Hotchkis & Wiley Small Cap Value Fund Class I (HWSIX) focuses on investing in undervalued small-cap companies across various sectors, primarily in the U.S. market. The fund's competitive position is bolstered by its value-oriented investment philosophy and a disciplined approach to stock selection, aiming to capitalize on market inefficiencies.
The fund generates revenue primarily through management fees based on the total assets under management, which are calculated as a percentage of AUM. This model benefits from economies of scale, allowing for lower costs per dollar managed as AUM increases, enhancing profitability.
Changes in AUM driven by investor inflows or outflows
Performance relative to benchmark indices (e.g., Russell 2000)
Market sentiment towards small-cap stocks
Interest rate movements affecting investor appetite for equities
Regulatory changes affecting asset management fees and practices
Market volatility impacting small-cap stock performance
Increased competition from low-cost index funds and ETFs
Pressure from larger asset managers with more resources
Limited financial leverage, but potential liquidity risks during market downturns
high - The fund's performance is closely tied to the economic cycle, as small-cap stocks tend to outperform during economic expansions and underperform during recessions.
Rising interest rates can negatively impact small-cap stock valuations as borrowing costs increase and investor sentiment may shift towards safer assets, affecting demand for equities.
minimal - The fund does not have significant exposure to credit markets as it primarily invests in equities.
value - The fund appeals to value-oriented investors seeking exposure to undervalued small-cap stocks.
moderate - Historical volatility is moderate, reflective of the small-cap equity market.