RS Small Cap Equity Fund

Scorecard
4 / 5 Stars
Lipper
4 5 2 1 1
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
4 / 5 Stars
TheStreet.com
B- (Buy)

U.S. News evaluated 215 Small Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Note: Profile written for different share class.

Performance

The fund has returned 44.07 percent over the past year, 17.68 percent over the past three years, 28.23 percent over the past five years, and 9.81 percent over the past decade.

Trailing Returns Updated 02.28.2014
Year to date 3.3%
1 Year 44.1%
3 Years (Annualized) 17.7%
5 Years (Annualized) 28.2%
10 Years (Annualized) 9.8%

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Summary

RS Small Cap Equity has produced enviable long-term results.

As of March 05, 2014, the fund has assets totaling almost $132.54 million invested in 90 different holdings. Its portfolio consists primarily of shares of small and mid-sized companies.

Lately, the fund has been heavily invested in tech and industrials companies. Together, the two sectors represented, as of the end of the first quarter, more than half of the fund's portfolio. One of the fund's most impressive performers this year, however, is from the healthcare sector. Pharmasset, Inc.'s blockbuster year has been a major contributor to the fund's performance in 2011. Meanwhile, management has been doing a fair amount of trading as of late, as exemplified by the fund's 121 percent turnover ratio. By comparison, a fund that replenished its entire portfolio once a year would have a ratio of 100 percent. While that level of trading, if done wisely, can help returns, it inevitably reduces the fund's tax efficiency. The fund has returned 44.07 percent over the past year and 17.68 percent over the past three years.

Although the fund is concentrated by sector, management spreads the fund's assets out across a large number of holdings. As of the end of the first quarter, no single company accounted for more than two percent of the fund's assets. The fund has rarely stood out in any individual year, but its long-term numbers are nonetheless impressive. As of the end of July, its trailing 10-year returns landed it in the top 16 percent of its Morningstar category. The fund has returned 28.23 percent over the past five years and 9.81 percent over the past decade.

Investment Strategy

According to the fund's prospectus: "The Fund's investment team employs both rigorous fundamental analysis and quantitative screening to identify potential investment candidates that the investment team believes have greater earnings potential than expected by the market. Investment candidates typically exhibit some or all of the following key criteria: strong organic revenue growth, expanding margins and profitability, defensible competitive advantages, growing market share and experienced management teams. Valuation is an integral part of the investment process and purchase decisions are based on the investment team's expectation of the potential reward relative to risk of each security based on the investment team's proprietary earnings calculations."

Role in Portfolio

Morningstar calls the fund a "supporting player."

Management

A team of four managers runs the fund. 

Fees

RS Small Cap Equity Fund has an expense ratio of 1.60 percent. 

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Risk

Like all stock funds, this one comes with some risks.

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See Also:

Top RS Funds Funds