MAB Quarterly Review Q1 2026 - Adventurous - Flipbook - Page 13
Strategy summary:
This strategy invests in smaller US companies that
the managers believe are trading below their true
value. The team focuses on businesses that are
昀椀nancially strong but temporarily overlooked by
the market and looks for situations where a change
in the company or industry could help the share
price move closer to its true worth. The portfolio
typically holds companies with market values
between roughly $200 million and $5 billion.
The strategy is built around three core ideas:
independent thinking, identifying undervalued
companies, and 昀椀nding catalysts that can help the
market recognise that value. Companies are usually
purchased when their share price trades at least
30% below the team’s estimate of what they are
truly worth. The fund typically holds a diversi昀椀ed
portfolio of around 70–100 small-cap companies.
The managers often build meaningful ownership
stakes and actively engage with company
management when they believe changes could
help create shareholder value.
One of the main reasons we allocate to this strategy
is that small-cap value stocks behave differently
from the large companies that dominate the
S&P 500 Index. The S&P 500 is currently heavily
in昀氀uenced by a small number of very large
technology companies. Smaller businesses tend
to be driven by different economic factors,
such as company restructuring, acquisitions,
or improvements in pro昀椀tability. Small-cap value
funds often move differently from large-cap growth
funds. When combined with an S&P 500 allocation,
they can therefore help diversify a portfolio
and reduce reliance on a narrow group of large
technology stocks.
Since we 昀椀rst invested in the strategy in March
2021, the fund has outperformed its benchmark,
the Russell 2000 Value Index. As shown in the
chart, the fund has delivered a return of around
40%, compared with roughly 34% for the index over
the same period. This demonstrates the team’s
ability to add value through careful stock selection
rather than simply tracking the broader small-cap
value market.
Overall, the strategy provides exposure to a different
part of the US equity market and has historically
delivered returns that are less dependent on the
performance of the largest companies in the S&P
500. This makes it a useful diversi昀椀er alongside
traditional US equity allocations.
Neuberger Berman US small cap intrinsic value fund:
Performance since 昀椀rst invesment
Past performance is not a guide to future performance.
Source: Re昀椀nitiv DataStream / YOU Analysis.
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