Small Cap Value: Leveraging Market Inefficiencies

By Jeff John, CFA - April 20, 2018

The topics du jour are a potential trade war and tariffs. While both issues are keeping pundits talking, they don’t have a lot of effect on our day-to-day operations. That being said, they’re creating volatility in the market and we use that to our advantage. We look at these sorts of events as opportunities to add to our portfolio—either by building new positions and new names, or adding incremental weight to existing holdings.

When we look at the market through a small cap value lens, transitory events are just one consideration. We also use our almost 20 years of experience running this strategy and our proprietary screening tool that uses 23 metrics to create a manageable opportunity set.

In this quarter’s outlook, I share details on our approach and talk about which industry has us concerned about high valuations.

Jeff John, CFA
Jeff John, CFA
  • Related Articles
  • More From Author

Opportunities in China Amid the Trade War

Trade war aside, Sr. Portfolio Manager Patricia Ribeiro is still finding opportunities to invest in China. Find out how in her latest quarterly update.

Slower Growth and Market Returns in 2019

Market expectations are low coming out of 2018. Sr. Portfolio Manager Brent Puff explains the potential implications for global growth markets in 2019.

Sustainable Investing in Emerging Markets

There’s a lot of talk about ESG investing. However, few managers have focused on emerging markets—and that’s where we see a lot of potential.

    Small Cap Value: Leveraging Market Inefficiencies

    Trade war and tariffs are creating volatility—and creating opportunity for Sr. Small Cap Portfolio Manager Jeff John’s investment team.

      Historically, small- and/or mid-cap stocks have been more volatile than the stock of larger, more-established companies. Smaller companies may have limited resources, product lines and markets, and their securities may trade less frequently and in more limited volumes than the securities of larger companies.

      Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

      The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

      Portfolio managers are not licensed by the Hong Kong Securities and Futures Commission to perform any regulated function in or from Hong Kong. Furthermore, none of the portfolio managers are located in or operate in or from Hong Kong.