3 / 5 Stars
3 3 3 4 3
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
3 / 5 Stars
#41 in Small Blend
U.S. News evaluated 229 Small Blend Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 24.14 percent over the past year, 13.24 percent over the past three years, 20.32 percent over the past five years, and 9.42 percent over the past decade.
|Trailing Returns||Updated 06.30.2014|
|Year to date||5.0%|
|3 Years (Annualized)||13.2%|
|5 Years (Annualized)||20.3%|
|10 Years (Annualized)||9.4%|
Some investors might ask, “Why invest in small caps?” It’s a valid question, says Mark Wynegar, manager of the Tributary Small Company Fund, with an answer that goes back to one of the fundamentals of investing: diversification. Not only is it important to invest in a variety of stocks and bonds, he says, it’s important to diversify within asset classes as well.
As of July 03, 2014, the fund has assets totaling almost $204.97 million invested in 64 different holdings. Its portfolio primarily consists of stocks of companies with market capitalizations of less than $4 billion.
This fund managed to escape the heavy losses sustained by similar funds in 2008, outperforming both its Morningstar category and its benchmark by double digits. As the markets recovered in 2009, the fund posted fairly strong gains, although it lagged its benchmark slightly. As 2010 came to a close, the fund again posted double-digit returns, which landed it in the top quarter of Morningstar small-blend funds.
Management recently sold the fund’s position in convenience-store chain Casey’s General Stores after holding the stock for almost a decade. A takeover bid in summer 2010 caused the firm’s stock to spike and management sold the shares for a good return, Wynegar says. Another fund holding, Tractor Supply Company, has also performed well since management bought the stock in 2006. According to comanager Mike Johnson, the firm has a very attractive business model with big plans for store growth over the next few years. The fund has returned 24.14 percent over the past year and 13.24 percent over the past three years.
Previously known as First Focus Small Company, the fund was renamed Tributary Small Company in August 2010 following the consolidation of the fund’s two advisers, Tributary Capital Management and FNB Fund Advisers. Historically, the fund has performed well, with five-year trailing returns ranking in the top 8 percent of Morningstar’s small-blend category. The fund has returned 20.32 percent over the past five years and 9.42 percent over the past decade.
Lead manager Mark Wynegar says he takes a “very ownership-oriented view” toward the fund’s holdings and tends to hold onto picks for about three to five years. “I think what we do is different because of that longer-term approach to investing,” Wynegar says. “Our belief is that if you buy good companies and you pay a good price for them and you have good management of those companies, if you hold onto those for the long haul it really helps you put good performance up over the long term.”
Wynegar, co-manager Mike Johnson, and a team of five analysts pick stocks for the fund on a company-by-company basis. “Sector-wise, we usually keep the portfolio fairly neutral versus the Russell 2000 (the fund’s benchmark). We’re not trying to make sector calls or guesses on what part of the market is going to perform next,” Wynegar says. “What we really want is that individual company selection process to drive our performance over time.”
Wynegar likes to keep the portfolio fairly compact at about 60 to 70 stocks, which he says provides enough diversification without diluting the value of individual stock picks.
The fund is run by a team of three managers.
Tributary Small Company Fund has an expense ratio of 1.19 percent.
Stocks of small companies tend to be more volatile than those of large companies.