Small Cap Select SRI

Information as of 9/30/2017

Strategy Highlights

  • Select Socially Responsible Investing (SRI) caters to investors whose investment guidelines include social restrictions.
  • The Small Cap Select SRI strategy is a small core strategy benchmarked to the Russell 2000® Index.
  • The Portfolio Manager employs a “buy and hold” approach emphasizing investment in companies he believes are strong prospects rather than trading stocks.
  • Portfolios generally demonstrate valuations below and ROA characteristics at or above those of the Russell 2000® benchmark.
  • Portfolios are actively managed using a bottom-up investment approach, and the Portfolio Manager does not attempt to time the markets.
  • Portfolios generally hold between 40 and 55 stocks, with no one stock typically exceeding 4% of a total portfolio.

Objective

The objective of the Small Cap Select SRI strategy is to consistently outperform the Russell 2000® Index over a complete market cycle. The Portfolio Manager seeks to achieve this performance while avoiding investing in companies engaged in businesses that clients typically find objectionable. The Portfolio Manager looks for inefficiencies in the small cap universe, focusing on companies that in his opinion have demonstrated the potential to deliver superior returns to shareholders.

Small Cap Select SRI | Annualized Returns as of 9/30/2017

† Not Annualized. Source: Advent APX.

Quarterly Fact Sheet

Download a detailed quarterly strategy fact sheet (pdf) which includes the Annual Disclosure Presentation.

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Although the statements of fact and data in this report have been obtained from, and are based upon, sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed. All opinions included in this report constitute the Firm’s judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any security. Past performance is not a guarantee of future results.

Performance returns presented Gross of Fees do not reflect the deduction of investment advisory fees. A client’s return will be reduced by the advisory fees as described in the Form ADV Part 2A and other expenses incurred by the account. For example, an annual advisory fee of 1% compounded quarterly over 10 years will reduce a gross 14.44% annual return to a net 13.24% annual return. Form ADV Part 2A is available upon request. Past performance is not indicative of future results.

The performance figures reported herein are unaudited, may be based upon information obtained via electronic data sources (“feeds”) and may be subject to change. Data feeds from many of KCM clients’ selected custodians are obtained through a third party, and are used to compare custodial data to KCM’s client account records as frequently as daily. Monthly, KCM reviews clients’ account holdings along with cash and share quantities against the custodial statements. In some instances, variances may exist between final audited custodial information and the information KCM obtains via such data feeds. All variances are typically reconciled to the applicable account no later than each month-end.

Composite specific data provided within this presentation has been calculated from accounts that are discretionary as defined in this paragraph. The assets shown are derived only from discretionary accounts. Non-discretionary accounts, as defined by KCM, are accounts that are not included in the composite due to one or any combination of the following criteria: there were significant cash inflows or outflows within the account; the account’s asset level did not meet the minimum requirement to remain in the composite; the account assets are managed by others using our non-discretionary model. The temporary removal of such an account occurs at the beginning of the month and the account re-enters the composite the month after the criteria has been met.

Russell Investment Group 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 and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a presentation of Kennedy Capital Management, Inc. Russell Investment Group is not responsible for the formatting or configuration of this material or for any inaccuracy in Kennedy Capital Management’s presentation thereof.

The Russell 2000® Index is used as the benchmark. The Index is unmanaged and represents total returns including reinvestment of dividends. The benchmark is used for comparative purposes only and generally reflects the comparable risk or investment style of the Firm’s strategy. The investment portfolios underlying the Index are different from the investments in the portfolios managed by the Firm. Certain accounts may also use other benchmarks not listed in the Annual Disclosure Presentation. The Composite Disclosure Presentation does not cover the benchmark returns included in the Annual Disclosure Presentation.

The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set.

Terrence Raterman, CPA, CFA®

Portfolio Manager

Terrence Raterman, CPA, CFA®, a Vice President, is the Portfolio Manager of the Small Cap Select and Select SRI portfolios. Mr. Raterman began his investment career in 1993 and has extensive experience in the audit, taxation, and valuation of closely held companies. Prior to joining Kennedy Capital, Terry held management/CFO roles in the railroad and energy industries. He joined KCM in 1997 as an equity analyst, and was promoted to Portfolio Manager of the Small Cap Select product in January of 2002. Terry holds a BS in Accounting and Finance and an MS in Economics, with honors, from Southern Illinois University at Edwardsville.

Alex Mosman, CFA®

Assistant Portfolio Manager, Research Analyst

Alex Mosman, CFA®, is the  Assistant Portfolio Manager for the Small Cap Select and Small Cap Select SRI strategies.  He also serves as a Research Analyst at KCM, responsible for selecting and monitoring securities in the information technology sector of KCM’s universe.    Alex joined KCM after gaining experience in equity analysis through his two-year internship at KCM.  He received a BS, summa cum laude, in Business Administration with a concentration in Finance from Saint Louis University.

Troy Beachler, CMT®

Senior Equity Trader

Troy Beachler, CMT®, is the Senior Equity Trader for the Small Cap Select, Small Cap Select SRI, and Extended Small Cap strategies. Before joining KCM, Troy was a retail trader for three years with Berthel, Fisher & Company in Marion, Iowa. He earned a B.B.A. in Finance from the University of Iowa and has also passed the Equity Trader Limited Representative, General Securities Representative, General Securities Principal, Registered Options Principal, and Uniform Securities Agent State Law examinations.