Smaller capitalization companies typically have relatively lower revenues, limited product lines, lack of management depth and a smaller share of the market for their products or services than larger capitalization companies.
(As of 3/31/18)-- We believe the environment for
small capitalization companies in the U.S. remains positive due to lower tax rates, reduced regulation, increased merger and acquisition activity, and good global economic growth.
Our philosophy stems from the belief that (a) great businesses that adopt a meaningful dividend - growth capital allocation preference can generate wonderful investing outcomes over time, (b) dividends are a more reliable part of total return than capital gains, and (c) investing in
smaller capitalization companies provides the opportunity to gain exposure to less efficient components of the stock market.
Compared with US studies, our Small Cap group can also be classified as Nano capitalization companies, and our Mid Cap group equivalent to
US small capitalization companies.
Compared to investment companies that focus only on large capitalization companies, the Fund's NAV may be more volatile because it also invests in medium and
small capitalization companies.
The Russell 2000 Index is designed to measure the performance of
the small capitalization companies in the United States equities market.
The remaining assets of the Fund will be invested mid-sized companies (defined as companies having market capitalizations between (1) the market capitalization of the Russell Midcap ® Index's
smallest capitalization company; and (2) the market capitalization of the Russell Midcap ® Index's largest capitalization company.
In general,
smaller capitalization companies are also more vulnerable than larger companies to adverse business or economic developments and they may have more limited resources.
While emphasizing mid cap stocks, large cap and
smaller capitalization companies may be included as well as emerging medical treatments / technologies.
The Quality Value Fund invests in mid and
smaller capitalization companies, which involve additional risks such as limited liquidity and greater volatility.
Investments in
small capitalization companies are subject to risks such as erratic earnings patterns, competitive conditions, limited earnings history and a reliance on one or a limited number of products.
ETFs are radically changing the markets, to the point where they — and not the trading of the underlying securities — are effectively setting the prices of stocks of
smaller capitalization companies, or the potential new growth companies of the future.
Many of the companies in which the Fund invests are
smaller capitalization companies (namely, companies with a market capitalization of $ 4 billion or less).
A multi-manager fund that invest primarily in equity securities of
small capitalization companies, most of which are U.S. based.
We will continue to invest in
small capitalization companies and maintain a large investment universe because we believe that doing so increases our prospective returns.
However, this screen tends to favor firms that can't raise debt —
smaller capitalization companies and firms with volatile earnings.
Owners of
a small capitalization company might favor higher dividend yields for the reasons stated.