Investment in Focus: Oberweis Small-Cap Opportunities (US6743753088)
- Triplet 59
- Sep 23
- 5 min read
The world of small companies has always been a land of opportunity and volatility. For many investors, small-caps are where hidden gems are discovered: those firms with novel products, nimble business models, or disruptive technologies that large companies don’t yet do. But discovering them takes patience, research, and a willingness to live with sharp swings. The Oberweis Small-Cap Opportunities Fund (OBSOX) is built for those who believe in the stories behind small companies — in misrecognized growth, under-analysed catalysts, and in the long game.
Launched on September 15, 1996, OBSOX is managed by Oberweis Asset Management. Over nearly three decades, its philosophy has been consistent: focus on small-cap growth companies that are often misunderstood by the market, invest only where analysts’ expectations are too low, seek inflection points, revenue or earnings acceleration, and apply rigorous fundamental research.
This isn’t a fund for playing safe. In strong growth markets, OBSOX can shine. But in weak small cap environments, it can suffer. The balance comes from stock-picking, risk controls, and conviction.
Key Facts & Structure
Feature | Details |
ISIN / Ticker | US6743753088 / OBSOX (Investor Class) |
Inception Date | September 15, 1996 |
Fund Type / Category | U.S. Small-Cap Growth mutual fund; Small-Cap Opportunities strategy |
Benchmark | Russell 2000 Growth Index |
Minimum Investment | Investor Class: US$1,000 (non-IRA); Institutional is higher. |
Expense Ratio | ~ 1.25% net for Investor class (OBSOX) |
Portfolio Holdings & Sectors | Mainly U.S. small companies; key sectors include Technology, Healthcare, Industrials, Consumer Cyclical. ~88% U.S. stock, ~3% cash, rest non-US small exposure. |
Turnover | Relatively high. Portfolio turnover has been ~ 134% in recent year(s) (meaning active trading) |
Strategy & Philosophy
What they look for: Oberweis seeks small-cap companies with potential for strong earnings growth, especially where the market underestimates future growth. They focus on revenue acceleration, earnings growth, operating leverage, business models with scalability, and niche competitive advantages.
Undervalued / Analyst lag: A key part of their strategy is finding companies where analysts or the broader market have not yet priced in upcoming catalysts — whether new products, management changes, regulatory shifts, or other inflection points.
Small-cap definition: The adviser typically invests at least 80% of net assets in small-cap stocks. “Small cap” is defined relative to Russell 2000 Growth Index, and/or companies within that range.
Performance Highlights
Here are a few recent performance notes and behavior patterns:
Recent returns: Past 1 year return (Investor Class) is modest — several sources put it around +5–10%, depending on the period.
Long-term growth: Since inception (1996), the fund has achieved very strong absolute return (cumulative return of well over 1,000%) though with periods of deep drawdowns.
Volatility & downside: The fund tends to exhibit high volatility. In weak small-cap or growth-unfriendly periods, it underperforms broader or mid-cap indexes. For example, max one-year loss and sharp drawdowns observed in challenging market periods (such as 2008, 2022)
Strengths & Risks
Strengths:
Potential for alpha: Because it seeks hidden growth among smaller companies, there is potential for outsized gains when those firms succeed.
Strong research process: Oberweis employs a disciplined, fundamental approach; looks for businesses with potential earnings surprises, scalable models, niche leadership.
Diversified within small cap: Though concentrated comparatively to large-cap funds, sectors are multiple; not overly concentrated on any single holding.
Long track record: Over ~ 25+ years through many market cycles, which gives insight into how the strategy behaves in good and bad times.
Risks:
High volatility: Small-cap growth tends to suffer more in downturns, rising interest rates, or when growth expectations are re-rated downward.
High expense ratio: At ~1.25%, fees are materially higher than many passive or large-cap funds. Costs eat into returns especially in flat or down markets.
Turnover & tax cost: High portfolio turnover (e.g. ~134%) implies transaction costs, and if held outside tax-sheltered accounts, possible tax drag.
Market risk: When small-cap or growth sectors underperform or when macro headwinds hit (rates, inflation, regulatory risk), OBSOX can lag significantly.
Concentration risk: Although diversified, top few holdings can carry outsized weights; poor performance by any major holding can hurt.
Narrative Snapshot
Picture an investor who has followed rising tech, niche industrials, healthcare innovation — but felt that many of the less followed names remain undervalued. These are firms with ambitious product pipelines, but minimal analyst coverage. Maybe a management change, or a breakthrough product, or a new market opening might spark growth. OBSOX is the fund for someone who believes those stories are underpriced.
In years of small cap strength, OBSOX delivers. But it demands patience: when the market rotates away from growth or small cap, it can lag badly. Investing in OBSOX is a bit like buying tickets on a long‐distance express: the ride is bumpy, but the potential reward can be high — if you stay on through the turbulence.
How Verī Platform Helps Clarify
At Verī, our mission is simple: to provide access to the entire universe of investments — from income to accumulation strategies, passive to active approaches, low-risk to high-risk instruments, across all asset types, currencies, and regions.
When we highlight funds or securities such as OBSOX, it is not an endorsement, recommendation, or promotion of that specific investment. Rather, it is a demonstration of the wide spectrum of options available through the Verī Platform.
Our role is to enable access and transparency — giving investors and institutions the ability to see, compare, and evaluate a universe of choices, so they can make their own informed decisions in line with their objectives and responsibilities.
MPS (Model Portfolio Solution) Section for OBSOX
Here’s how OBSOX might be used (if at all) within Verī’s Model Portfolio Solutions, depending on different investor goals:
Portfolio Type | Possible Allocation to OBSOX | Role & Considerations |
Aggressive / Growth-Oriented | 5-15% of equity sleeve | Used to amplify returns via exposure to highly growing small companies; accept higher drawdowns. |
Balanced / Moderate | 1-5% | Smaller slot as a “growth kicker” — some upside, but the majority of equity exposure would be more diversified and less volatile. |
Conservative / Income-Focused | Likely 0% or very minimal (<1%) | Given high volatility and risk, OBSOX would usually be outside or a minor spec allocation. |
Long-Term Accumulation Portfolios | Might play a larger part for investors with long horizons, willing to tolerate swings, and needing capital appreciation over decades. | |
Cycled Exposure / Satellite Role | Used as a satellite position alongside core holdings, or rotated in/out depending on small-cap/growth outlook. |
Important MPS considerations with OBSOX:
Requires active monitoring because of sensitivity to macro (rates, inflation, sentiment).
Rebalancing is essential — gains can be large, but drawdowns can erode benefit if not managed.
Tax implications and fees must be considered carefully especially in taxable accounts.
Not suited as core low-risk anchor; best paired with diversified, more stable assets.
Disclaimer
This article is provided for informational purposes only. It is not intended as investment advice, financial advice, or a recommendation to buy, sell, or hold any security, fund, or other financial instrument. The information reflects publicly available data and analysis at the time of writing and may change without notice.
Verī Platform does not provide personal investment recommendations. Investors should carefully consider their own objectives, risk tolerance, and financial circumstances before making any investment decisions. Where necessary, seek independent advice from a licensed financial adviser.
Past performance is not indicative of future results. All investments involve risk, including the potential loss of capital.
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