Davenport Small Cap Focus (DSCPX) Clobbers the Broader Market
This small-cap stock fund has roughly doubled from its 2020 lows, but it has been delivering market-beating performance for far longer.


Shares in small companies were already hopping when news of a potential COVID-19 vaccine boosted prices even more. Since bottoming in March 2020, the Russell 2000 Index of small-company stocks is up 100.8% on a total-return basis (price plus dividends), beating the 67.3% rise in the S&P 500 Index from its March low.
Davenport Small Cap Focus (DSCPX, $18.22) did even better, with a 101.6% return.
Managers Chris Pearson and George Smith keep a trim portfolio of 33 small, little-known firms that generate robust cash flow and are run by executives with a proven ability to reinvest the cash wisely. The average market value of holdings in the portfolio is $2.2 billion.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The managers favor firms run by founders or executives with big stakes in their company. The Fahari family, founders of Monarch Casino & Resort (MCRI, which includes Atlantis Casino Resort Spa in Reno, Nevada), own 34% of the company’s stock. When shares plunged 66% in early 2020, Smith and Pearson added to their stake in the casino company at low prices of $13 to $14 a share.
“They have arguably the best balance sheet in the industry,” says Smith.
Shares have nearly quadrupled since then.
Other top holdings in DSCPX include investment firm Cannae Holdings (CNNE) and Evoqua Water Technologies (AQUA), which provides cleanwater services and systems.
Smith and Pearson think of themselves as owners of businesses, not stock pickers. That’s the culture of Davenport & Co., the 157-year-old money management firm behind the fund. They are not restricted by rules on sector exposure or about whether to favor value or growth characteristics. But they keep a keen eye on risk. That’s one reason the fund is light on tech and health care names.
“In the world of small-cap tech and health care, risk rises significantly,” says Smith. “And a big part of our M.O. is to produce good returns with below-average risk.”
Both managers practice what they preach and have significant personal money in the fund.
“We invest alongside our investors and clients,” says Pearson.
That has worked for everyone so far. Over the past five years, Small Cap Focus’s 18.0% annualized return has beaten 99% of its peers (funds that invest in a mix of stocks with growth and value characteristics). That has topped the Russell 2000 and S&P 500, too.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.
-
Could This Little Known Data Shift Hurt Your 2026 Social Security COLA?
The BLS has changed how it measures the inflationary data that determines whether Social Security benefits will get a Cost-of-Living Adjustment (COLA). Will it hurt your benefits?
-
Financial Pros Provide a Beginner's Guide to Building Wealth in 10 Years
Building wealth over 10 years requires understanding your current financial situation, budgeting effectively, eliminating high-interest debt and increasing both your income and financial literacy.
-
Stock Market Today: Stocks Slip Ahead of Big Earnings, Inflation Week
Perhaps uncertainty about tariffs, inflation, interest rates and economic growth can only be answered with earnings.
-
Stock Market Today: Solid Signals Lift Stocks Despite Tariff Noise
Markets are whistling over the White House in an ongoing display of corporate America's enduring ability to survive and advance.
-
Stock Market Today: Trump's Copper Comments Cause a Stir
Markets remain resilient and monetary policy makers stand fast against a rising tide of new terms of trade, including around copper.
-
Stock Market Today: Trump Reextends His Tariff Deadline
When it comes to this president, his trade war, the economy, financial markets and uncertainty, "known unknowns" are better than "unknown unknowns."
-
Stock Market Today: President Trump Reboots the Tariff Trade
A broad consensus that markets hate uncertainty more than anything else is being tested on an almost daily basis in 2025.
-
Stock Market Today: It's 'Most Sectors Go' Ahead of Independence Day
The resilience trade continues to work, even for sectors and stocks with specific uncertainties.
-
Stock Market Today: S&P 500, Nasdaq Hit New Highs After Vietnam Trade Deal
Ahead of a key July 9 tariff deadline, President Trump said the U.S. has reached a trade deal with Vietnam.
-
Stock Market Today: Another Quarter, More Mixed Price Action
"Up and to the right" remains the general trend despite persistent uncertainty around critical policy issues.