Is it too early for a long term (10-15 yrs) investor to reallocate to small caps? The SCG landscape has been beaten down and some of the most reputable MF/ETFs have fallen to the middle of the pack (performance-wise). I've owned BCSIX for over 10 years and looking back, glad I took profits when I rebalanced (several times). Also, own PRNHX and the recent 3 yrs has been tough due to the Fund's aggressive nature.
Any MF/ETF's that you are considering or own?
Comments
Like Mike M, I am also not very interested in small-cap growth funds.
Many small-cap growth funds are just too speculative for me.
https://www.morningstar.com/stocks/xnys/asc/dividends
https://www.stockrover.com/world/insight/summary/Quotes/ASC
https://www.tipranks.com/stocks/asc
Thanks for your time, Derf
To quibble a bit, I consider 10-15 years intermediate term , but not long term (20-30 years). To wit - it’s largely a matter of semantics. There’s been some discussion of small caps on the board. I’ll try to link something. Truth is - it all depends on the economy and the direction of interest rates. If rates continue to decline small caps should benefit as they need easy access to the borrowing trough and tend to borrow at higher rates.
I’d have about 3-5% of my money tilted toward small caps myself. The thing is - When they jump … it’s often by a lot. So, if you feel like gambling, throw a little that way and let it ride. But check what you already own and make sure you’re not already exposed to the sector through some existing funds.
https://www.mutualfundobserver.com/discuss/discussion/61579/it-s-almost-time-to-buy-small-caps#latest
9% in small value and
5% in small blend.
How much of that 14% is the result of my own single-stock selections? It almost doesn't matter, eh? If what I really want is to AVOID small caps altogether? Just, "never say never." I'm pleased with what I hold. Otherwise, why hold those things?
https://www.cnbc.com/video/2023/11/10/pro-watch-cnbcas-full-interview-with-trivariates-adam-parker-and-requisites-bryn-talkington.html
Included was a discussion of small caps. He stated (paraphrasing) we are at least 3-6 months away in this bizness/market cycle from SCs being a proper/correct play.
That said, scoping of all (NTF and TF) SC MFs available via Fido shows the fund families (named a few below) I'd be interested in if I was interested in SCs :
https://fundresearch.fidelity.com/fund-screener/results/table/morningstar-rankings/mstarCategoryRank3Year/asc/1?assetClass=DSTK&category=SB,SG,SV&order=assetClass,category
Aegis
DWS
Hennessy
Kinetics
Oberweis
Bridgeway
I like smalls, and always hold some. I wish I had owned FMIMX all that time. But it always looked so boring. M* calls it a mid-cap, but it's currently 67% small. I own some now, and I expect to buy more in the future.
I own RWJ, and I am looking at CALF. Both are on the lower end of the debt/equity ratio, as is FMIMX for that matter.
Keep in mind that any etf based on the S&P 400 will tick the small cap box for M*. In that space I own XMHQ. It also has a low D/E ratio, as do most things on my shopping list. Seems to me that the current environment encourages an eye on debt exposure.
I am keeping an eye on GRPM to see how Invesco's GARP strategy works in that space. Until recently it was an equal-weight 400 fund. I have been pleased with SPGP, which has a longer track record, but in the 500.
Buy now, or wait? I might do some early shopping in the taxable, but mostly I think I'll wait till the budget mess is settled.
Out of curiosity, checked Price’s growth oriented fund of funds, PRSGX. Didn’t this one used to be called “Spectrum Growth”? Now it carries a different name. Anyhow, their most recent report gives a range of 0-25% allocated to small cap funds. But the fund was holding only 10% actual as of June ‘23.
Perhaps relevant to the discussion is the possibility / desirability of investors like KHaw24 considering some good allocation funds (They come in a variety of flavors) fitting one’s risk profile and allowing the manager(s) to make those decisions? I think small caps are fertile ground for patient investors; but they can give you whiplash over shorter periods.
If you look very long periods say rolling 15-20 years, good returns have been around 7-9% range which include multiple crashes and booms. If your time horizon is not that long or you cannot accept the volatility of such long periods, then good returns associated with reduced portfolio risk will also be less.
People can checkout DSMC's overlaps here. It's not what I expected.
After years of bloated Vanguard indexes, I get what you're saying about too many holdings.
IF indexing SC, a better index is S&P SC 600 with ETFs IJR, SPSM.
And I never gave up on active management. The main issues have been availability and cost. Active etf's solve that. And it seems that people are interested.
Not sure what you mean about Vitale - he made those comments at close of market last Friday, not yesterday.
BRUFX, a MCV fund, was only UP 1.66% yesterday.
… Up + 57.7% in 2020 / Down - 37% in 2022. I have to ask - Who in their right mind would want to own something like that? ISTM you’d have to have ice in your veins. FWIW - M*’s analysts award it a “silver” rating, their second highest.
Suppose funds like that are great for speculating. But a difficult long term hold. Brings to mind @Mark’s recent quip about being left without a chair when the music stops.
Just my 2 cents, Derf
As a 30-35 year veteran of TRP’s funds (and remembering the “hay-days” of
PRNEXPRNHX it’s difficult to understand how that fund could have lost so much in 2022. Wondering if investor outflows played a part …Re: PRNEX: I'm just a hair from break-even. Big December dividend coming.