Diversified Small Cap Value Equity

Boat and Shoes
Billy Hassell
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About Diversified Small Cap Value Equity

The strategy uses original research to identify and exploit small-cap stocks which are out of favor during periods of temporary fundamental difficulty or are otherwise impaired. Candidates typically have earning power and cash generation capabilities significantly higher than is generally understood and may be the objects of significant restructuring. Our process has been consistently and successfully applied to the same target universe for more than four decades.

Investment Process

Investment Objective:

Seeks to outperform the Russell 2000® Value Index over a full market cycle.

Investment Overview:

Our Diversified Small Cap Value strategy is designed to exploit inefficiencies in the small cap sector of the market utilizing a quantitative methodology. We screen for more than 70 fundamental, valuation, and price-based factors that are utilized to identify companies for which the intrinsic value of the underlying business is significantly greater than the market price of the stock. The quantitative model is based on our 25-year fundamental Small Cap Value strategy, covers a broader universe, and has a more diversified portfolio consisting of approximately 160 stocks.

Strategy Summary

as of 3/31/2021
Asset Class
US Equity
Investment Style
Value
Portfolio Benchmark
Russell 2000® Value Index
Separate Account
Open

Additional Information

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Portfolio Characteristics

as of 3/31/2021
Portfolio
Russell 2000® Value Index
Russell 2000® Index
P/E Ratio (Forecasted 12 Months)1
12.2
15.3
18.6
P/B Ratio
1.3
1.7
2.5
Weighted Average Market Cap ($M)
2,224
3,082
3,607
Median Market Cap ($M)
1,981
908
1,044
Dividend Yield
1.7
1.6
1.0
1 P/E is normalized and is calculated internally

Sector Weightings

as of 3/31/2021
Industrials
26.9%
Financials
17.9%
Information Technology
12.7%
Consumer Discretionary
10.7%
Materials
10.7%
Energy
8.5%
Consumer Staples
4.4%
Communication Services
4.0%
Health Care
2.4%
Real Estate
0.9%
Cash
0.8%
Utilities
0.2%

Performance

Annualized Portfolio Returns as of 3/31/2021
Qtr*
1 Year
3 Year
5 Year
10 Year
Diversified Small Cap Value Equity - Gross Returns
29.67%
123.52%
12.00%
13.13%
12.11%
Diversified Small Cap Value Equity - Net Returns
29.48%
122.75%
11.23%
12.36%
11.34%
Russell 2000® Value Index
21.17%
97.05%
11.57%
13.56%
10.06%
Russell 2000®  Index
31.37%
19.96%
10.25%
13.26%
11.20%

* Most recent quarter returns are not annualized. Past performance does not guarantee future results and there is no assurance that the Strategy will achieve its investment objective.

Disclosure

Sources for data noted above are from APX and FactSet as of the date specified.

Barrow Hanley gross returns are shown before investment management fees and custody expenses. Index returns do not reflect transaction costs, management fees, and other expenses. Performance is expressed in U.S. currency. Net returns are calculated using a model fee. The model fee is based on a $100 million portfolio using our standard fee schedule. Barrow, Hanley, Mewhinney & Strauss, LLC claims compliance with the Global Investment Performance Standards (GIPS®). GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Frank Russell Company. The data presented may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is prepared by Barrow Hanley. Russell Investment Group is not responsible for the formatting or configuration of this material or for any inaccuracy in Barrow Hanley's presentation thereof.

The Global Industry Classification Standard (“GICS”) was developed by and is the exclusive property and a service mark of MSCI Inc. (“MSCI”) and Standard & Poor’s, a division of The McGraw Hill Companies, Inc. (“S&P”) and is licensed for use by Barrow, Hanley, Mewhinney & Strauss, LLC. Neither MSCI, S&P, nor any third party involved in making or compiling the GICS or any GICS classifications makes any express or implied warranties or representations with respect to such standard or classification (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability and fitness for a particular purpose with respect to any of such standard or classification.  Without limiting any of the foregoing, in no event shall MSCI, S&P, any of their affiliates or any third party involved in making or compiling the GICS or any GICS classifications have any liability for any direct, indirect, special, punitive, consequential or any other damages (including lost profits) even if notified of the possibility of such damages.

All institutional product information has been provided by Barrow, Hanley, Mewhinney & Strauss, LLC. Any questions about this material or requests for additional information may be made directly to the firm by contacting us here.

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