Mr. Hodges: We've always been a bottom-up advisory firm specializing in equities. We have a multi-cap approach to investing in companies of all sizes and styles, value, growth and super-growth. Our research organization devotes all of its time and effort to researching companies. We have recently expanded that multi-cap approach of the Hodges Fund, our flagship fund, and have developed some specialized funds that are extensions of our multi-cap focus. The Hodges Fund has had a very good record over the years. Since we started in 1992, we have a history of performance with that particular style of investing. In December of 2007, we started a small-cap fund based on the premise that small caps in our multi-cap fund had been some of our better performing stocks. We discovered that the overall return in the small caps was a little higher than the average return in the multi cap. Consequently, we decided that we could have an attractive and logical product with a small-cap fund (HDPSX).
Just this year, in fact in September, we've brought three new funds to the market that were more or less components of the multi cap. They are a Blue Chip 25 Fund (HDPBX), which will own some 20 to 30 high-quality blue-chip stocks. We've started an Equity Income Fund (HDPEX), investing in stocks that pay dividends. About 75% of those stocks will be stocks that pay above-average dividends, and then about 25% will be devoted to stocks that pay smaller but growing dividends. As a result of the 2008 market decline, we're discovering more investors like dividends. I think that's a symptom of having gone through such a disappointing market.
The third fund we've chosen to specialize in is a Pure Contrarian Fund (HDPCX), buying only stocks that are really beaten up and out of favor and that Wall Street for the most part doesn't like anymore. We've always done a lot of that type of investing and think that we've done a good job at it, so we believe there's logical justification for adding the pure contrarian fund. With the pure contrarian fund, a smaller percentage of the investments work out as planned, but the ones that do work out well tend to make a good overall return. It seems to be a little bit defensive in that so many of the stocks we're buying in that fund have already been severely beaten up and there's not as much downside risk as appears on the surface. Our philosophy of all equity, all cap size and all styles of investing is based on a philosophy that has evolved from being in the business a long time and observing what really works in the markets.
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