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Oberweis Micro-Cap Fund
TICKER ASSETS
OMCIX $ 509 million
PERFORMANCE YTD 1 yr . 3 yr . 5 yr . 10 yr . 15 yr . 10.21 % 10.64 % 9.13 % 18.39 % 15.03 % 16.62 %
TOP 5 HOLDINGS ADMA Biologics Inc .; Camtek Ltd .; Ultra Clean Holdings Inc .; ACM Research Inc . Class A ; Applied Optoelectronics Inc .
CONTACT INFO
800-245-7311 • oberweisfunds . com
TOP INDUSTRIES ( As a % of portfolio ) Information Technology 26.3 % Industrials 25.0 % Healthcare 21.0 % Consumer Discretionary 10.8 % Financials 6.1 % Energy 4.6 % Cash 2.8 % Materials & Processing 1.6 % Consumer Staples 0.8 % Telecomm Services 0.8 %
Performance as of 6 / 30 / 24 . Assets and holdings as of 3 / 31 / 24 . Sources : Oberweis Asset Management and Morningstar .
This Micro-Cap Fund Generates Big Returns
The Oberweis Micro-Cap Fund builds its portfolio via behavioral finance . By Jeff Schlegel
U
. S . SMALL-CAPITALIZATION STOCKS ARE UNDERvalued and underperforming vis-à-vis larger-cap stocks , which is why some investment strategists believe they ’ re due to shine . Problem is , small-cap boosters who ’ ve spouted that line in recent years have been let down repeatedly as the sector on the whole has remained a laggard .
The Oberweis Micro-Cap Fund flies in the face of that storyline , however , as it has produced strong annualized returns during the past 15 years that have put it in the tops of its Morningstar category for that period . During that time , it has beat the S & P 500 ’ s average annual return during the five , 10 and 15-year time frames .
It helps to understand that micro caps are considered a subset of the small-cap universe , and sometimes the lines are blurred . As Oberweis portfolio manager Ken Farsalas explains , the borders setting small caps and micro caps have expanded through the years with the overall market .
He notes that when he started as an investment analyst for a small-cap portfolio manager in 1996 , small caps were defined as companies with less than $ 1.25 billion while micro caps were sub- $ 300 million . But the size of companies in the small-cap category have increased over time so that last year the largest company in the Russell 2000 Index — the standard benchmark for many small-cap managers — had a market cap of $ 8 billion .
The Russell Microcap Growth Index , the benchmark for the Oberweis fund , has seen its companies swell in size as well , and as of last year the largest company in the index had a market cap of $ 1.8 billion . As a result , Farsalas says , anything under $ 1.8 billion is considered fair game for his fund ’ s portfolio . ( The index reconstitutes every June , so the fund ’ s ceiling for the next 12 months will change .)
Regardless of size , Farsalas says , he builds his portfolio from the bottom up , stock by stock , without thinking about a benchmark beyond the ceiling on market-cap size . ( Morningstar puts the Oberweis fund in its small-growth category .)
JULY / AUGUST 2024 | FINANCIAL ADVISOR MAGAZINE | 51