Our Small Cap Value style captures return with a diversified portfolio of genuine-value, small cap stocks. Our investment process identifies the best values in each sector and manages sector risk to moderate relative performance variability.

• Style integrity is achieved through stringent adherence to the investment process.
• Fundamental research and valuation is the foundation of all buy and sell decisions.
• Well-diversified portfolios with representation in all economic sectors moderate volatility.
• Captures the attractive risk/reward relationship inherent in the long-run performance of the small cap value asset class.
  

Valuation analysis
Our process begins with the style's proprietary valuation analysis, designed to identify the small cap value stocks most likely to outperform. Built on extensive research studies covering 30 years of data, the analysis identifies the most under-priced securities on a sector-by-sector basis. The valuation analysis allows us to identify and focus on the fundamental operations of the candidate stocks that meet the style's stringent valuation criteria. Portfolios hold 90 to 110 of the best value ideas across all sectors and are fully invested.

Fundamental research
Fundamental research is the backbone of the style. We spend the majority of our time analyzing stocks on a bottom-up basis, including meeting with company managements, analyzing company financial statements, and meeting with regional and Wall Street analysts.

The focus of the style's fundamental research is to determine if one or more of the style's five "Value Buy Criteria" are present within the investment candidates generated from the valuation analysis. We believe the existence of one or more of these "Value Buy Criteria" increases the likelihood that the stock will return to fair value within 6 to 24 months.

Strict sell disciplines
Just as our purchase disciplines are based on bottom-up fundamentals and valuation, our sell disciplines follow the same philosophy. The Small Cap Value team adheres to four sell disciplines, which are designed to ensure that our clients' portfolios hold the best small cap value ideas across all sectors.