AIM Small Cap Growth AGTSAX

Morningstar Rating

Fund Research and Analysis

by Ryan Leggio

AIM Small Cap Growth's investment process is working.

Comanagers Juliet Ellis and Juan Hartsfield will hit their five-year anniversary in September since taking over this closed fund. Their tenure thus far has been a welcome improvement over the past management team's subpar results: As of July 15, the fund is up 10% since the duo arrived, compared with the fund's Russell 2000 Growth Index, which is up only about 2. Read more

Kudos

The fund keeps an eye on valuation, requiring at least 25% upside potential before diving into a stock.

Performance has improved under Ellis' watch.

Limits sector bets by staying within 3.5 percentage points of its bogy's weightings.

Reasonable expense ratio. Read more

Risks

Management's price consciousness and emphasis on quality (high returns on equity and modest financial leverage) means the fund could lag in a speculative-growth rally.

The fund's large size could make it hard for it to own some of the smallest companies in its universe. Read more

Strategy

Manager Juliet Ellis starts with a universe of stocks that resembles the Russell 2000 Growth Index. The fund screens for companies exhibiting a combination of earnings and revenue growth, attractive valuations, and favorable price trends. Read more

Management

Lead manager Juliet Ellis and comanager Juan Hartsfield have run this fund since September 2004. Clay Manley was promoted to comanager in May 2008. All three managers have sector responsibilities: Ellis leads the team's health-care efforts; Hartsfield covers consumer-related stocks; and Manley covers tech stocks. Read more

Inside Scoop

This fund received a makeover when manager Juliet Ellis took over here in September 2004. Ellis is a skilled investor who built a strong record at her previous charge, JPMorgan Dynamic Small Cap Growth. Read more

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