The Best of Both Worlds

ICM’s All Cap Value strategy seeks to draw on the advantages of both of the preceding equity strategies (Small Cap Intrinsic Value & Large Cap Globally Dominant), but with an emphasis on the smaller cap and deeper value orientation of the small value strategy (which we believe offers the greatest total return potential) during most periods.

By combining the two disciplines in differing proportions over equity market cycles, the objective of maximizing total return potential in the early part of bull markets with the greater liquidity of larger cap stocks in the later stages of bull markets, ICM seeks to capture superior returns over a full market cycle while improving the ability to preserve those returns through the bear market part of the cycle.

At the end of a bear market, small value stocks tend to be depressed as investors shy away from unproven stories, but they offer exceptional value and, ICM believes, the potential for large returns.  This superior performance can continue through the rest of the bull cycle, but the potential for out-performance is less compelling.  Late in a bull market and during the bear market, however, investors grow more anxious. They tend to want safety and more predictability. Unproven small cap stories suffer during this phase from the lack of interest and poor trading liquidity, making larger stocks a better risk control tool.

As a result the average market capitalization of the All Cap Value portfolios will vary over a stock market cycle—emphasizing smaller cap stocks for capital gain at the perceived beginning of a bull market and larger more liquid stocks for capital preservation in the later stages.  The All Cap Value strategy is best compared to a combination of two indices as a result.  We feel that the S&P 500 Index (for the large cap) and Russell 3000 Index (for the broader and smaller cap orientation) are suitable proxies.

Portfolio Characteristics All Cap Value
Primary Market Capitalization Varies
Number of Companies Held Approximately 30-40 Per Portfolio
Typical Weighting Per Holding 1.5-3.5% of the Portfolio Value at
the Time of Purchase
Expected Holding Period 18-48 Months
Average Portfolio Turnover 35-55% Annually
Recommended Benchmarks S&P 500 Index
Russell 3000® Index
Minimum Account Size $100,000