Strategy
Small & Mid Cap Opportunities
Quick Links
Overview
The Small and Mid Cap Opportunities (SMCO) portfolio uses a disciplined, bottom-up process grounded in fundamental analysis, valuation, and risk awareness. The strategy invests opportunistically across the small- and mid-cap universe, with no required stocks, industries, or sectors. SMCO provides diversified exposure to small- and mid-cap equities in a single, professionally managed portfolio.
- Active Management: Experienced active management in less efficient small- and mid-cap markets can create opportunities for excess returns. The portfolio typically holds 50–75 stocks, allowing for alpha generation while managing risk.
- Risk-Aware Approach: Portfolio volatility is managed through valuation, business fundamentals, position sizing, sector and industry exposure, and factor-based considerations.
- Diversification: SMCO can help diversify equity exposure by market capitalization and style, as small- and mid-cap returns are often less aligned with large-cap returns.
Inception Date: February 1, 2019
Benchmark: Russell 2500
Vehicles: Separately Managed Account (SMA), ETF
Portfolio Management Team:
Thomas B. Maher
Jason T. Mastronardi, CFA®
Core SMID-Cap Allocation
Provides essential exposure beyond large-cap equities through a diversified small- and mid-cap portfolio with a lower-risk profile than the broader small-cap universe.
Diversification Beyond Large Caps
Complements large-cap allocations by expanding exposure across market capitalizations, helping build a more balanced equity portfolio.
Adaptive Market Exposure
Actively flexes across value and growth and between small- and mid-cap companies to pursue stronger risk-adjusted returns and capitalize on market leadership rotation.
| Characteristics | |
|---|---|
| Number of Holdings | 62 |
| Average Market Cap ($Bill) | 13.0 |
| P/E (12M FWD) | 18.3x |
| EV/EBITDA | 10.7x |
| P/Cash Flow | 11.1x |
| P/Book | 3.2x |
| Total Debt to Common Equity | 96.6% |
| 1 Year Turnover | 33.7% |
Source: Bloomberg & INDATA
| Top 10 Holdings % | |
|---|---|
| Clean Harbors Inc | 2.9% |
| Cullen/Frost Bankers Inc | 2.5% |
| West Pharmaceutical Services Inc | 2.5% |
| Teledyne Technologies Inc | 2.4% |
| HealthEquity Inc | 2.4% |
| nVent Electric PLC | 2.3% |
| EQT Corp | 2.3% |
| IDACORP Inc | 2.2% |
| Magnite Inc | 2.1% |
| STERIS PLC | 2.1% |
Source: INDATA
| GICS Sector % of Portfolio | |
|---|---|
| Communication Services | 4.3% |
| Consumer Discretionary | 6.8% |
| Consumer Staples | 6.5% |
| Energy | 5.5% |
| Financials | 12.2% |
| Healthcare | 13.4% |
| Industrials | 21.1% |
| Information Technology | 16.1% |
| Materials | 5.9% |
| Real Estate | 2.8% |
| Utilities | 4.5% |
| Cash | 0.9% |
Source: INDATA
| Metric | 1 Year* | 3 Year* | 5 Year* | Since Inception* |
|---|---|---|---|---|
| SMCO Gross | 3.3% | 12.9% | 7.3% | 11.0% |
| SMCO Net | 2.6% | 12.3% | 6.6% | 10.3% |
| Russell 2500 | 17.4% | 17.7% | 7.5% | 11.1% |
*Preliminary & Unaudited
Inception Date: February 1, 2019
Source: Bloomberg & INDATA
| Metric | 2019* | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | YTD 9/30/26** |
|---|---|---|---|---|---|---|---|---|
| SMCO Gross | 15.7% | 18.3% | 23.5% | -11.2% | 13.9% | 18.2% | 7.2% | 2.7% |
| SMCO Net | 15.1% | 17.5% | 22.6% | -11.9% | 13.2% | 17.6% | 6.6% | 2.2% |
| Russell 2500 | 14.6% | 20.0% | 18.2% | -18.4% | 17.4% | 12.0% | 11.9% | 14.9% |
*Inception February 1, 2019
**Preliminary & Unaudited
Source: Bloomberg & INDATA
Explore More
Additional Resources
Videos
Small & Mid Cap Opportunities Strategy Overview
In this video Hilton's Investment Team discusses the Small and Mid Cap Opportunities ...
View Resource ↗Letter
Small & Mid Cap 3Q26 Letter: Black Cloud – Third Quarter Review
Unpack SMCO’s 3Q 2026 commentary on the AI-related selloff, portfolio adjustments, and ...
View Resource ↗Decks and Factsheets
Small and Mid Cap Opportunities Strategy
Take a deep dive into HCM's Small and Mid Cap Opportunities Strategy with a factsheet on ...
View Resource ↗Letter
Small & Mid Cap 2Q26 Letter: Win, Lose or Draw.
Check out SMCO’s 2Q 2026 commentary on strong absolute returns, narrow market leadership, ...
View Resource ↗Letter
SMCO 1Q26 Letter: Close to the Edge
In SMCO’s Q1 2026 letter, we share how the SMID-cap portfolio navigated volatility and ...
View Resource ↗Letter
SMCO Year-End 2025 Letter
In SMCO’s Q4 2025 review, the team discusses 2025's policy uncertainty and volatility—and ...
View Resource ↗Letter
Small and Mid Cap Q3 25 Recap
Take a bow for the new revolution – Side Two of Who’s Next
View Resource ↗Letter
Small and Mid Cap Q2 25 Recap
Have a cigar … or is it a CIGar…
View Resource ↗Letter
Small and Mid Cap Q1 25 Recap
SMCO Portfolio Manager Tom Maher discusses Q1 2025's “crossfire hurricane” market, ...
View Resource ↗Letter
Small and Mid Cap Q4 24 Recap
Tom Maher, SMCO portfolio manager, recaps 2024’s market highs and lows and shares ...
View Resource ↗Videos
Where does SMCO fit in a portfolio?
Discover how Hilton’s Small & Mid Cap Opportunities (SMCO) strategy can enhance your ...
View Resource ↗