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Small Company Equity Strategy

The strategy seeks to outperform the Russell 2000 Index with less volatility over a full market cycle.  

  • Dedicated small cap team with experience over market cycles
  • Research process focused on four stages of the equity investment cycle
  • Disciplined approach for each stage of the equity investment cycle
  • Compelling risk-return portfolio metrics 
Core
STYLE
Russell 2000
BENCHMARK
April 1, 2013
INCEPTION

Philosophy

The Small Company Equity team believes that equity investments experience a four stage investment cycle (Low Expectations, Rising Expectations, High Expectations, Falling Expectations). The research focus and goal is differentiated for each stage of the investment cycle. Stock selection is focused on four critical business model factors: revenue growth, profit margins, free cash flow conversion, and capital deployment.

Portfolio Construction

  • Team seeks to invest in a diversified portfolio of 70-90 companies. 
  • The starting universe typically consists of securities with a market capitalization less than $5 billion and adequate liquidity. 
  • Team conducts a thorough analysis of each name, with specific emphasis on the business model, industry dynamics, and corporate strategy.
  • The strategy may not invest more than 5% in any single security at the time of purchase, nor shall it hold more than 25% of assets in a single industry. 
  • Individual position sizes vary but are generally within the range of 1.0% - 2.0%. The typical number of stocks in the portfolio varies depending on market conditions and analyst conviction; however, it will typically range between 70-90. 
  • Portfolio turnover has averaged 60% over the previous five years.

Strategy Facts

As of 3/31/2022
 Assets Under Management
  $1.1 billion
 eVestment Universe  U.S. Small Cap Core Equity Universe
 Investment Vehicles  Separate Account
 Mutual Fund

 

Meet the Team

Jason Ronovech

Jason V. Ronovech, CFA

Vice President, Senior Portfolio Manager

Career Summary
Sentinel Investments
Paradigm Capital Management
Prudential Financial

Education 
BA - Hamilton College

Meet Jason Ronovech
Mark Militello

Mark C. Militello, CFA

Vice President, Senior Equity Research Analyst

Career Summary
Sentinel Group
Weatherbie Capital, LLC
Paradigm Capital Management

Education
BA - University of Connecticut
MA - University of Connecticut

Meet Mark Militello
John Stewart

John T. Stewart

Assistant Vice President, Senior Equity Research Analyst

Career Summary
Sentinel Group
National Life Insurance Company
General Dynamics

Education
BA - University of Vermont
MBA - University of Vermont

Meet John Stewart
Lenny Valvano

Lenny A. Valvano, CFA

Equity Research Analyst

Career Summary
Paradigm Capital Management

Education 
BS - Siena College

Meet Lenny Valvano
Meet Public Equity Team
explorer in cave

Explore the Benefits of Profitable Small Cap Stocks

Explore our latest white paper for a more detailed look inside the benefits of profitable small cap stocks. Small cap stocks have generated attractive investment returns over the long term. In addition, the profitable segment of small cap stocks has outperformed unprofitable small cap stocks with significantly lower volatility over time. The Fort Washington Small Company Equity strategy only invests in profitable small cap stocks, avoiding unprofitable small cap stocks and reducing the risk levels of investing in small cap stocks. 
 
Exploring the Benefits of Profitable Small Cap Stocks
Exploring the Benefits of Profitable Small Cap Stocks

Resources

Small Company Equity Commentary (PDF)

Small Company Equity Fact Sheet (PDF)

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IMPORTANT DISCLOSURES
Frank Russell Company (FRC) is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto. The presentation may contain confidential information pertaining to FRC and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Fort Washington presentation of the Russell Index data. Frank Russell Company is not responsible for the formatting or configuration of this material or for any inaccuracy in Fort Washington’s presentation thereof.