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Wanger (Revised) Screen

Performance

  Wanger (Revised) S&P 500
YTD Return: 3.3% 8.4%
Five Year Return: 18.8% 14.4%
Ten Year Return: 12.1% 6.1%
Inception: 10% 4.4%
Data as of 8/29/2014
The Wanger (Revised) Screen represents AAII's interpretation of the investment approach and is not determined by the original strategist. The list of passing companies represents a hypothetical portfolio, which is used to track the screen’s performance on a chart.

Passing Companies

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Screening Criteria

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Chart

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First introduced in May 1997, our interpretation of the Ralph Wanger approach has experienced disappointing performance. While the period has seen mixed results for small-cap approaches, the screen has underperformed the S&P 600 Smallcap Index. We have decided to revisit our interpretation of the Wanger approach and examine it from a fresh perspective in the hope of improving the screen's performance while still capturing the spirit of Wanger's strategy.

Ralph Wanger has maneuvered the money management landscape for over 30 years. The Acorn Fund, which he started in 1970 and recently sold to Liberty Funds, is one of the oldest and best-performing small-cap mutual funds around. Using a contrarian approach to find quality small-cap stocks, he has been able to survive and even prosper.

Wanger likens professional money managers to zebras. Both groups have distinct goals—the money manager wants to generate above-average returns for his or her clients and the zebra wants to find grass to eat. While trying to achieve these goals, they both also face elements of risk, with the money manager trying to keep from being fired and the zebra trying not to become lion lunch. Finally, money managers and zebra travel in herds. Wanger believes that for both zebras and investors, it is best to stand outside the herd. For it is here that the zebra will find the freshest grass and investors can find investment opportunities that have gone untouched by mainstream investors. His philosophy to investing is that in order to stand out from the crowd, you have to stand outside the pack. In his book, "A Zebra in Lion Country: Ralph Wanger's Investment Survival Guide," Wanger outlines his strategy of finding opportunities and limiting risk in smaller-capitalization stocks.

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