussion going on about small caps being in one's portfolio I came across some good commentary by Dr. Declan Fallon who is considered by many to be a leading technical analysis expert. Linked below is his most current charting and thinking on small caps:

    http://www.markets.fallondpicks.com/2013/11/daily-market-commentary-small-caps.html?

    Good Investing,

    Old_skeet
  • Reply to @Old_Skeet: Thanks, Skeet, for these comments and the link below.
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