Is It Too Safe? - Maybe Small-Caps - ????

What do I want to be when I grow up?

The portfolio I have been building has strayed into what I would call Big-Cap territory, even though many these days most would call it Mid-Cap. The median market cap is going to be over $20 billion . Maybe that is just too big?

From a straight “bottom-up” process the portfolio I leaned toward has bigger companies like AJ Gallagher, Nutrien, Devon, Tyson, Roper, ONEOK, Medtronic, and Sysco, and Tractor Supply. These bigger cap names just came out on top as I compared them to smaller ideas. Maybe I am just becoming a grumpy old man? Maybe with the market near an all-time high I leaned toward safer companies? Maybe as Big-Cap money chases technology stocks, some of the Big-Caps in other sectors just get cheaper?

Here is an idea I had many years ago. I should take 10 Small-Cap mutual funds that I respect, and choose the best ideas from each. A quick search found a Morningstar article “The Best Small-Value Funds and ETF’s”, written January 20, 2026. The list had most of my favorites, and a few more.

First Eagle, Diamond Hill, Victory Sycamore, AMB River Road, Franklin, Invesco, FPA Four Queens, Boston Partners, WisdomTree, and LSV.

ARZMX, BPSIX, DHSYX, DHMYX, QRSIX, FESRX, FRCSX, SMVSX, LSVQX, VSORX, DES

That is a good list that seems to ignore Morningstar’s current rating and focus on process and the longer-term story.

The portfolio below is built from only those funds. It has a median market cap of $6 billion, and nothing larger than $15 billion.

Maybe this portfolio would be more educational, and more in the spirit of what I started out trying to write.

These are all companies I know very well. A few have run a little more than I would like, but that is true of most portfolios.

Let’s finish the “All-Cap” portfolio first, and then decide how to proceed.

Below is a portfolio with ideas only from those 10 managers Small-Cap funds:

1. Louisiana Pacific - $75 - LPX - $6 Billion Mkt. Cap. - First Eagle, Franklin, Victory Sycamore

2. Hudbay Minerals - $22 - HBM - $9B - Invesco

3. Brunswick - $77 - BC - $5B - Franklin, WisdomTree

4. PVH Corp. - $77 - PVH - $4B - FPA Four Queens

5. The Gap - $19 - GAP - $7B - Franklin, Victory Sycamore

6. Red Rock Resorts - $64 - RRR - $7B - Diamond Hill

7. Simpson Manufacturing - $192 - SSD - $8B - Victory Sycamore

8. Old National Bancorp - $26 - ONB - $10B - First Eagle

9. Matador Resources - $52 - MTDR - $8B - LSV, Invesco, Victory Sycamore

10. Helmerich & Payne - $32 - HP - $3B - Victory Sycamore

11. Rayonier - $21 - RYN -$7B - Franklin

12. Alexandria Real Estate - $49 - ARE - $9B - Diamond Hill

13. Magnite - $21 - MGNI - $3B - Boston Partners

14. Nexstar Media - $179 - NXST - $5B - LSV

15. WillScot - $26 - WSC- $5B - AMB River Road, Franklin

16. AGCO Corp. - $114 - AGCO - $8B - FPA Four Queens, Invesco

17. Vontier - $28 - VNT - $4B - AMB River Road, Franklin, Victory Sycamore

18. Avantor - $10 - AVTR - $7B - Diamond Hill

19. Ingredion - $99 - INGR - $6B - LSV

20. Scott’s Miracle-Gro - $57 - SMG - $4B - WisdomTree

The portfolio has a balance of sectors similar to my All-Cap portfolio. The portfolio above has no utilities and just one technology company.