The Microcap Update
August Update 2024
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The Deupree James Microcap SMA
The Deupree James Microcap SMA seeks to provide long-term appreciation by creating a portfolio of domestic & international equities with market capitalizations that are approximately between $50 million & $2 billion.
The strategy seeks stocks that meet our quality criteria and have attractive combined valuation & momentum characteristics. We may at times take concentrated bets in certain stocks or sectors. The manager may also invest in cash, treasuries, exchange traded funds, or stocks larger than $2 billion from time to time.
Historically, small caps have outperformed large caps over extended periods. Since 1927, the largest 10% of US stocks grew at a 9.24% compound annual growth rate (CAGR), while the smallest 10% grew at an eye watering 16.33% CAGR.
We get it. Trying something new seems scary. The Greeks even had a special word, “storgē,” to describe “the love of the familiar.”
While Microcap strategies can seem volatile in isolation, the portfolio level data suggests that a 60/40 portfolio might be riskier without an allocation to Microcaps. Just as modern air travel with an experienced pilot is safer and faster than traveling by car, the inclusion of Microcaps with a skilled portfolio manager in a diversified portfolio may offer investors better returns with less risk.
To learn more about how this strategy can benefit you and your clients, click the documents below.
~Ben James, CKA®, CIMA®, Portfolio Manager
For more information, feel free to email avery@deupreejames.com or call 318.562.1035
Whitepaper Data
2023 Fact Sheet
Additional Research
