Oberweis is an investment boutique with several strengths. While the Oberweis family retains significant control, the firm is 100% employee-owned, which has contributed to high retention among its investment team. Moreover, the firm has placed thoughtful capacity estimates for its strategies, which is welcome given the firm’s focus on small-cap strategies with high portfolio turnover.
Yet the firm’s success is still heavily dependent on Oberweis International Opportunities, a strategy subject to considerable key-person risk and to volatile results because of its high turnover, momentum-based approach. Although Oberweis has launched additional strategies and expanded its marketing team to try to diversify its lineup, roughly 80% of the firm’s assets still reside in its flagship strategy. Its U.S. micro- and small-cap strategies have seen some inflows after a solid round of performance, but unattractive fees limit their ongoing appeal and a firm decision to adopt the flagship’s investment strategy on most of its funds in 2014 because of that strategy’s success could heighten the performance correlation among the firm’s funds in smooth and rocky markets.