Capstone Global Investments

High Quality Small Cap



  • Additional attributes Small cap
  • Strategy Stocks
The High-Quality Small Cap strategy is a fundamental core approach that invests in small cap companies in strong financial condition and whose equities are priced below our view of fair value.Our research process integrates fundamental research with quantitative screening to exploit market anomalies, providing us a competitive advantage in identifying investment opportunities. Our bottom-up proprietary research work focuses on identifying high-potential investment candidates experiencing positive fundamental change.
We believe that markets are not completely efficient and recognize that market participants are averse to risk and change. Through a stock selection process that is focused on the early identification of changes in fundamentals, and active portfolio management that embraces intentional risk taking while minimizing unnecessary systematic biases, we seek to consistently benefit from persistent market anomalies and inefficiencies.
Our investment philosophy is founded on the principle that first-hand fundamental research is essential to make sound, long-term investment decisions. We place great emphasis on the research component of our investment process. The research process begins with an analysis of the company's financial statements. In terms of the balance sheet, we prefer low debt and high Return On Equity. In terms of the income statement, Capstone looks for earnings that are high and stable. We also consistently review regulatory filings, press releases, and industry data. We review the portfolio holdings, new ideas screens, and industry and sector trends on a weekly basis.
First and foremost, our portfolio construction discipline is grounded in bottom-up stock selection as the key driver of results and avoiding unintended systematic biases. We believe stock selection is a competitive advantage and where we add value. We review various sources of risks in the portfolio on an ongoing basis. Our risk management approach includes understanding:

o Stock-specific risks – industry environment, management quality
o Systematic risks – economic cycle, interest rate cycle
o Concentration risks – such as sector weights, industry concentration, and position sizing

Portfolio positioning primarily reflects our views on individual companies, rather than reflecting a defined top-down macroeconomic forecast. Sector overweights and underweights are driven primarily by bottom-up stock selection decisions rather than broader top-down or thematic drivers. The portfolio is relatively focused with approximately 35 to 45 companies. The individual holdings are diversified across economic sectors; however, the portfolio sector weights may vary widely from that of the benchmark.
A portfolio holding will be sold or trimmed for one of four reasons:1. Relative valuation – for example, a stock becomes significantly overvalued relative to its peers.2. Deteriorating business fundamentals – for example, negative sales or earnings growth, margin contraction, loss of market share, etc. 3. A superior investment idea relative to a current holding is found. 4. Portfolio construction/risk control– for example, a stock becomes too large a position in the portfolio.

Portfolio Manager performance

-4.4%

Last 30 days

30D

0.9%

Last 90 days

90D

24.5%

Last 365 days

365D

Quarterly vs S&P500

Quarterly vs S&P500

Risk score

  • 18.0%

    Best quarter

  • -0.7%

    Worst quarter

    • 1% fee
    • $30,000 min

Portfolio Manager performance graph

Performance history disclosure

All performance information on this page is based on the performance of the Portfolio Manager’s account. Client performance may differ. Client account performance is displayed on the client dashboard.

Performance Portfolio inception December 01, 2015

as of August 16, 2017 Manager (net of fees ) Russell 2000 S&P 500
Last 30 days -4.4% -3.4% 0.4%
Last 90 days 0.9% 1.7% 4.3%
Last 365 Days 24.5% 12.4% 13.3%
Since inception (Annualized) 15.2% 8.8% 10.5%
2017 (YTD) 2.2% 2.0% 10.2%
2016 31.1% 19.5% 9.5%

Risk metrics Last 365 days

as of August 16, 2017 Manager (net of fees ) Russell 2000 S&P 500
Volatility 13.3% 14.0% 8.1%
Sharpe Ratio 1.76 0.81 1.51
Sortino Ratio 2.69 1.26 2.04
Maximum Drawdown -6.3% -8.4% -4.7%
Value-at-risk (95%, 1 week) -3.1% -3.2% -1.9%
Russell 2000 vs. S&P 500
Information Ratio 2.29 1.26
Alpha 11.7% 6.9%
Beta 0.88 1.24
R-Squared 0.86 0.58

Exposure

35.1%
23.4%
15.7%
12.2%
6.3%
  • Financial
  • Industrial
  • Consumer, Cyclical
  • Technology
  • Communications

Holdings are only visible to invested clients.

If you'd like to discuss this portfolio, contact client relations at 1.866.825.3005.

Transactions are only visible to invested clients.

If you'd like to discuss this portfolio,
contact client relations at 1.866.825.3005.

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Important Information

  1. Past performance is no guarantee of future results, and all investments, including those in this portfolio, involve the risk of loss, including loss of principal and a reduction in earnings.  
  2. All performance information on this page is based on the performance of the Portfolio Manager’s account, using the manager’s own funds. Portfolio Manager’s pre-IB Asset Management performance information may include performance of non-IB Asset Management client accounts. Performance of the Portfolio Manager's account is calculated by IB Asset Management on a daily time-weighted basis, including cash, dividends and earnings distributions and reflects the deduction of broker commissions. Manager returns include trades and positions that fail IB Asset Management's trading rules, as a result, actual client returns will differ. IB Asset Management advisory fees are simulated and applied retroactively to present the portfolio return "net-of-fees".
  3. None of the performance information displayed on this page is based on the actual performance of any IB Asset Management client account investing in this portfolio. The performance in an IB Asset Management client account invested in this portfolio may differ (i.e., be lower or higher) from the Portfolio Manager’s account performance based on any trading restrictions imposed by the client (resulting in different account holdings), time of initial investment, amount of investment, frequency and size of cash flows in and out of the client account, applicable brokerage commissions, and different corporate actions. Clients investing in this portfolio may view the actual performance of their investment in this portfolio by logging into their IB Asset Management account and reviewing their customized dashboard.
  4. All graph data is as of the end of day for the referenced period, unless otherwise specified. The investment minimum is the minimum investment required to follow a particular portfolio. The minimum amount is determined by IB Asset Management, based on the characteristics of the underlying portfolio. It should not be considered as specific investment advice for your investment situation.
  5. The performance charts are provided for informational purposes only, and should not be used as the basis for making an investment decision. We rely on mathematical formulas, computer programs, and pricing information from third-party vendors to provide these returns. Neither IB Asset Management nor any of its data or content providers shall be liable for any errors in this information or any actions taken by you in reliance upon this information.
  6. Benchmark returns displayed have been calculated by IB Asset Management using daily benchmark prices and do not include dividend income. More information here. For certain portfolios IB Asset Management uses an index as a benchmark, while for others it uses an investable exchange traded fund (ETF) as a benchmark. Index returns do not reflect the deduction of any management fees, transaction costs or expenses. Individuals cannot invest directly in an index. Investable ETF returns reflect the deduction of (i.e., are net of) management fees, transaction costs and expenses.
  7. All Portfolio Manager information including personal data, profiles, strategies, monthly investment reports, and historical results outside of IB Asset Management has been provided by the Portfolio Manager. IB Asset Management makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of IB Asset Management. Transaction history of Portfolio Managers is available upon request. Portfolio classifications are provided by IB Asset Management, and are intended to serve as a general guide.
  8. Not all transactions listed will appear in accounts due to IB Asset Management's trading rules and individual client constraints. Eligibility of these securities is monitored periodically, and may change over time. Actual client investment holdings may vary.
  9. This portfolio was launched on IB Asset Management on May 11, 2017. Returns history prior to launch is derived from account position valuation and cash flow data at Interactive Brokers. IB Asset Management has not reviewed this performance data but has received manager certification that it adheres to the current strategy.