Smid cap value

SMID Equity Income

Focused on selecting high-quality, SMID dividend growing companies.

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Strategy differentiators

  • Growers, not just payers
    Dividend growers and payers have historically had higher returns with less risk than non-dividend paying stocks.

  • Powered by great companies
    A quality first mentality removes subpar operators, helping to avoid value traps.

  • Sector neutral to help mitigate risk
    We are focused on selecting great companies, not timing sectors.

Choosing the right manager is crucial.

Active managers who can identify and invest specifically in high-quality, small- and mid-cap (SMID) dividend growers have historically delivered better returns with less risk over time.

Dividend growers: Better returns with less risk
Small- and mid-cap stocks, January 1987 – December 2023

Chart showing annualized standard returns and deviations of small and mid cap (SMID) stocks from January 1987 to December 2023.
Data as of December 31, 2023. Source: Ned Davis Research, Inc. Information provided is for the constituents of the Russell 2500® Value Index. Statistical information is provided for illustrational purposes and may not be replicated. Past performance is not a guarantee of future results. Market index has been provided for comparison purposes. Indexes are equal weighted.

Strategy facts

  • Manager

    Principal Edge

  • Inception

    1 March 2007

  • Index

    Russell 2500 Value Index

  • Targeted number of holdings

    60-90

  • Expected turnover

    25-35%

  • Investment vehicles

    CIT, IMA, Model-Only, SMA, U.S. Mutual Fund

Portfolio management

Principal Edge

Investing in quality companies with competitive advantages, financial strength, shareholder-oriented management teams, and strong or improving profitability. We are focused on quality first, with patience to invest at attractive valuations, and maintain a long-term investment horizon.

Co-Chief Investment Officer, Portfolio Manager
Daniel R. Coleman
44 years of experience
Co-Chief Investment Officer, Portfolio Manager
Sarah E. Radecki, CFA
27 years of experience
Associate Portfolio Manager
Lauren C. Choi
20 years of experience
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Past performance does not guarantee future results.

Equity markets are subject to many factors, including economic conditions, government regulations, market sentiment, local and international political events, and environmental and technological issues that may impact return and volatility. Dividends are not guaranteed.

Investment guidelines are subject to change.

Not all investment options are available in all jurisdictions. Certain vehicles have not been registered with the United States Securities and Exchange Commission under the United States Securities Act of 1933 and may not be directly or indirectly offered or sold in the United States or to any United States person.

The Russell 2500™ Value Index measures the performance of the small to mid-cap value segment of the US equity universe. It includes those Russell 2500 companies with relatively lower price-to-book ratios, lower I/B/E/S forecast medium term (2 year) growth and lower sales per share historical growth (5 years). The Russell 2500 Value Index is constructed to provide a comprehensive and unbiased barometer of the small to mid-cap growth market. The index is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small to mid-cap opportunity set and that the represented companies continue to reflect value characteristics.

Principal Edge is an investment team within Principal Global Investors.