Extended Small Cap

Strategy Highlights

  • The Extended Small Cap strategy is benchmarked to the Russell 2000® Value Index.
  • As the name implies, the Extended strategy reaches down into the micro cap universe and up into the mid cap universe, expanding its market cap range from under $100 million up beyond the top end of the Russell 2000® Value Index.
    • Actual exposures in micro and mid cap will vary, with micro cap held to less than 35% of the portfolio and mid cap to 15%.
    • The weighted average market capitalization is generally reflective of the market cap of the Russell 2000® Value Index.
  • Micro cap exposure: Companies at the lower end of the market cap spectrum may have little or no sell-side research coverage which can lead to pricing inefficiencies.
  • Mid cap exposure: The Portfolio Manager may invest in mid cap companies where there is no compelling small cap buy in the same industry, or when industry market conditions suggest that mid caps may provide favorable performance.
  • Portfolios generally demonstrate valuations below and growth characteristics at or above those of the benchmark.
  • Portfolios are actively managed using a bottom-up investment approach, and the Portfolio Manager does not attempt to time the markets. Cash is generally less than 5% of the portfolio.
  • Our approach seeks to minimize risk through diversification. Portfolios generally hold between 225 and 350 stocks, with no single position typically exceeding 5% of the total portfolio.


The objective of the Extended Small Cap strategy is to consistently outperform the Russell 2000® Value Index and our peers over a complete market cycle. The Portfolio Manager seeks to identify opportunities where a company is overlooked or its intrinsic value potential is undervalued by the market; in some cases, this value potential has yet to develop. A key feature of our approach is the ability to take a longer-term view, tracking a specific thesis against mileposts, often translating that progress to position size. Portfolio construction aims to provide characteristics (i.e., weighted average market cap) representative of the Russell 2000® Value Index but that reflect the overlooked qualities we seek.

Click here to view the current Extended Small Cap Commentary.

Extended Small Cap | Annualized Returns as of 3/31/2024

† Not Annualized. Source: Advent APX.

Quarterly Fact Sheet

Download a detailed quarterly strategy fact sheet (pdf). Download PDF

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.  A complete list of all securities recommended by KCM in the preceding year, a full compliant GIPS Composite Report, and the list of composite descriptions are available upon request from KCM at 10829 Olive Blvd., Suite 100. St. Louis, MO, 63141.

Kennedy Capital Management LLC (“KCM”) is a Delaware limited liability company headquartered in Missouri. KCM is registered as an investment adviser with the Securities and Exchange Commission under the Investment Advisers Act of 1940. Registration with the SEC does not imply any level of skill or training.  Clients of the Firm include U.S. corporations, pension and profit sharing funds, colleges and universities, trusts, not-for-profit organizations, foundations, and individuals.  KCM claims compliance with the Global Investment Performance Standards (GIPS®).  GIPS® is a registered trademark of CFA Institute.  CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.  (GIPS®) are a set of standardized, industry-wide ethical principles that provide investment firms with guidance on calculating and reporting their investment results to prospective clients to ensure fair representation and full disclosure of an investment firm’s performance history.

The Extended Small Cap Composite invest in companies with a low relative P/E and price/book valuation. Such companies generally exhibit relatively lower analyst coverage and institutional ownership than other comparable companies in the Russell 2000® Value Index. The U.S. Dollar is the currency used to express performance.

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.

Returns are presented gross and net of investment advisory fees and include the reinvestment of all income.  Gross of fee returns reflect the deduction of transaction costs and custodian fees but do not reflect the deduction of investment advisory fees.  Net of fee performance is calculated using gross returns less the actual applicable annual management fee applied monthly.  Past performance is not indicative of future results. A client’s return will be reduced by the advisory fees as described in 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 13.32% annual return.  Form ADV Part 2A is available upon request. 

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 third party sources 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.  Generally, any such variances are researched and reconciled within thirty days of the period end.

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.  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® Value Index measures the performance of small-cap value segment of the U.S. equity universe. It includes those Russell 2000 companies with relatively lower price-to-book ratios, lower I/B/E/S forecast medium term (2 year) growth and lower sales per share historical growth (5 year) . The Russell 2000® Value Index is constructed to provide a comprehensive and unbiased barometer for the small-cap value segment. The Index is completely reconstituted annually to ensure new and growing equites are included and that the represented companies continue to reflect value characteristics.

The Russell 2000® Value 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 GIPS composite report. The Verification and Performance Examination Report does not cover the benchmark returns included in the GIPS composite report.  Investors cannot invest directly in an Index.

Michael Bertz, Ph.D., P.E., CFA®

Portfolio Manager

MICHAEL BERTZ, Ph.D., P.E., CFA®, Portfolio Manager for the Extended Small Cap strategy. Mr. Bertz began his investment career in 2000 and prior to joining Kennedy Capital, he was a senior research analyst at WR Hambrecht & Co in San Francisco, California.  Michael has held roles as a technology analyst at Morgan Keegan & Company, performing cognitive science and engineering research at Georgia Tech, and as a structural engineer at KPFF Consulting Engineers in Irvine, California.  Mr. Bertz joined KCM in 2006 as a research analyst and served as Director of Research from 2007 to 2013.   Michael was awarded a Ph.D. in Structural Engineering from the Georgia Institute of Technology in 1998, following a Masters in 1994. Mr. Bertz has also earned a B.E.D. in Architecture and a B.S. in Engineering Physics from Miami University in Oxford, Ohio.

Sean McMahon

Assistant Portfolio Manager

SEAN MCMAHON, Portfolio Manager for the Micro Cap and Micro Cap Opportunities strategies and Assistant Portfolio Manager for the Extended Small Cap strategy.  Sean joined KCM in 2005 after gaining experience in equity analysis through his internship at KCM.  Mr. McMahon earned a B.S. in Business Administration from the University of Missouri – St. Louis and an M.B.A. from Washington University.

Robert Van Bergen, CFA®

Assistant Portfolio Manager, Research Analyst

ROBERT VAN BERGEN, CFA®, Assistant Portfolio Manager for the Extended Small Cap strategy and Research Analyst.  As a Research Analyst at KCM, Rob is responsible for evaluating and monitoring selected companies within the real estate and utilities sectors of KCM’s universe.  Prior to joining the firm in April 2019, Mr. Van Bergen spent nearly 14 years as a Portfolio Manager and Senior Analyst at Harrison Street Securities, a dedicated REIT investment manager.  Rob earned his B.A. in Economics from Northwestern University.