Theory Versus Reality
By Paul Price
The June 27 issue of Barron’s has done it again. With thousands of fund managers to pick from, columnist Leslie Norton chose to spotlight Bruce Geller, CEO of Dalton Greiner Hartman Maher and the firm's GDKM All-Cap Value (DGHMX) mutual fund.
Norton noted that the highlighted fund has trailed its peers in recent years, but it had outperformed its selected benchmark, the Russell 3000, in this year’s first quarter. Yippee!
How many of us really care how our portfolios measure up to that less-than-major index? Do three months of okay results outweigh years of less-than-average total return?
In his interview, Geller touted specific micro-caps, which he then picked or panned. His general love of micro-caps was tied to research data which state that the smallest-cap stocks returned 11.6% since 1926 versus large-caps, which brought in 9.4% annualized.
Did the fund's All-Cap approach manage to harness excess alpha on "under-researched and inefficiently priced" micro-cap shares?
