Mid Cap Advantage

Mid-Caps outperform over the long run.

From April 1999 to December 2016
  • Fairpointe Capital Mid-Cap Composite*
  • S&P 400 MidCap Index
  • Russell MidCap Index
  • S&P 500 Index
  • Russell 2000 Small Cap Index
Annual
Rate
Cumulative
Returns
+ 12.6% + 721.4%
+ 10.4% + 476.4%
+ 9.2% + 373.9%
+ 5.2% + 144.1%
+ 8.6% + 332.5%

 

Source: Advent Axys/IDC

* Net of Fees; Performance represented from April 1, 1999

 

 

Advantages Over Large Cap

  • Higher growth
  • More attractive valuation
  • Greater access to management
  • Less coverage by Wall Street
  • Frequent acquisition targets

Advantages Over Small Cap

  • Less risky and mature capital structure
  • Lower valuation
  • Better liquidity
  • More experienced management

Mid-Cap Core Equity

A pure mid-cap portfolio with approximately 45-50 stocks, drawn from the universe of companies with market capitalizations between $2-$26 billion.

Learn More

 

 

Mid-Cap Composite Returns*
Year End Total Firm
Assets
(USD) (Millions)
Composite
Assets
(USD) (Millions)
Composite
Number of
Accounts
Annual Performance
Results Composite
S&P
MidCap
Russell
Midcap
Composite
Dispersion
Gross Net
2016 5,177 4,843 Eight 25.56% 24.59% 11.96% 13.80% 0.41%
2015 5,607 5,308 Eight -9.74% -10.42% -2.18% -2.44% 0.81%
2014 7,733 7,389 Seven 10.79% 9.97% 9.77% 13.22% 0.38%
2013 6,999 6,692 Seven 45.67% 44.58% 33.50% 34.76% 1.00%
2012 3,853 3,633 Six 17.76% 16.83% 17.88% 17.28% N.A.
2011 3,398 3,210 Five or Fewer -5.36% -6.10% -1.73% -1.55% N.A.
2010* 2,871 Five or Fewer 24.49% 23.50% 26.64% 25.48% N.A.
2009* 1,493 Five or Fewer 66.28% 65.03% 37.38% 40.48% N.A.
2008* 722 Five or Fewer -42.05% -42.53% -36.23% -41.46% N.A.
2007* 1,176 Five or Fewer 13.81% 13.02% 7.98% 5.60% N.A.
2006* 848 Five or Fewer 22.21% 21.27% 10.32% 15.26% N.A.
2005* 695 Five or Fewer 2.67% 1.83% 12.56% 12.65% N.A.
2003* 192 Five or Fewer 43.33% 42.22% 35.62% 40.06% N.A.
2002* 101 Five or Fewer -15.60% -16.29% -14.51% -16.19% N.A.

* Information presented prior to May 1, 2011 pertains to portfolios managed by the Portfolio Managers while affiliated with prior firms.The presentation conforms to GIPS® guidelines regarding the portability of investment results.

N.A. – Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year.Mid-Cap Composite contains fully discretionary equity accounts that follow the mid-cap style. Mid-Cap Composite represents portfolios that seek long-term total return through capital appreciation by investing primarily in mid-cap stocks. For comparison purposes the composite is measured against the S&P MidCap 400 and Russell MidCap indices. The S&P MidCap 400 is a market value weighted total return index that represents the performance of the medium-capitalization sector of the U.S. Securities market. The Russell MidCap is a market value weighted total return index that represents the midcap segment which measures the performance of the 800 smallest companies in the Russell 1000 index. Both indices are representative of the types of equity assets invested by Fairpointe Capital. Market indices are unmanaged and do not reflect the deduction of fees. You cannot invest in an Index and the performance of the Index does not represent the performance of any specific investment. The minimum account size for this composite is $2.5 million. Prior to May 1, 2011 the account minimum was $5 million. Effective March 31, 2013, the account minimum has gone back to $5 million.Fairpointe Capital LLC (Fairpointe) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Fairpointe has been independently verified for the periods May 1, 2011 through September 30, 2016.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Mid-Cap composite has been examined for the periods May 1, 2011 through September 30, 2016. The verification and performance examination reports are available upon request.

Fairpointe Capital is an independent registered investment adviser. The firm maintains a complete list of composite descriptions which are available upon request. Please send inquiries to mkatauskas@fairpointecapital.com or call 312-477-3300.

Results are based on fully discretionary accounts under management, including those accounts no longer with the firm. Past performance is not indicative of future results. Market, economic, company, and industry specific conditions are considered during the investment selection process. This was a period of generally rising security prices.

The U.S. Dollar is the currency used to express performance. Returns are presented gross and net of management fees and include the reinvestment of all dividends, capital gains, and other earnings. Gross returns will be reduced by investment advisory fees and other expenses that may be incurred in the management of the account. Net of fee performance is calculated using actual fees. The annual composite dispersion is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.
The investment management fee schedule for the composite was 1.0% on the first $10 million and 0.65% on the remainder. Effective March 31, 2013, the fee schedule is 0.85% on the first $10 million and 0.65% on the remainder. Actual investment advisory fees incurred by clients may vary.

At December 31, 2016, the three-year annualized ex-post standard deviation of the composite is 15.87% and the benchmarks are 12.23% S&P MidCap and 11.55% Russell MidCap, respectively. At December 31, 2015, the three-year annualized ex-post standard deviation of the composite is 14.30% and the benchmarks are 11.70% S&P MidCap and 10.85% Russell MidCap, respectively. At December 31, 2014, the three-year annualized ex-post standard deviation of the composite is 13.4% and the benchmarks are 11.1% S&P MidCap and 10.1% Russell MidCap, respectively. At December 31, 2013, the three-year annualized ex-post standard deviation of the composite is 18.4% and the benchmarks are 15.0% S&P MidCap and 14.0% Russell MidCap, respectively. At December 31, 2012, the three-year annualized ex-post standard deviation of the composite is 20.6% and the benchmarks are 17.9% S&P MidCap and 17.2% Russell MidCap, respectively. At December 31, 2011, the three-year annualized ex-post standard deviation of the composite is 25.0% and the benchmarks are 21.9% S&P MidCap and 21.6% Russell MidCap, respectively.
The Mid-Cap Composite was created May 1, 2011. Performance presented prior to May 1, 2011 occurred while the Portfolio Managers were affiliated with prior firms and the Portfolio Managers were the only individuals responsible for selecting the securities to buy and sell.