SMidCap Value Strategy

SMidCap Value

Designed to outperform the benchmark over a full market cycle.

Philosophy & Approach
We believe that:

  • Investing in undervalued, high-quality businesses can generate a return premium resulting in lower absolute downside risk and superior risk-adjusted returns.
  • Superior business models have sustainable competitive advantages that can consistently generate returns on capital in excess of the cost of capital.
  • High quality businesses have better opportunities to reinvest cash flows, pursue M&A and return capital to investors, creating long-term value for shareholders.
  • Quality performs better during periods of volatility resulting in lower downside risk.
  • Identifying the intersection of quality and value requires a fundamental active, multifaceted approach analyzing profitability and financial strength specific across industries.
  • Valuation methods using cash flows and earnings is essential to determine intrinsic value — making valuation critical to realizing the return premium.
  • Typically invests in a high-conviction portfolio of approximately 50 to 70 securities with attractively valued high-quality companies with strong fundamentals.

Vehicles and Minimums

Separately Managed 25M
Other Pooled Vehicles 5M

Key Characteristics
as of 03/31/24

Assets Under Management $925.8M
Inception Date 01/01/02
Holdings 61
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Performance (%)
as of 03/31/2024

QTDYTD1-Yr Annualized3-Yrs Annualized5-Yrs Annualized10-Yrs AnnualizedSince Inception
SMidCap Value Strategy Gross of Fees8.188.1824.068.4411.738.3312.17
SMidCap Value Strategy Net of Fees7.987.9823.157.6310.887.4611.46
Russell 2500 Index6.926.9221.432.979.908.849.33
Russell 2500 Value Index6.076.0721.335.369.387.689.06
See disclosure

Why Westwood
We have applied the same investment philosophy and core principles since our founding in 1983. Our competitive advantage is centered around our research process and investing where quality and value intersect.

  • High Conviction: Differentiated investment performance starts with differentiated portfolios, focused on high active share and built from a bottom-up process.
  • Emphasis on Downside Risk: The qualitative and quantitative assessment of absolute downside risk is paramount to outperforming over the long term and ensuring the reward justifies our risk when we invest.
  • Team-Based Approach: Both our analysts and portfolio team members maintain a collaborative environment to ensure consistency of our approach over the long term to overcome individual biases during both idea generation and vetting as well as portfolio construction.
  • Our Culture: Employee ownership is a highly valuable component to creating a culture of ownership while driving superior performance.

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