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Strategy

Investment Objective

To increase the value of its shares, over the long term, through growth in the value of its investments. The fund invests mainly in a widely diversified portfolio of stocks from smaller capitalization companies in the United States.

Investment Approach

  • Focus on companies within the market cap range of the Russell 2500 Index at time of purchase.
  • Assess valuation using relevant sector/industry metrics — absolute and relative price to earnings, price to cash flow, and price to assets.
  • Integrate fundamental research by a dedicated Small-Cap research team to discover underfollowed companies possessing clear business plans, financial flexibility, and proven management teams.
  • Identification of a “value creation” catalyst is key.
  • Broadly diversify holdings to manage portfolio risk profile.
  • Employ a low turnover and patient trading strategy to promote full value realization.
  • Environmental, social and governance ("ESG") factors with particular focus on those considered most likely to have a material impact on the performance of the holdings or potential holdings in the funds’ portfolio are assessed. These ESG factors, which are incorporated into the investment process alongside financials, valuation, macro-economics and other factors, are components of the investment decision. Consequently, ESG factors are not the sole driver of an investment decision but are instead one of several important inputs considered during investment analysis.

Past performance is not a reliable indicator of future performance.

Annualised Performance

Current Year Performance

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31-May-2025 - Matt Mahon, Portfolio Manager

Major US stock indexes produced solid gains in May, as the equity market continued recovering from deep, tariff-related losses seen in early April. At the portfolio level, our stock picks in health care contributed to relative returns. Shares of a company that develops, manufactures, and markets products for pets and farm animals soared higher following the release of better-than-expected quarterly earnings as organic strength in the company’s farm animal segment helped drive results. The company also raised 2025 revenue and innovation sales guidance. Real estate boosted relative performance due to an underweight allocation. Although real estate stocks advanced in May, they strongly underperformed the broader index. Real estate tends to act like a bond proxy and the sector was pressured by the current market backdrop. Our underweight proved beneficial. Conversely, stock selection in information technology detracted from relative results. Shares of the market leader in SEC compliance software declined following the release of first-quarter earnings results. Although performance was generally solid, investors were concerned about a deceleration of revenue growth and declining net revenue retention.

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GIPS® Information

T. Rowe Price (“TRP”) claims compliance with the Global Investment Performance Standards (GIPS®).

A complete list and description of the Firm's composites and/or a presentation that adheres to the GIPS® standards are available upon request. Additional information regarding the firm's policies and procedures for calculating and reporting performance results is available upon request

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