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Opus News & Insights

U.S. Microcaps Outperform in 2016 Posting a Not-So-Micro Return
Thursday, January 26, 2017

Quick Look
  • U.S. microcaps returned 10.1% for Q4, posting their second straight quarter of double-digit returns. They are up over 20% for the year and up an amazing 46% since market lows in February, with Energy leading the charge, up over 110%!
  • The Russell Microcap Value Index (RMCV) fared best within the space, aided by a significant overweight in Financials and a material underweight in Biotechs; finishing up 16.3% for Q4 and nearly 31%for the year.
  • In contrast to the first three quarters, where low quality outperformed, Q4 was a more market-neutral environment. ETF inflows helped bolster the higher market cap names, while banks,which sport a higher than average ROE, rocketed higher, makingROE a winning trait.
  • Leading sector performers for Q4 included Energy and Financials(banks), while Health Care (Biotechs) significantly lagged.» Opus’ net return of 16.3% was in-line with the Russell Microcap Value Index for Q4. Our return places us in the 12th percentile against U.S. microcap peers.
  • Our 27.7% net return in 2016 trailed the RMCV as underperformance was attributable to not owning highly valued companies and speculative energy stocks. Opus continues to outperform on longer intervals. Over the last two years and since inception, Opus has outperformed the benchmark by 4% annualized, putting us in the 13th and 6th percentile against U.S. microcap peers, respectfully.
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  • Opus Insights
    • 04/19/2017 - Interview with Adam Eagleston
    • 04/12/2017 - MicroCap Value Strategy Using
    • 04/10/2017 - Review of U.S. Small Caps - Ma
    • 04/07/2017 - Dividend Payer vs. Non Payer R
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    • 01/26/2017 - U.S. Microcaps Outperform in 2
    • 01/13/2017 - Small Caps Go Crazy in 2016
    • 01/12/2017 - Small Cap Rally Continues, Boo
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