A small-cap growth holding actively seeking long-term capital appreciation

Focusing on stocks of companies with capitalizations of less than $2 billion, the Fund targets those that exhibit solid fundamentals and strong growth potential. Through in-depth proprietary research, the portfolio managers identify companies that they believe have sustainable 20% growth, reasonable valuation, potential earnings surprise and an acceptable cash flow.

Strong capital appreciation potential

The Fund can be an important holding for many investors because of its potential for long-term capital appreciation and as a complement to a large-cap stock holding. In particular, investors should note that small-cap growth stocks have sometimes offered greater growth potential in a recovery environment than their larger-capitalization counterparts despite their increased volatility when compared to large caps.

Impressive long-term track record

While past performance is no guarantee of future results, the Fund’s emphasis on long-term growth has enabled it to produce solid results for its shareholders over time, despite the acknowledged volatility of small cap growth stocks over the short term.

Seasoned management

The Fund boasts a deep, experienced investment team with strong continuity. The managers apply a strategic approach to fundamental investing, exercise a strict buy/sell discipline in portfolio construction and utilize risk management that relies on diversified sector exposure. Of course, diversification does not guarantee a profit or protect against a loss.

• Define universe – Starting with a universe of companies with a market capitalization between $100 million and $2 billion, the manager seeks to narrow the list by applying quantitative and qualitative screens.
• Apply quantitative screens – The manager rules out companies that do not exhibit: sustainable 20% growth, reasonable valuation, potential earnings surprise and an acceptable cash flow.
• Apply qualitative screens – The manager also rules out those companies that do not have: a supportive secular trend, significant management ownership, product leadership, favorable industry characteristics and investor interest.
• Create portfolio – From the remaining candidates, the manager seeks to develop a portfolio of 70–110 high-quality, small-cap growth stocks. Without introducing any industry bias, the manager tries to lessen the portfolio's risk exposure by not allowing any one position to account for more than 5% of the portfolio at market value.

Mr. Corelli is a Portfolio Manager at Oppenheimer Capital. Prior to joining Oppenheimer Capital, he was portfolio manager at PEA Capital, LLC, an affiliate of Oppenheimer Capital, from 1999-2006. Prior to that, he spent six years at Bankers Trust working on the small- and mid-cap growth strategies. Mr. Corelli holds a BA from Bucknell University.

Mr. Sartorius is Vice President of Oppenheimer Capital and senior research analyst for Oppenheimer Capital's Small Cap Growth strategy. Prior to joining Oppenheimer Capital, he was portfolio manager at PEA Capital, LLC, an affiliate of Oppenheimer Capital, from 2001-2006. Prior to that he spent two years as research associate covering the technology sector at Fred Alger Management. He is a CFA charterholder and holds a BA from Williams College.

New York, NY

Oppenheimer Capital (OCC) provides a broad range of innovative equity investment strategies for both institutional and individual investors. The firm’s disciplined approach to money management is focused on delivering alpha to investors’ portfolios through proprietary, bottom-up research that results in differentiated insights.