JBTM - FPA Queens Road Small Cap Value Fund Q4 2024 Commentary

2025-03-24 08:35:00 ET

Summary

• The FPA Queens Road Small-cap Value Fund outperformed the Russell 2000 Value Index in 2024, returning 10.76% versus 8.05%, with a focus on long-term performance and risk management.
• The Fund's strategy emphasizes buying high-quality compounders and maintaining tax efficiency, with notable performers including Interdigital, Sprouts, and CSW Industries.
• Market commentary highlights the difficulty in finding reasonably valued quality small-caps, advocating for active management to navigate the "junkier" small-cap indices.
• Despite market volatility, the Fund's portfolio holdings' valuations, competitive positions, and execution track records inspire confidence for long-term growth.

Dear Shareholder,

The FPA Queens Road Small-cap Value Fund (“Fund”) returned 2.38% for the fourth quarter of 2024 compared to a -1.06% return for the Russell 2000 Value Index in the same period. For the full year, the Fund returned 10.76% versus 8.05% for the Russell 2000 Value Index.

We focus on long term performance. Our goal is to outperform the Russell 2000 Value Index with less risk over the full market cycle. As a result of our diligent, disciplined, and patient process, we expect to outperform in down markets and trail in speculative markets, consistent with our historical returns....

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