Small-Cap Growth Dog

Dog fanciers gather every year in Manhattan to crown a best-in-show at the annual Westminster Kennel Club Dog show. 

We will also crown a Grand Champion in a month’s time.

Jack Russell terriers are eerily similar to small-cap growth managers.  They both have trouble sitting still, and are constantly on the move. Energetic to a fault, both breeds enjoy a good tussle.

Small-cap growth funds have perhaps the highest turnover of any breed of funds, constantly turning over rocks and stocks in search of adventure.

Our small-cap growth dog is a real contender for worst-in-show…

Exhibit A)

The fund started in 1999. $10,000 invested at inception is now worth roughly $8,000....  Dividends reinvested

Exhibit B)

This dog has has trailed its category every year since inception

Exhibit C)

The fund’s skipper has been the manager of record since inception. He has never finished a year in the top half of his peer group since the fund was started over 7 years ago...ie. 50th percentile of better.

Exhibit D)

Some people improve with age...this fund underperformed its category average by over 1000 basis points last year and finished in the bottom decile of its peer group.  Unlike fine wine, this manager is not getting any better with age

We cannot figure out why anyone would have money invested in the Legg Mason Partners Small Cap Growth Fund (SBSGX)?

Please contact us if you see a reason to own this fund…

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The content contained in this blog represents the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. Underthecounter has no positions in any mutual funds mentioned.
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