[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-seo-201539-105":3,"doc-detail-201539-en":81,"detail-sidebar-cat-0-en-105":97},{"code":4,"msg":5,"data":6},0,"ok",{"site_id":7,"language":8,"slug":9,"title":10,"keywords":11,"description":12,"schema_data":13,"social_meta":74,"head_meta":76,"extra_data":78,"updated_unix":80},105,"en","ariel-focus-fund-letter-final","Ariel Focus Fund Letter - Final","","Ariel Focus Fund’s fourth-quarter and full-year performance is compared against the Russell 1000 Value Index, highlighting modest relative underperformance in the quarter and a strong calendar-year gain. The letter explains how portfolio positioning across market caps and a value-oriented process aim to capture small-cap effects and the documented value anomaly, while noting recent reversals favoring growth since 2008–2009. It also outlines the Buy/Sell discount-to-intrinsic-value ranking and provides examples of holdings with large discounts, then discusses trimming winners as positions approach intrinsic value.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/research-report/","Research & Report",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/ariel-focus-fund-letter-final/201539/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/ariel-focus-fund-letter-final/201539.png","ImageObject",300,407,{"name":42,"@type":43},"Mali","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-30","2026-09-04",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",14,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"How did Ariel Focus Fund perform in the fourth quarter and over the full year compared with its benchmark?","Question",{"text":63,"@type":64},"In the fourth quarter, Ariel Focus Fund slightly underperformed, at -1.19% versus -1.98% for the Russell 1000 Value Index. For the full year, it rose +13.48% compared with +14.37% for the Russell 1000 Value.","Answer",{"name":66,"@type":61,"acceptedAnswer":67},"Why does the letter emphasize “Smaller with More Value”?",{"text":68,"@type":64},"It attributes the results to the portfolio’s smaller market capitalization and weighting versus the benchmark, during a period when large caps and growth were strong. It also explains the strategy as an “all cap” approach that seeks value across capitalization ranges.",{"name":70,"@type":61,"acceptedAnswer":71},"What is the role of intrinsic value discounts in the investment process?",{"text":72,"@type":64},"The process ranks holdings from the highest discount to intrinsic value to the lowest using a daily Buy/Sell chart. At year-end, several top-discount companies had market capitalizations below $10 billion and traded at much higher discounts than the overall portfolio average.","https://schema.org",{"og:url":32,"og:type":75,"og:title":10,"og:site_name":45,"og:description":12},"article",{"robots":77,"canonical":32},"index,follow",{"doc_id":79,"site_id":7},201539,1788535250,{"code":4,"msg":82,"data":83},"success",{"doc_id":79,"user_id":84,"nickname":42,"user_avatar":85,"doc_module":4,"category_id":86,"category_name":29,"doc_title":10,"doc_description":12,"doc_content":87,"file_id":88,"file_url":89,"file_type":90,"file_size":91,"view_count":55,"is_deleted":4,"is_public":22,"is_downloadable":22,"audit_status":22,"page_count":33,"language":92,"language_code":8,"site_id":7,"html_lang":8,"table_of_contents":93,"faqs":94,"seo_title":95,"seo_description":12,"update_tm":80,"read_time":96,"preview_page_count":4},2336475104362,"https://ap-avatar.wpscdn.com/avatar/22000c4c46a41b752dd?x-image-process=image/resize,m_fixed,w_180,h_180&k=1786595829695023868",8,"| Performance (%) as of December 31, 2024 |  |  |  |  | Annualized |  |  |\n| --- | --- | --- | --- | --- | --- | --- | --- |\n|  | QTR | YTD | 1-Year | 3-Year | 5-Year | 10-Year | Since\u003Cbr>Inception |\n| Ariel Focus Fund |  |  |  |  |  |  | 06/30/2005 |\n| ARFFX Investor Class | -1.19 | 13.48 | 13.48 | 3.28 | 7.37 | 6.24 | 6.28 |\n| AFOYX Institutional Class | -1.12 | 13.73 | 13.73 | 3.54 | 7.64 | 6.50 | 6.45 |\n\n\n| Russell 1000® Value Index | -1.98 | 14.37 | 14.37 | 5.63 | 8.68 | 8.48 | 8.00 |\n| --- | --- | --- | --- | --- | --- | --- | --- |\n| S&P 500® Index | 2.41 | 25.02 | 25.02 | 8.94 | 14.52 | 13.10 | 10.68 |\n| Past performance is not indicative of future results. An investment’s return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Performance data as of the most recent month-end may be obtained by visiting our website, [arielinvestments.com](arielinvestments.com). |  |  |  |  |  |  |  |\n\nDear Clients and Friends: In the fourth quarter, Ariel Focus Fund outperformed the Russell 1000 Value Index, marginally falling-1.19% versus-1.98% for its primary benchmark. For the full year, Ariel Focus Fund increased +13.48% compared to +14.37% for the Russell 1000 Value.  \nSmaller with More Value  \nOver the course of the year, the smaller market capitalization of our portfolio versus the benchmark as well as our smaller weighting in growth stocks penalized our results during a time when large cap stocks continued to crush small cap issues and growth continued to trounce value.  \nAs an “all cap” portfolio, Ariel Focus Fund can buy value across the cap ranges. We do this for three reasons. First, there has been consistent evidence in academic literature of a “small cap effect” in which smaller companies have outperformed larger companies over long investment horizons. Explanations for this effect are varied but include: less sell-side research resulting in less efficient pricing of small cap stocks; more difficulty in maintaining growth rates for large companies due to “the law of large numbers,” and reduction in the primacy of shareholder interest in governance as companies become large. In our view, there is much more focus on “stakeholder interest” in large companies rather than the primacy of“shareholder interest” in smaller companies.  \nLikewise, the “value anomaly” in which value stocks have beaten growth stocks has been well documented in the financial literature. Fama and French were among the first of many to show how companies trading at low multiples of earnings and/or low percentages of accounting net worth tended to outperform. We acknowledge the recent reversal of this effect, with growth outperforming value since the Great Financial Crisis of 2008- 2009, has been larger and lasted longer than we would have expected.  \nWe also own more small cap value stocks than the benchmark, because our investment process is centered on purchasing companies whose shares are trading at discounts to our calculation of intrinsic value. Generally, weare finding more of these companies in the lower end of the market cap range and among value stocks. At Ariel, our daily Buy/Sell chart ranks our portfolio holdings from highest discount to intrinsic value to lowest. At year-end, eight of the ten portfolio companies trading at the highest discount to intrinsic value, or what we  \ncall Private Market Value (“PMV”), have a market capitalization of less than $10 billion. These eight companies were trading at discounts to PMV of 33-48% compared to an average discount of 21.8% for the entire portfolio. Conversely, the five companies at the bottom of our Buy/Sell chart, trading much closer to our calculation of intrinsic value, have a market cap above $10 billion—four exceed $100 billion in market cap.  \nJust as our valuation analysis points to smaller companies, we are also finding more opport","cbCaics5eHH3r4kL","https://ap.wps.com/l/cbCaics5eHH3r4kL","pdf",279085,"English","# Ariel Focus Fund Performance Summary\n## Q4 and Full-Year Returns vs. Russell 1000 Value Index\n# Smaller With More Value\n## Small Cap Effect and Value Anomaly\n## PMV Discount-to-Intrinsic-Value Framework\n# Trimming Winners\n## Reducing Positions Approaching Intrinsic Value","[{\"question\":\"How did Ariel Focus Fund perform in the fourth quarter and over the full year compared with its benchmark?\",\"answer\":\"In the fourth quarter, Ariel Focus Fund slightly underperformed, at -1.19% versus -1.98% for the Russell 1000 Value Index. For the full year, it rose +13.48% compared with +14.37% for the Russell 1000 Value.\"},{\"question\":\"Why does the letter emphasize “Smaller with More Value”?\",\"answer\":\"It attributes the results to the portfolio’s smaller market capitalization and weighting versus the benchmark, during a period when large caps and growth were strong. It also explains the strategy as an “all cap” approach that seeks value across capitalization ranges.\"},{\"question\":\"What is the role of intrinsic value discounts in the investment process?\",\"answer\":\"The process ranks holdings from the highest discount to intrinsic value to the lowest using a daily Buy/Sell chart. At year-end, several top-discount companies had market capitalizations below $10 billion and traded at much higher discounts than the overall portfolio average.\"}]","Ariel Focus Fund Letter - Final | PDF",10,{"code":4,"msg":82,"data":98},[99,103,107,111,116,121,126,129,134,137,140],{"id":22,"doc_module":4,"doc_module_name":25,"category_name":100,"show_sort_weight":101,"slug":102},"Story & Novel",90,"story-novel",{"id":26,"doc_module":4,"doc_module_name":25,"category_name":104,"show_sort_weight":105,"slug":106},"Literature",80,"literature",{"id":33,"doc_module":4,"doc_module_name":25,"category_name":108,"show_sort_weight":109,"slug":110},"Exam",70,"exam",{"id":112,"doc_module":4,"doc_module_name":25,"category_name":113,"show_sort_weight":114,"slug":115},5,"Comic",60,"comic",{"id":117,"doc_module":4,"doc_module_name":25,"category_name":118,"show_sort_weight":119,"slug":120},6,"Technology",50,"technology",{"id":122,"doc_module":4,"doc_module_name":25,"category_name":123,"show_sort_weight":124,"slug":125},7,"Healthcare",40,"healthcare",{"id":86,"doc_module":4,"doc_module_name":25,"category_name":29,"show_sort_weight":127,"slug":128},30,"research-report",{"id":130,"doc_module":4,"doc_module_name":25,"category_name":131,"show_sort_weight":132,"slug":133},9,"Religion & Spirituality",20,"religion-spirituality",{"id":132,"doc_module":4,"doc_module_name":25,"category_name":135,"show_sort_weight":132,"slug":136},"World Cup","world-cup",{"id":96,"doc_module":4,"doc_module_name":25,"category_name":138,"show_sort_weight":96,"slug":139},"Lifestyle","lifestyle",{"id":141,"doc_module":4,"doc_module_name":25,"category_name":142,"show_sort_weight":112,"slug":143},19,"General","general"]