Morningstar - Q1 2023 - 53

Small-Growth Veterans
Loomis Sayles Small Cap Growth Fund's managers continue
to deliver excellent results.
BEST IDEAS: MANAGER
Jader Dutra
This article is adapted from the fund's Morningstar Global Fund Report dated
Dec. 14, 2022.
Loomis Sayles Small Cap Growth is led by skilled veteran comanagers
executing a differentiated process. All share classes of the strategy receive
a Morningstar Analyst Rating of Silver.
Comanagers Mark Burns and John Slavik have demonstrated skill and
discipline over their tenure. The two joined forces in April 2005 to lead the
strategy. They are some of the small-growth Morningstar Category's
most seasoned managers, with most of their industry experience focused
on small-cap equities. They are supported by a team of seven dedicated
to their strategies. Among those members, three have more than a decade of
industry experience and at least five years at the firm. Only two analysts
have left the team during the managers' tenure, suggesting the team's recent
departure is an anomaly in an otherwise stable record.
The team's approach emphasizes risk mitigation with certain unique
components. Companies are screened for underappreciated earnings power
and low share turnover. The preference for low share turnover is to identify
inefficiently priced stocks, an interesting layer to the process. One of
the risk mitigation components is a stop-loss that triggers based on a drop in
both absolute and relative value against the benchmark, which has
proved effective. Ultimately, the process remains bottom-up-oriented and
combines proprietary screening with traditional research.
The strategy's process has led to consistent outperformance under the
lead managers' tenure. The I shares' 10.6% annualized returns since
April 2005 through November 2022 have outpaced the small-growth category
average by 270 basis points and the Russell 2000 Growth Index by 240
basis points, driven almost exclusively by stock selection. The fund also boasts
impressive downside protection thanks to the approach's risk management
focus. Case in point is the trailing 12 months through November 2022,
during which time the I shares fell 17%, handily better than the benchmark's
21% loss, as well as 71% of its small-growth peers. Strong stock selection
in healthcare and tech buoyed returns, namely Halozyme Therapeutics HALO
and Rambus RMBS, respectively. K
Jader Dutra is a manager research analyst at Morningstar Research Services LLC.
Loomis Sayles Small Cap Growth LSSIX
Stats 12/31/2022
Morningstar Analyst Rating
„
Fee Level
Average
Process
High
Growth of 10K 12/31/2022
$20K
15
10
5
01/2020
Value
Blend
01/2021
Morningstar Style Box 11/30/2022
Growth
Snapshot as
of most recent
portfolio.
01/2022
Morningstar Ratings 12/31/2022
Period
Mstar
Return
3-Yr
5-Yr
10-Yr
Mstar
Risk
Loomis Sayles
Small Cap Growth
11.38
Morningstar
US Small Growth
9.48
Morningstar Category
Small Growth
10-Yr Annlzd Return
11.34%
Morningstar Pillars 12/31/2022
People
Above Average
Parent
Average
Expense Ratio
0.92%
10-Yr % Rank in Cat
21
Mstar
Rating
Average Below Avg QQQ
Above Avg Below Avg QQQQ
Above Avg Average QQQQ
Overall Rating
Top 5 Sectors 11/30/2022
■ Fund ❙ Category Average
d Healthcare
p Industrials
a Technology
t Consumer Cyclical
y Financial Services
0%
17.50
10.92
9.02 9.37
10
morningstar.com/products/magazine
13.22
20
30
53
22.55
19.06
18.85 22.71
26.80
QQQQ
Small
Mid
Large
https://www.morningstar.com/stocks/xnas/halo/quote https://www.morningstar.com/stocks/xnas/rmbs/quote http://www.morningstar.com/products/magazine
Morningstar - Q1 2023

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