Bridgeway Small-Cap Value (BRSVX) is rated five stars by Morningstar; it one-, three-, and five-year annualized returns rank in the top 27th, 1st, and 1st percentiles, respectively, among peer funds, points out Scott Chan, editor of The Complete Investor.
Going back even further, its ten-year and fifteen-year ranks are, respectively, 3rd and 31st. This shows that it’s very difficult to find mutual funds that consistently outperform every year and are low cost.
Even good funds can have bad years once in a while — as BRSVX did in 2019. However, calculation of annualized returns over time can smooth out year-to-year fluctuations and shows the bigger picture.
To be clear, past performance does not guarantee future performance, but low fees and outperformance in most years are two important factors to consider, especially when there’s a stable management team in place, as is the case with BRSVX.
The longer a fund outperforms over time under the same manager(s), the more likely it is that the success is attributable to the manager(s) and not to luck. Of BRSVX’s three managers, two have been with the fund since 2005, and the third since fund inception in 2003.
Given BRSVX’s strong performance track record, its low fees are icing on a tasty cake. The fund does not have a load, and its 0.83% expense ratio is considered below average.
BRSVX is well diversified. As of the latest disclosure it held 130 stocks, with the Top Ten accounting for only 17% of the portfolio. It’s an actively managed fund. Nine of the top ten positions were originally purchased in the third quarter of 2021 or later and feature a mix of stocks from various sectors.
The very top position as of its most recent filing is International Seaways (INSW), a company that transports crude oil and petroleum products overseas. The stock began 2022 as a $14 stock but recently traded at around $40. BRSVX initiated the position in the 2022 first quarter, likely in reaction to the Russia/Ukraine situation.
Likewise, the fund has done very well in its third-largest holding Teekay Tankers (TNK), another petroleum ocean transport specialist whose shares it also first purchased in the March 2022 quarter. In fact, BRSVX’s Top Ten includes six stocks that have gain at least 20% in 2022, a difficult year for the overall market.
