May 30, 2014
When most of the country’s public television stations are running pledge weeks, we are revisiting Consuelo’s interview with a WEALTHTRACK Great Investor who made his name investing in small company stocks. Charlie Dreifus, the portfolio manager of the Royce Special Equity funds explains why he now favors large companies in today’s markets. Watch that episode here.

We tracked down Great Investor Charles Dreifus at the Munich airport for an update on his view of the stock market and large vs. small cap stocks in particular.
You might remember from previous WEALTHTRACK interviews that Dreifus, a Morningstar Domestic Stock Fund Manager of the Year has run the small and micro-cap focused Royce Special Equity Fund successfully for the last 16 years and that he convinced his boss, small-cap pioneer Chuck Royce to let him launch a large-cap focused fund, the Royce Special Equity Multi-Cap Fund in 2010.

WEALTHTRACK Episode #1049; Original post on May 30, 2014

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Portfolio Manager

Royce Special Equity Multi-Cap Fund
Consuelo Mack

This weekend is the start of two weekend fund-raising drives on public television so WEALTHTRACK might be pre-empted in your local market. Consequently we are replaying a Great Investor interview we originally aired in January. We always check with our guests before we do this and the Royce Fund’s Special Equity funds’ portfolio manager, Charlie Dreifus told us the interview still represents his current thinking. 

Just in case there were any nuances we should be aware of, we did an audio podcast with him this afternoon, while he was in the Munich airport after visiting international clients. They wanted to know his current views of the U.S. market and so did we. The headline is he is still very bullish. He will elaborate on the webcast which is available on wealthtrack.com to PREMIUM subscribers tonight and everyone else in our EXTRA feature starting this weekend. 

They say the best things come in small packages and that has certainly been the case in the stock market in recent years. Over the last decade small company stocks have outperformed large company ones by a significant margin, delivering 10.4 % annualized returns versus 7.1% annualized returns for large-cap ones.  

Since the market bottom of 2009 small-caps have also led, as they did last year. The Russell 2000 index, considered the benchmark for small stocks, advanced 38.8% in 2013, whereas the widely followed S&P 500 lagged with a not-too-shabby 32.4% return. 

Five years into a bull market where are the best values to be found? That is a question this week’s guest asks himself every day. Three years ago his answer caused him to expand his long-time concentration in small company stocks to include large ones as well. 

For the past 16 years Charlie Dreifus has been recognized for managing the Royce Special Equity Fund, a value-oriented small and micro-cap fund that has beaten its benchmark Russell 2000 index since inception, with less than market volatility. In 2010 Dreifus launched another value fund, but this one was not in small-caps and never will be. It is the Royce Special Equity Multi-Cap Fund and it is emphasizing large-cap stocks right now. It has also beaten its benchmark, the Russell 1000 since its inception three years ago. 

Dreifus will tell us why he wanted to go into big company stocks and why they remain his asset class of choice. 

Also, in the WEALTHTRACK WOMEN series on our website our panel of financial advisors is focusing on the financial issues facing divorced women. There are several key ones, including the hidden costs of divorce that could affect divorce agreements and financial  planning.   

Have a lovely weekend and make the week ahead a profitable and productive one.

Best Regards,    

Mathews Asia

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No One Investment this episode. No stock mentions in this episode. PREMIUM subscribers have access to this transcript here.


A WEALTHTRACK Great Investor who has made his name investing in small company stocks explains why he now favors large companies. Charlie Dreifus, the portfolio manager of the Royce Special Equity funds discusses why big is better in today’s markets.


Dreifus was named Morningstar’s Domestic-Stock Fund Manager of the Year in 2008 and was just selected as a finalist for its Domestic Equity Fund Manager of the Decade award. Dreifus will discuss how he chooses the companies he invests in and the outlook for small cap stocks.

WEB EXTRA available soon.

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