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| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The Ceredex Small Cap Value Equity Strategy Composite seeks long-term capital appreciation and income by identifying undervalued small-cap companies with solid fundamentals. During the first quarter of 2026, the fund achieved a net return of 5.19% (5.45% gross), outperforming the Russell 2000 Value Index's return of 4.96%. Performance was driven by exceptional stock selection in information technology and industrials, particularly through holdings leveraged to the artificial intelligence value chain and cyclical recoveries. However, headwinds emerged in financials due to yield curve flattening, and in energy selection, leading to the exit of Solaris Energy Infrastructure. Geopolitical conflicts in March sparked volatility and energy price spikes, tempering late-quarter momentum. The fund trimmed high-performing holdings like Advanced Energy Industries and Matador Resources to secure gains. Meanwhile, the manager initiated positions in Jack Henry and Cactus while completely exiting Macy's and VF Corporation due to a more cautious consumer discretionary outlook. Looking ahead, the manager maintains a modestly constructive economic outlook, focusing on identifying underappreciated tech bottlenecks and adding selective defensive positions like repriced consumer staples.
The fund seeks long-term capital appreciation and income by investing in undervalued small-cap companies where fundamental research can identify mispriced opportunities before the broader market.
The manager maintains a modestly positive outlook, expecting persistent elevated energy prices to pressure consumers but remaining constructive on industrials and technology. They seek to exploit underappreciated AI value chain bottlenecks and build up selective defensive exposures like repriced consumer staples while actively managing cyclical positions.
As of Mar 31, 2026
Ceredex Value Advisors LLC is an investment management firm with a distinguished history of managing value equity portfolios since 1995, operating as a wholly-owned subsidiary of Virtus Investment Partners. The firm employs approximately 13 staff members with 11 performing investment advisory functions, managing assets across 28 discretionary accounts for sophisticated institutional clients including registered investment companies, state and municipal government entities, pension plans, insurance companies, and charitable organizations. Don Wordell, CFA serves as portfolio manager for the Small Cap Value Equity Strategy, bringing institutional expertise to the management of this $1.0 billion strategy.
The Ceredex Small Cap Value Equity Strategy focuses on dividend-paying companies exhibiting lower expectations and attractive valuations accompanied by solid and improving fundamentals. The strategy seeks long-term capital appreciation and income by investing primarily in U.S. companies with market capitalizations similar to the Russell 2000® Index that are believed to be undervalued at the time of purchase. The approach combines rigorous bottom-up, company-specific research with emphasis on consistent performance across market conditions, employing a four-step investment process of screening for quality dividend payers, fundamental analysis, disciplined portfolio construction, and comprehensive risk management.
Lead Portfolio Manager
Neutral / Balanced
Market Conviction
Conviction is scored at 0.45 due to the highly diversified structure of the strategy. The largest positions represent less than 2% of the overall portfolio, and the fund holds a broad array of stocks, relying on a diversified value approach rather than high-conviction concentrated bets.
Growth Outlook
The manager maintains a modestly positive outlook of 0.65. While acknowledging risks like persistent elevated energy prices and consumer pressure, they explicitly state they are not overly concerned about a broad recession and still see strong opportunities in industrials and technology.
Risk Appetite
The manager exhibits a balanced but constructive risk appetite of 0.60. They have trimmed some high-performing cyclical assets to lock in gains and added defensive/insulated software names, yet remain constructive on small-cap value opportunities overall.
Capital Deployment
The manager has actively balanced the portfolio by trimming gainers like Matador and Advanced Energy and exiting consumer names to fund new positions in Jack Henry and Cactus, keeping overall cash levels stable.
Forward Guidance
Forward guidance is scored at 0.55, reflecting a selective and measured approach to near-term actions. The manager is focused on identifying underappreciated bottlenecks in the AI value chain and picking up repriced defensive stocks rather than launching aggressive capital deployment.
Language Signal
The language signal is scored at 0.58, representing a slightly positive tilt. Although there is substantial discussion of market headwinds, interest rate pressures, and geopolitical volatility, this is balanced by strong positive descriptors for technology bottlenecks and structural AI infrastructure demand.
Perceived Risk
Perceived risk is scored at 0.65, as the manager highlights several clear and named headwinds. These include geopolitical escalations, higher interest rates pressuring construction, and inflationary pressure from elevated oil prices impacting discretionary consumer spend.
Opportunity Density
Opportunity density is scored at 0.60, as the manager sees clear but selective opportunities in specific pockets. They point specifically to underappreciated bottlenecks in the AI value chain, industrial equipment, and repriced consumer staples rather than a broad, wide-open market.
Time Horizon
Time horizon is scored at 0.60, reflecting a standard medium-term investment perspective of 1 to 3 years. The thesis relies on cyclical normalization and structural AI infrastructure rollouts that are expected to play out over several quarters.
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