Small Cap Growth

A long-only, capital appreciation focused, small cap growth equity strategy invested exclusively in companies displaying profitability to build a diversified, high-conviction portfolio of 40-55 stocks with market capitalizations generally between $200 million and $7 billion.

The investment objective of the Small Cap Growth strategy is to outperform its Russell 2000 Growth Index over a full market cycle and at lower levels of risk, as defined by the standard deviation of returns.


Campbell Newman’s core investment philosophy is that earnings growth drives stock prices.

The Small Cap Growth strategy uses a company’s profitability as tangible evidence of the viability of a company’s business model, increasing the probability of sustainable earnings growth and price appreciation. The use of traditional research and valuation metrics is more insightful and reliable when applied to profitable companies, compared to the speculation necessary when analyzing unprofitable enterprises.


Coverage responsibilities are divided among the investment team by economic sector, as follows:

  • Mary C. Brown, CFA: Consumer Discretionary, Consumer Staples
  • Rimas M. Milaitis: Information Technology, Communication Services, Utilities
  • Thomas H. Bolgert, CFA: Health Care, Financials, Real Estate, Energy
  • Jeremy A. Ellis, CFA: Industrials, Materials

The active research universe is then established by screening the Russell 2000 Growth Index’s constituents by the following minimum standards:

Criteria / Approximate Number of Companies

  • Profitable on trailing 4-quarter basis / Approx. 650
  • Companies with consensus estimates / Approx. 630
  • Stable to positive earnings revisions / Approx. 150

Once the active research universe has been established, the team focuses resources and research efforts on those companies that exhibit price momentum and positive quarterly earnings surprises. Team members review the screening output in their areas of responsibility to create a list of prospects for in-depth analysis.

The team gathers information on the company from primary sources first, by listening to conference calls and reviewing transcripts, as well as other financial disclosures. For each company, the team will assess fundamentals, including operating ability, competitive position and the quality of earnings and determine the prospects for positive earnings revisions.

The decisions regarding the selection of specific issues are determined on a team basis with all changes to the portfolio requiring a unanimous vote.


A high conviction portfolio of 40 to 55 holdings. Positions are generally initiated at 2%. The maximum individual holding weighting is 5%. Sector weightings are limited to 2x the benchmark for sectors that have a 10% or greater weight in the benchmark. There is no minimum threshold for sector weightings and cash is a residual of bottom-up research process.