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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.

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Small Caps



  • edited February 2021
    Great points. MSSMX, for example, was ranked as follows in the SCG cat:

    2018: 18
    2019: 12
    2020: 1
    2021: 1

    My eyesight and analytical skills are both fading somewhat, but that doesn't look much like luck to me.

    Aside: I'm routinely accused of being lucky...retired early, defined benefit pensions, retiree health, the list goes on an on. My standard retort is, " I believe that people tend to create their own 'luck'."
  • Hi @stillers
    My standard retort is, " I believe that people tend to create their own 'luck'."
    Yes. Your statement is a worthy reflection and result of one's efforts. At times there is a lot of work and effort placed towards being "lucky". Our "lucky" has kept us invested in U.S. equity and bonds since the financial melt of 2008. We've avoided, by choice; other global equity/bond markets. We have no complaints. But, things/trends change for a variety of reasons; not unlike the close watch now of the recent deterioration of favorable bond pricing. Is the current trend of rising yields a blip or what?

    ---Malcolm Gladwell
    As Gladwell tells it, the rule goes like this: it takes 10,000 hours of intensive practice to achieve mastery of complex skills and materials, like playing the violin or getting as good as Bill Gates at computer programming.

    Obviously, the desire in a subject matter must exist, too; as well as a teacher(s), if needed. At some point, one may become intuitive to a challenge. But, much may be learned to turn luck in one's favor, eh? All is not or forever perfect; but may be shaped more properly.

    This is a very loose overview, and yes; circumstances beyond one's control do happen, as in, where and when one was born. Many variables exist.

  • @observant1 et al - revisted this thread by searching for FSMAX - Fidelity calls it a Mid-Cap Value fund and M* a Mid Cap Blend but MFO Premium categorizes it as a Small Cap Growth - which complicates things because if you look at FSMAX against the small cap growth peers - it trails a lot. Anyone know why? It it just a Lipper category thing?
  • @JonGaltill: I wonder if the category matters because it's an index fund holding 3,200 stocks. I would not compare it to a managed small or mid cap.
  • I hold a large position in this index through my 401k plan. It really is a small/mid cap blended fund. It's a great fund to get exposure to the rest of the U.S. market that isn't the S&P 500 and that's how its used in my 401k. It's done quite well over the long term. Do any of you have any recommendations on actively managed small cap blended funds that you hold or like? I've been running some screens but haven't located one that I really like yet. I'm looking for blend fund here -- not growth -- because I want some exposure to financials, industrials, consumer cyclical, etc. thanks!
  • I have PVIVX since 11/10/20 (this cycle). It was one of small cap funds I had when small cap was running 5-6 yrs ago.
  • edited February 2021
    M* currently places FSMAX in the Mid Blend category but in the Mid Growth style box.
    Category placements are based on three years of style box data.
    This article discusses recent fund style box moves at M*. Link

    It appears that Fidelity, Lipper, and M* all use different criteria for determining fund categories.
    Sometimes certain funds won't fit neatly within the available categories.
    For example, M* classifies NWFFX as a Diversified Emerging Markets fund but developed markets comprised 48.7% of its assets as of September 2020.
    These type of anomolies can make fund category comparisons challenging.
  • @gk3105gklm. Thanks much for sharing this. Will take a look. Paradigm Select comes up also on my screen
  • I haven't done any sort of deep dive in this space but I own and have been happy with FTHNX.
  • MikeW said:

    @gk3105gklm. Thanks much for sharing this. Will take a look. Paradigm Select comes up also on my screen

    Coincidentally, I was just coming on to see what people’s thoughts were on PFSLX. It’s a long-term Great Owl, good Martin/Sortino ratios, MFO rating of 5, and tax efficient with two female advisors with a decent amount of skin in the game. I’m surprised it’s never been discussed here.
  • @MrRuffles Yes agreed on PFSLX... I will read up on it over next few days. Also, you should take a look at Davenport Small cap focus fund. Just had a write-up in Barrons over the weekend by our own @LewisBraham. If we're lucky, Lewis might comment on this. Definitely beats to its own drummer with strong performance.

  • edited February 2021
    @MikeW Thanks for the heads up. It looks intriguing. I found a brief article on Kiplinger’s from December 2020 about DSCPX:

    Davenport Small Cap Focus (DSCPX) Clobbers the Broader Market

    It shows it fell right between the two Paradigm funds performance-wise for the past five years. The only concern I have is that its higher turnover (v. PFSLX) might be more of an issue for a taxable account.
  • Thanks. I think Davenport is a good small-cap fund overall. The one concern I expressed in the article is its concentration for a small-cap fund, which increases individual company risk, but this is mitigated by investing with CEOs who have a lot of skin in the game. Such CEOs don't want their companies to implode because they lose money alongside every other shareholder. The other concern is just a general one about active funds. Hot funds tend to cool off after a while. The nice thing about Davenport is it's done well, but doesn't hold the tech and biotech small-cap darlings. So hopefully, it can continue to do well.
  • Thanks very much for providing your additional thoughts @LewisBraham. Their investing in travel related companies is quite interesting. I wouldn't have the balls to do it personally but they really seem to do their research on companies and have been successful at picking winners.
  • edited February 2021
    @mikew investing in travel is brilliant imho. There’s so much pent up demand. Everyone stuck at home and travel restrictions. Travel Summer to Fall is where the growth is at.

    Note: I know nothing about the fund... just commenting about your reference to travel.
  • Yes John certainly how I feel being cooped up in my home! I yearn to escape.
  • A bit early but the valuation is probably low. Instead we bought new bicycle tires and camping gears instead. Demand for bikes was very high last year.
  • @MrRuffles. I have looked on the Paradigm website but there is very little info about Paradigm Select. Their performance is top notch on a risk adjusted and total performance basis but I wish they published a manager commentary so we could better understand their approach to stock selection and portfolio management. Its an intriguing fund but hard to evaluate. Not sure if anyone else has any thoughts. I'm evaluating a few other small blend candidates.
  • edited February 2021
    This market is just too expensive. Small, large or in-between. I'm retired, 66. I'm overweight bonds, for ballast purposes, and the dividends--- which have been respectable, despite ZIRP. When I see the next opportunity, I'm going to be looking at Canadian banks--- AGAIN, for the dividends, not for growth.
  • FYI, here are some optimistic market observations from an article in yesterday's WSJ. Here are some excerpts:

    "Shares of small companies and sectors of the market like financials and energy notched strong gains, while the broader stock market's moves were more muted. [...]

    The jump in bond yields comes as the economy seems to be improving, stoking enthusiasm about a speedy recovery. New data on Friday showed that business activity in the U.S. private sector held up, boosted by accelerating service activity and manufacturing output. That followed a report Wednesday that showed consumers used stimulus checks to boost retail spending in January to the largest increase in seven months. [...]

    JPMorgan Chase strategists said Friday that they expect consumers to shatter expectations for the rest of the year given expected fiscal stimulus and economic reopening as the pandemic eases. Meanwhile, Federal Reserve Bank of Boston President Eric Rosengren said he expects the economy to pick up steam as vaccines are distributed.

    This optimistic outlook led investors to ditch Treasurys and pile into economically sensitive stocks in the financials and energy sectors, helping those groups notch big weekly gains."
  • +1. Thank you.
  • Circling back to this topic. @BenWP you make a good point regarding the fact that FSMAX is an index fund with 3200. If I ignore that for the moment, MFO Premium really doesn't like the fund (in it's category) - rating the fund a 2 BUT MFO Premium categorizes it in Small Cap Growth which pits it agains WAMCX and that doesn't seem fair. @Observant1 has the summary of what FSMAX should be categorized as.

    In the past 5 years, it's handily beat the S&P 500 and even last year by 19.4 - so why such a low rating of 2? It's one of the better options in a 401k I'm managing which is why I'm interested in opinions on it.
  • edited February 2021
    BTW @Stillers - re: MACGX ... it looks like you really can buy a great fund at the wrong time (or the high) ... perhaps I should have waited for a dip. The fund is UP 13.37% this year but ... its down 7.83% for me YTD. Eesh. Good thing I purchased for the long term.

    BUT it's one I'll watch and learn from this year. I know it was impacted by FSLY. Still believe in it. I just don't have any other funds that are down 8 percent for the year. <-- I sold almost all of my bond funds.
  • @JonGaltIII. You are correct about FSMAX. It is a small/mid cap blend fund and in that category it actually is in the top 10% for performance. I hold the equivalent of this fund in my 401k and am very pleased with it.
  • edited November 2021
    Taking a closer look at two small cap growth funds - MSSMX and WAMCX in a port.

    MSSMX - I am not understanding the MFO Rating of 1 for the fund over the 1 year period. It's had an APR of 81.2 and Martin is 9.48 (which is not best for the category) but is there something else I'm missing? This fund has had a stellar run against the S&P etc. and is plus 36.6 vs. peers over the same time period. Is it just the Martin affecting the lowest ranking?

    WAMCX - MFO rating of 2 over the 1 year is more easily understood as the performance vs. S&P has trailed for the first time in a long time and vs. peers is a bit lower. I've been encouraged by recent performance but over 12 months ... its not performed as strong as some other small cap growth funds or as it's history.

    Interested in any general opinions of the two funds above along with any explanation on the MFO rating of MSSMX. TIA.
  • So I sold out of MSSMX as it began its slide in early 2021 and just recently bought back 1/2 position in it.

    I don't follow/use MFO Ratings so can't help you there. You might want to check its M* SCG 1-yr rating which is still top 3%.

    And it's still best in class for 3-yr, 5-yr and 10-yr periods, and Dennis Lynch is still managing it.

    From afar: I think you bought this fund at/near its peak, suffered through its slide, and are about to sell it when it's (IMO, that's why I bought it back) likely to get back into its groove. VERY volatile fund as you know. Maybe too volatile for you?

    Good luck whatever you decide.
  • edited November 2021
    @stillers - thanks for the response. I DID buy MSSMX at the high this year but have no issue holding on to it and it's volatility. It's delivered over the LT. I was just looking for more color as to why MFO rated it so low for 1 year when the returns were so high etc.

    Really like the performance of DMCRX but its closed to investors and I prefer my two over ARTSX and BUFSX. So, I'm certainly inclined to let them ride for a while. But always curious and open to learn about alternate opinions on funds.

    Edit Add: WAMVX looks like an interesting one to look closer at. High ER but remarkable returns over the years. Wish I could view my WAMCX in Fidelity Research but not anymore as its N/A to retail. Never saw a notice on it.
  • @JonGaltill: DMCRX is closed, but you can get the same managers in their SCG (DVSMX) and SMID (DSMDX) funds. The performance of the former has been superior to MSSMX.
  • BenWP said:

    @JonGaltill: DMCRX is closed, but you can get the same managers in their SCG (DVSMX) and SMID (DSMDX) funds. The performance of the former has been superior to MSSMX.

    "Whoa! Nellie!" (Thanks Keith)

    DSMDX is a MCG fund so TR comparisons with MSSMX are not apples-to-apples. Either way, MSSMX has better TR over 1-yr (only period available other than YTD) 81% to 51%. How is that "superior"?

    DVSMX IS a SCG fund like MSSMX but MSSMX easily beats DVSMX over 1-yr, 81% to 61%, and over 3-yrs, 55% to 37%. How is that "superior"?

    You MUST be looking ONLY at YTD TRs in which DSMDX and DVSMX and are a bit better?
  • @stillers: I didn’t intend to bring out the Keith Jackson in you. I transposed the fund symbols on the chart I (mis)used last night. My bad. MSSMX has superior LT performance to DVSMX. The MS fund did have one sickening decline in the past year that might have shaken the most ardent fan’s resolve, while DVSMX has moved more steadily higher over the same period. I did not compare MSSMX to DSMDX; the “former” in my post refers to DVSMX only. Do you know what propelled MSSMX to its fantastic performance in 2020?
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