Small Cap Value Equity
Product Overview
ICM's Small Cap Value product was established in 1989 with the inception of the ICM Small Company Portfolio, a no-load institutional mutual fund. The mutual fund is the largest account. There are five other separately managed institutional accounts. All the accounts, including the mutual fund, are managed in a mirror image fashion by Bill Heaphy and Sim Wooten, the co-portfolio managers of the small cap value team.
| Asset Class / Style | U.S. Equity / Value |
|---|---|
| Inception Date: | 4/1/1993 |
| Benchmark 1: | Russell 2000® Value Index |
| Benchmark 2: | Russell 2000® Index |
| Total Product Assets: | $1,833 MM as of 6/30/2010 |
Investment Process
Our investment process is designed to help us achieve our primary investment goal, which is to capture the small cap value effect and add incremental value through a rigorous stock selection process. The process can best be characterized as a bottom-up, fundamentally driven one, using traditional valuation tools. Emphasis is placed on market share, management evaluation, cash flow and balance sheet characteristics, and valuation relative to the market, company peers, and a company's own historic valuation range.
The small cap value team uses screens and other sources to identify potential candidates for further fundamental analysis. The shares of companies which pass this review are added to our accounts, which typically hold between 130 - 150 positions. Sector weightings are a residual of the individual stock selection process; but, economic considerations are reflected in the decision to buy, hold, or sell a security. Sale decisions are based largely on valuation considerations or the failure of a company to meet expectations established at the time of purchase. Risk control is accomplished through diversification and individual security quality. Historically, turnover has been less than 30%.
Performance As of 6/30/2010
| Annualized Returns (%) | |
|---|---|
*Since Inception: 04/01/1993 |
Net performance reflects the deduction of brokerage commissions and expenses incurred to manage the portfolio, and the reinvestment of dividends and other income. Gross performance does not include the deduction of investment management fees. Please refer to the full disclosure found under Additional Information.
Portfolio Highlights
| Portfolio Characteristics | As of 6/30/2010 | |
|---|---|---|
| Characteristic | ICM | Benchmark ¹ |
| P/E Ratio ³ | 17.6 | 10.8 |
| P/B Ratio ³ | 1.4 | 1.1 |
| Weighted Average Market Cap ($B) | 1.191 | 0.831 |
| Median Market Cap ($B) | 0.694 | 0.354 |
| Trailing 5-Year EPS Growth Rate | 4.0 | 4.2 |
| Weighted Avg Est ROE LTM | 7.1 | 4.5 |
¹ Russell 2000® Value Index
³ The harmonic average is used when averaging ratios that may produce extreme results due to small relative numbers in the denominator, such as P/E, P/B, etc. The harmonic average by itself does not exclude extreme values (positive or negative), it simply reduces the impact of outliers on the aggregate calculation.
| Sector Weightings* | As of 6/30/2010 | ||
|---|---|---|---|
| Sector | ICM | Benchmark ¹ | Benchmark ² |
| Producer Durables | 23.5% | 14.1% | 13.6% |
| Financial Services | 21.6% | 38.7% | 22.2% |
| Technology | 13.1% | 8.3% | 16.0% |
| Materials & Processing | 11.8% | 7.0% | 7.2% |
| Consumer Discretionary | 11.2% | 10.0% | 15.0% |
| Health Care | 6.4% | 5.8% | 13.8% |
| Energy | 4.9% | 5.5% | 4.9% |
| Cash | 4.0% | 0.0% | 0.0% |
| Utilities | 2.0% | 7.3% | 4.2% |
| Consumer Staples | 1.5% | 3.2% | 3.0% |
¹ Russell 2000® Value Index
² Russell 2000® Index
|
* The portfolio is actively managed and holdings are subject to change, and should not be considered as investment recommendations to buy individual securities. |
Additional Information
| Portfolio Materials |
|---|
| 2Q 2010 ICM Small Cap Value Equity Fact Sheet (PDF) |
| Small Cap Value Equity GIPS disclosure (PDF) |
