Fund Description

The fund seeks long-term total return by investing at least 80% of its net assets in investments of small-capitalization companies, which are those with market capitalizations not exceeding either the highest market capitalization of the Russell 2000 Index or the 12-month average of the highest market capitalization in the Russell 2000 Index, whichever is greater at the time of purchase.

Strategy Statement

"We seek under-researched, small-cap companies ignored by Wall Street using a bottom-up strategy to find forgotten companies with good growth prospects, strong balance sheets, and bargain valuations."


Steven Raineri

Steven Raineri

  • Joined Franklin Templeton in 2005
  • Managed Fund Since 2012
Christopher Meeker, CFA

Christopher Meeker, CFA®

  • Joined Franklin Templeton in 2012
  • Managed Fund Since 2015
Nicholas Karzon, CFA

Nicholas Karzon, CFA®

  • Joined Franklin Templeton in 2014
  • Managed Fund Since 2019


Investment Process


Overall Morningstar Rating As of 04/30/2021

Rating Category: Small Value

The fund's overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Historical Morningstar Rating As of 04/30/2021

Years Ratings Funds
in category
4 Stars
5 Stars
4 Stars

Morningstar Style Box As of03/31/2021

Strategy, Benefits, Results


We are long-term, bottom-up investors looking for companies with solid operating results and trading at attractive valuations. We are bargain seekers looking for $1 worth of value for 80 cents.

We seek small-capitalization companies with the following characteristics:

  • Well managed companies with strong fundamentals that are selling at bargain valuations.
  • Stock prices that are low based on earnings, book value, cash flow or sales relative to the market, a company's industry or a company's earnings record.
  • Recent sharp price declines but the potential for good long-term earning prospects.
  • Valuable intangibles not reflected in the stock price, such as franchises, underused or understated assets or cash, or patents and trademarks.

We are buy-and-hold investors who generally seek to hold an investment for five or more years.


  • Small-Cap Exposure. We aim to take advantage of the prospects particular to small-cap companies, which may not exist among larger companies.
  • Broad Market Exposure. We invest in a variety of companies across multiple sectors and industries.
  • Value Expertise. Investors can benefit from our veteran management team with extensive value investing experience.