Isis holds IWN 90.82: The performance of the fund will largely mirror that of its comparable index, the Russell 2000 Value index.

Clearly, the value nature of the fund has some merits during recessionary, bear market periods. Not only did it outperform, but the fund kept cruising along in a bullish trend despite the collapsing of the technology bubble. The fund's investment objective also caused it to avoid many of the high flying, and wildly overvalued, small cap technology stocks on the NASDAQ. The value nature of PCVAX and its higher dividend yield (2.6% vs 1.7% for the Russell 2000) means it tends to outperform during periods of weaker overall stock market performance. However, before you click over to your 401(k) to make an exchange.


Alysha:
The stocks are just too small to make a major difference to the fund's overall performance.

Sebrina:
Third, again because of the first implication, it is very difficult for the overall fund to generate enhanced returns from investing in smaller, more unknown small caps that generate exceptional returns.

Theresia:
It is hard for a large, small cap fund to not be an index hugger.

Jenae:
The more stocks the fund owns, the closer it gets to mirroring the index.

Paris:
Second, because of this first implication, the fund has to hold a lot more stocks.

Felicitas:
The industry's entrepreneurial investment ambition died off a long time ago and it has been replaced with herd-like complacency.

Celinda:
Sadly, most of the funds in the mutual fund industry have devolved into quasi-index funds with higher expense ratios.

Thu:
Indeed, I prefer it, because it would show me they know the companies so well that they are willing to make serious commitments.

Wilda:
My view is that there is nothing wrong with a concentrated portfolio.

My:
This would give the investment company a lot more control-and responsibility-as it relates to those companies.

Russell 2000 Value Index Ishares (AMEX:IWN)
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