On The Mutual Fund Show this Saturday, Adam Bold talks with Michael Maloney of Skyline Asset Management, L.P. As co-fund manager of the Skyline Special Equities fund, Michael explains the unique challenges of the small-cap value stock fund category, which tends to be domestically focused, cyclical and fairly volatile. Having been an analyst and co-manager of the fund for more than 17 years, he explains how having an in-depth understanding of valuation and a strong grasp of the fundamentals has helped this fund achieve performance among the top fund managers in this category for over 10 years.
As of July 2013 Skyline Special Equities[SKSEX]
The Skyline Special Equities(Skyline)fund maintains a strict adherence to the small‐cap value style, focusing on stocks with market capitalizations less than $2.5 billion that are trading at below average valuations. A fundamental, bottom‐up approach is used to seek companies with earnings growth potential that are neglected or out‐of‐favor. The fund is run by the managerial team of William Fiedler, Michael Maloney and Mark Odegard, all of whom serve as portfolio managers, analysts and owners of the 100 percent employee‐owned company. The current team has spent more than 17 years together working with a strategy that was originally introduced by senior advisor William Dutton in 1987.
Holdings Analysis2 - Portfolio Holdings Distribution
For more than 25 years, small‐cap stocks have been the focus of Skyline’s investment management and research. The holdings‐based map to the right confirms this focus, as the fund covers the entire small‐cap spectrum with just slight exposure to mid‐cap securities. Currently, the fund falls within the stated range with its 69 equity positions. Of those, roughly 7 percent are international and the rest are domestic U.S. equities. Skyline holds just 19.52 percent of its portfolio weight in its top‐10 securities, and typically maintains a portfolio weighting of 1 to 3 percent on a specific security. The fund currently has a 4.59 percent cash position and states that it will typically seek to remain fully invested with an average cash position of less than 5 percent.