Small Equity Strategy Fuels Top Performing U.S. Equity Funds

A US dollar bank note is seen in this illustration taken November 23, 2021. REUTERS / Murad Sezer / Illustration / File Photo

Register now for FREE and unlimited access to


NEW YORK, Dec.23 (Reuters) – The top-performing actively managed US equity funds of 2021 were primarily focused on small caps as a strategy, according to Morningstar data.

The top performing actively managed U.S. equity fund of the year was Bridgeway Small-Cap Value, which returned 61.5%, according to Morningstar data through December 15, while eight of the Top 10 funds also had small caps as a strategy. .

Some small-cap funds outperformed on a bet on cyclical stocks which surged as the US economy continued to recover from the coronavirus pandemic.

Register now for FREE and unlimited access to


“In our opinion, cyclical and consumer stocks are currently some of the cheapest stocks we see in the market,” said Ken Farsalas of the Oberweis Micro-Cap fund, which returned 41.3% for the year, according to Morningstar data, and was ranked # 2. 6. Farsalas said, “There are consumer companies that trade as if the economy is going into recession.

This strong performance came as concerns over sustained high inflation and supply chain bottlenecks weighed on small business stocks overall. The Russell 2000 benchmark of small companies has gained 12.5% ​​for the year to date, half of the 25% gain of the S&P 500 Large Cap Index on December 21.

Farsalas pinned the underperformance of small-cap stocks following the Federal Reserve’s withdrawal from its emergency support to the economy, weighing on the type of high-growth speculative stocks that rallied early in the decade. pandemic in 2020.

Among the winners of his fund was retailer Boot Barn Holdings Inc (BOOT.N), which is up nearly 152% since early January.

Bridgeway was not immediately available to comment on its strategy.

Overall, the best performing equity fund of the year according to Morningstar data was ETN MicroSectors US Big Oil 3X Leveraged, which gained 151.1%, followed by a Direxion fund (NAIL .P) who made a leveraged bet three times on home builders. and suppliers and reported 139.4% for the year.

Among fixed income funds, AlphaCentric Income Opportunities led the area with a 14.5% return due to its focus on non-agency residential mortgage-backed securities. This was followed by the 11.5% gain in RiverPark Strategic Income Institutional, which focuses its portfolio on high yield corporate bonds.

Register now for FREE and unlimited access to


Reporting by David Randall; Editing by Cynthia Osterman

Our Standards: Thomson Reuters Trust Principles.

Comments are closed.