Portfolio Review During the fourth quarter the Westport Select Cap Fund's R shares rose 9.40%, ahead of the Russell 2000® Index's gain of 8.72%. For the year, the Select Cap Fund's R shares modestly trailed the Index with an increase of 37.22% compared to a return of 38.82% for the Russell 2000® Index. Since inception 16 years ago, the Select Cap Fund R shares have outperformed by just under 3 percentage points a year, 10.55% to 7.70%, both compounded annually. Obviously, 2013 was a remarkable year for small cap stocks. Only one other time in the past sixteen years has the Russell 2000® Index gained more than 30% and that was in 2003, but that year's gain followed a prior year loss of over 20%. By contrast, 2013's rise came after a more than 16% gain in 2012.
In this environment the Westport Select Cap Fund performed well. None of the year-end portfolio holdings declined in value. In fact, the largest negative impact (0.51 basis points***) came from Forest Oil Corp., a position that was eliminated earlier in the year. Continue Reading »