SMID Cap Growth

Strategy Highlights

  • The SMID Cap Growth Strategy is benchmarked to the Russell 2500™ Growth index.
  • The Portfolio Managers seek companies with durable business models able to deploy assets into growing sets of opportunities providing superior rates of return.
  • The portfolio is managed with a diversified approach across sectors and the growth life cycle.
  • The Portfolio Managers invests across the full spectrum of growth by classifying these investments into three categories:
    • Early Growth
    • Steady Compounder
    • Material Positive Change
  • Portfolios generally demonstrate a higher level of cash-flow return on investment and a greater spread to the cost of capital than the Russell 2500™ Growth Index.
  • Portfolios are actively managed using a bottom-up investment approach and the Portfolio Managers do not attempt to time the market, generally holding less than 5% cash.
  • Portfolios generally hold between 75-100 stocks, with no one stock typically exceeding 5% of a total portfolio.

Objective

To outperform the Russell 2500™ Growth index by identifying mid and small cap companies with a growing asset base and a stable or growing return on invested capital. We seek to identify these companies at valuation levels that allow for significant price appreciation.

Click here to view the current SMID Cap Growth Commentary.

SMID Cap Growth | Annualized Returns as of 3/31/2022

† 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 fully 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, Inc. (“KCM”) is a Missouri corporation 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.

The SMID Cap Growth Composite invests in growth securities of predominately small and mid cap companies that generally have a market capitalization that is reflective of the Russell 2500™ Growth Index. The Manager seeks companies with durable business models able to deploy assets into growing sets of opportunities providing superior rates of return. For comparison purposes the composite is measured against the Russell 2500™ Growth Index. The U.S. Dollar is the currency used to express performance.

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. The 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. 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 2500™ Growth Index measures the performance of the small to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500™ Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2500™ Growth Index is constructed to provide a comprehensive and unbiased barometer of the small to mid-cap growth market. The Index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small to mid-cap opportunity set and that the represented companies continue to reflect growth characteristics.

The Russell 2500™ Growth 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.

Jean Barnard, CFA®

Director of Research, Portfolio Manager

JEAN BARNARD, CFA®, Director of Research and Portfolio Manager for the Small Cap Growth and SMID Cap Growth strategies. Jean also serves as a member of the Board of Directors. Ms. Barnard is responsible for the coordination and direction of internal research operations.  Prior to joining the firm in 2018, most recently Jean was Executive Vice President and Co-Portfolio Manager of the Janus Classic Growth Strategy (Janus Fund), a position she held since January 2016 after serving in the role of Assistant Portfolio Manager from 2014. Previously as the Sector Lead for Communications, Ms. Barnard led a team of analysts covering the internet, media, and telecommunications sectors globally. Jean began her career at Janus Capital in 1992 as an equity research analyst, soon becoming a key founding member of the firm’s international team supporting the Janus Worldwide and Overseas strategies.  Ms. Barnard earned a B.A. in Economics and Political Science from Yale University, graduating with distinction in both majors.

Ryan Dunnegan, CPA

Portfolio Manager, Research Analyst

RYAN DUNNEGAN, CPA, Portfolio Manager for the Small Cap Growth and SMID Cap Growth strategies and Research Analyst. As a Research Analyst at KCM, Mr.  Dunnegan is responsible for selecting and monitoring securities within the health care sector of KCM's universe. Ryan also co-manages the Equity Research Internship Program.  Mr. Dunnegan began his investment career at KCM in 2006 during a two-year internship. Ryan subsequently transitioned to the role of Associate Equity Analyst with KCM in 2008 through 2009, while simultaneously earning his Master of Accounting degree. Following completion of his Master's degree, Mr. Dunnegan spent nearly four years at KPMG LLP where he provided audit services in accordance with U.S. GAAP and IFRS standards to an array of public and privately held global companies. Ryan earned both his B.S. in Business Administration with a concentration in Accounting and a Masters of Accounting from Saint Louis University.