These 4 Small-Cap Value Funds Take Different Paths to Solid Long-Term Results

US small-cap value funds have offered compelling opportunities for long-term investors focusing on undervalued stocks with strong fundamentals. Strategies differ widely, from broad diversification to concentrated contrarian approaches, allowing investors to balance risk, quality, and potential returns.

Here’s how four prominent funds in the small-cap value Morningstar Category have performed since earning their current Morningstar Medalist Ratings.

DFA US Small Cap Value DFSVX invests in the smallest and cheapest US stocks, targeting the bottom 10% of the market by capitalization. From that universe, it emphasizes the cheapest third by price/book ratio. The strategy also screens out firms with weak profitability and aggressive asset growth, traits that are historically linked to weaker expected returns. Managed by Dimensional Fund Advisors, it holds more than 900 stocks and uses market-cap weighting and patient trading to limit turnover and costs. The portfolio maintains a deeper value tilt and slightly higher profitability than the Russell 2000 Value Index. The fund delivered strong results since earning its Silver rating in June 2018 through March 2026, with its institutional share class generating 9.1%, outperforming the average category peer and modestly lagging its primary prospectus benchmark.

Fidelity Small Cap Value FCPVX offers a quality-oriented approach to US small-cap equities. Manager Gabriela Kelleher emphasizes financially resilient, undervalued companies with durable competitive advantages and attractive reinvestment opportunities, seeking to differentiate the strategy from the lower quality names common in the Russell 2000 Value Index. Since its upgrade to Bronze in October 2025, which was driven by a Process Pillar upgrade, the fund delivered a 3.5% annualized return through March 2026. Kelleher joined this strategy as a comanager in May 2021. From then through March 2026, the strategy’s A share class gained 5.2% annualized, which modestly lagged the small-value category average and outperformed the Russell 2000 Value Index by 31 basis points. The strategy also had a 1.3-percentage-point advantage over the S&P SmallCap 600 Value Index, another relevant benchmark, given the strategy’s quality-oriented approach.

Hotchkis & Wiley Small Cap Value HWSIX first earned its Bronze rating in April 2020, and through March 2026, the fund delivered a 22.2% annualized gain, outperforming the Russell 2000 Value Index by 4.8 percentage points and the small-value category average by 3.9 percentage points. The strategy takes a contrarian, value-oriented approach, targeting deeply out-of-favor companies with potential for earnings mean reversion and durable growth. It often leans into unloved sectors such as energy and technology, resulting in higher volatility than typical peers. While short-term performance can lag in down markets, the fund has historically captured strong upside during rallies, including notable gains in 2022. Backed by a highly experienced 24-member research and portfolio management team, disciplined stock selection, and a long-term outlook, the fund remains a differentiated option for small-cap value investors.

Boston Partners Small Cap Value II BPSCX is a broadly diversified fund of small- and micro-cap US stocks screened for attractive valuations and strong fundamentals. From when it first earned a Bronze rating in September 2022 through March 2026, the fund delivered an 13.4% annualized return, lagging the Russell 2000 Value Index and the average small-value peer. Manager George Gumpert and his dedicated team construct a portfolio of 150-200 stocks, focusing on durable competitive advantages, positive business momentum, and potential catalysts to unlock value. Since Gumpert took over sole control in September 2022, the strategy has performed decently. Over the trailing three years through March 2026, the institutional shares’ 11.6% annualized return beat the average peer’s 11.4%.

This article first appeared in the March 2026 issue of Morningstar FundInvestor. Download a complimentary copy of FundInvestor by visiting this website.