Fund Evaluator:

GMO Small Cap Quality Fund Class VI Overview

GMO Small Cap Quality Fund Class VI (GSBGX) is an actively managed U.S. Equity Small Growth fund. GMO launched the fund in 2022.

The investment seeks total return. The adviser seeks to achieve the fund’s investment objective by investing the fund’s assets primarily in equities of U.S. small-cap companies that GMO believes to be of high quality. As an alternative to investing directly in equities, the fund may invest in exchange-traded and over-the-counter (OTC) derivatives and exchange-traded funds (ETFs). The fund also may invest in derivatives and ETFs in an attempt to obtain or adjust elements of its long or short investment exposure and as a substitute for securities lending.

About GMO Small Cap Quality Fund Class VI (GSBGX)

There are 3 members of the management team with an average tenure of 3.86 years: Thomas Hancock (2022), Hassan Chowdhry (2022), James Mendelson (2022). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: S&P Composite 1500 (TR) USD index with a weighting of 100% and S&P SmallCap 600 TR USD index with a weighting of 100%. GMO Small Cap Quality Fund Class VI has 43 securities in its portfolio. The top 10 holdings constitute 39.1% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

GMO Small Cap Quality Fund Class VI is part of the Equity global asset class and is within the U.S. Equity fund group. GMO Small Cap Quality Fund Class VI has 0.0% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 97.5%. There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). GMO Small Cap Quality Fund Class VI has 2.5% of the portfolio in cash.

Assets Under Management

The fund has $53 million in total assets, which is below the $431 million average for the Small Growth category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

GSBGX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The GMO Small Cap Quality Fund Class VI expense ratio is above average compared to funds in the Small Growth category. GMO Small Cap Quality Fund Class VI has an expense ratio of 0.67%, which is 43% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. GMO Small Cap Quality Fund Class VI has a portfolio turnover rate of 61%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 78% for the Small Growth category.

Recently, in the month of July 2026, GMO Small Cap Quality Fund Class VI returned -4.9%, which earned it a grade of B, as the Small Growth category had an average return of -6.7%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

GMO Small Cap Quality Fund Class VI has a trailing yield of 0.11%, which is above the 0.06% category average. The fund normally distributes its income semi-annually and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

GMO Small Cap Quality Fund Class VI Grades

Year to date, the fund has returned 10.3%, 3.3 percentage points worse than the category, which translates into a grade of D. The fund has returned 12.4% over the past year (grade of F) and 7.7% over the past three years (grade of D).

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