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The Small Cap Core strategy seeks to provide superior long-term investment returns compared to the Russell 2000 Index, while taking a low risk approach to small company investing. We believe that portfolios of neglected small cap companies with low valuations, long-term attractive business fundamentals and near-term profitability improvement potential should produce strong absolute and risk-adjusted returns over time.

Strategy overview

The team operates from a belief that strong absolute risk-adjusted returns can be generated over time by investing in neglected companies with:

  • Sound long-term business fundamentals
  • Near-term profitability improvement
  • Low valuations at the time of purchase


Investment philosophy

  • Begin with universe of approximately 2300 publicly traded companies with market capitalization ranges within that of the Russell 2000 index
  • Emphasize companies in the lower end of the market cap scale, between $200 million and $1 billion, with little analyst coverage and not as efficiently valued
  • In-depth and rigorous long-term fundamental research drives security selection

Portfolio construction

  • Well-diversified portfolios holding 50-80 issues
  • Majority of returns from stock selection
  • Maximum in a single security: 5%
  • Maximum in a single sector: 2x Russell 2000 Index weight
  • Fully invested in equities; no market timing
  • Low portfolio turnover: 30-50%

Additional information

September 1991
Primary benchmark
Russell 2000 Index
Segregated Fund, Separate Account, US Mutual Fund, Canadian Mutual Fund

Related documents

Portfolio managers

Investment team

​RBC U.S. Value and Core Equity team

A focus on best ideas stock selection in U.S. small and mid-cap core and value businesses

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