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Strategy

Small & Mid Cap Opportunities

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®

Small and Midcap Opportunities 

Implementation

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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.

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Diversification Beyond Large Caps

Complements large-cap allocations by expanding exposure across market capitalizations, helping build a more balanced equity portfolio.

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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.

Portfolio

As of September 30, 2026

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

Performance

As of September 30, 2026

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

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 ...

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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 ...

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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 ...

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Letter

Small & Mid Cap 2Q26 Letter: Win, Lose or Draw.

Check out SMCO’s 2Q 2026 commentary on strong absolute returns, narrow market leadership, ...

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Letter

SMCO 1Q26 Letter: Close to the Edge

In SMCO’s Q1 2026 letter, we share how the SMID-cap portfolio navigated volatility and ...

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Letter

SMCO Year-End 2025 Letter

In SMCO’s Q4 2025 review, the team discusses 2025's policy uncertainty and volatility—and ...

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Letter

Small and Mid Cap Q3 25 Recap

Take a bow for the new revolution – Side Two of Who’s Next

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Letter

Small and Mid Cap Q2 25 Recap

Have a cigar … or is it a CIGar…

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Letter

Small and Mid Cap Q1 25 Recap

SMCO Portfolio Manager Tom Maher discusses Q1 2025's “crossfire hurricane” market, ...

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Letter

Small and Mid Cap Q4 24 Recap

Tom Maher, SMCO portfolio manager, recaps 2024’s market highs and lows and shares ...

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Videos

Where does SMCO fit in a portfolio?

Discover how Hilton’s Small & Mid Cap Opportunities (SMCO) strategy can enhance your ...

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