Small Cap Value: Weathering Market Downturns
MetLife Investment Management
Small Cap Value Strategy
A focus on risk management has historically yielded attractive downside protection relative to
the Russell 2000® Value Index.
Small Cap Value Strategy: Seeking
Consistent Alpha with Risk Mitigation
Since its inception in 2003, our Small Cap Value
Strategy has delivered annualized excess returns of
over 200 basis points relative to its benchmark, driven by a disciplined, bottom-up investment process and a strong emphasis on risk management. This history of outperformance has been achieved by capturing upside in rising markets with a focus on preserving capital during downturns, a hallmark of our approach.
Investment Philosophy: Valuation +
Catalysts = Alpha
Our strategy targets undervalued small cap companies with clear, actionable catalysts expected to drive earnings and cash flow growth over our investment horizon. This approach has historically resulted in most of our realized excess returns being attributable to stock selection, underscoring the strength of our research and portfolio construction.
Risk Management:
A Core Performance Driver
Risk management is embedded in every step of our
process. Through diversification, valuation discipline,
and strict sell criteria, we’ve maintained a portfolio beta of 0.86 since the inception of the current team (as of 10/1/03), enabling us to outperform during periods of market stress.
Capital Preservation: A Key Differentiator
We’ve analyzed five distinct market drawdowns since 2007. In each case, our strategy has outperformed its benchmark, demonstrating its ability to help protect capital when it matters most. Compared to the eVestment small cap value peer group, our strategy has consistently ranked in the top quartile, reinforcing its value as a core allocation for long-term investors.
For institutional investors seeking consistent alpha,
robust risk mitigation, and a repeatable investment
process, our Small Cap Value Strategy offers a
compelling solution.
Disclaimer
This document has been prepared by MetLife Investment Management, LLC, a U.S. Securities and Exchange Commission (SEC) registered investment adviser. Registration with the SEC does not imply a certain level of skill or that the SEC has endorsed the investment adviser.
The firm is part of MetLife Investment Management (MIM), which is MetLife Inc.’s institutional investment management business. MIM is a group of international companies that provides investment advice and markets asset management products and services to clients around the world. The various global teams referenced in this document, including portfolio managers, research analysts and traders are employed by the various legal entities that comprise MIM.
No money, securities or other consideration is being solicited. This document has been provided to you solely for informational purposes and does not constitute a recommendation regarding any investments or the provision of any investment advice, or constitute or form part of any advertisement of, offer for sale or subscription of, solicitation or invitation of any offer or recommendation to purchase or subscribe for any securities or investment advisory services. Subsequent developments may affect the information contained in this document materially, and MIM shall not have any obligation to update, revise or affirm. It is not MIM’s intention to provide, and you may not rely on this document as providing, a complete or comprehensive analysis of MIM’s investment portfolio, investment strategies or investment recommendations.
Confidentiality. This document and the information contained herein is strictly confidential (and by receiving such information you agree to keep such information confidential) and are being furnished to you solely for your information and may not be used or relied upon by any other party, or for any other purpose, and may not, directly or indirectly, be forwarded, published, reproduced, disseminated or quoted to any other person for any purpose without the prior written consent of MIM. This reminder should not be read to limit, in any way, the terms of any confidentiality agreement you or your organization may have in place with MIM. Any forwarding, publication, distribution or reproduction of this document in whole or in part is unauthorized. Any failure to comply with this restriction may constitute a violation of applicable securities laws.
Risk of loss. An investment in the strategy described herein is speculative and there can be no assurance that the strategy’s investment objectives will be achieved. Investors must be prepared to bear the risk of a total loss of their investment. Your capital is at risk, investing in the strategies discussed herein are subject to various risks which must be considered prior to investing. No tax, legal or accounting advice. This document is not intended to provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations. Any statements of U.S. federal tax consequences contained in this document were not intended to be used and cannot be used to avoid penalties under the U.S. Internal Revenue Code
or to promote, market or recommend to another party any tax-related matters addressed herein.
Forward-Looking Statements. This document may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words and terms such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” and other words and terms of similar meaning, or are tied to future periods in connection with a discussion of future performance. Forward-looking statements are based upon MIM’s assumptions and current
expectations, which may be inaccurate, and on the current economic environment which may change. These statements are not guarantees of future performance. They involve a number of risks and uncertainties that are difficult to predict. Results could differ materially from those expressed or implied in the forward-looking statements. Risks, uncertainties and other factors that might cause such differences include but are not limited to: (1) difficult conditions in the global capital markets; (2) changes in general economic conditions, including changes in interest rates or fiscal policies; (3) changes in the investment environment; (4) changed conditions in the securities or real estate markets; and (5) regulatory, tax and political changes. MIM does not undertake any obligation to publicly correct or update any forward-looking statement if it later becomes aware that such statement is not likely to be achieved.
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