Elena Khoziaeva, Bridgeway

Elena Khoziaeva is Co-CIO of Bridgeway Capital Management — a boutique systematic investment firm founded in Houston with a long history of factor-based investing and one of the more unusual missions in asset management. Bridgeway donates 50% of firm profits to the Bridgeway Foundation and caps its internal salary ratio at seven to one. Elena joined the firm in 1998 as partner number six and has spent 25 years building strategies grounded in academic theory and disciplined systematic research.

In this episode, Elena walks through BSVO — the Bridgeway Omni Small-Cap Value ETF — and what it means to build a small cap value strategy that's deeper on both factors than the benchmarks that dominate the category. The strategy carries a 15-year track record inside a modern ETF wrapper (converted from a mutual fund in 2023), holds approximately 600 names for diversification within the asset class, and uses a multi-metric valuation screen that produces a natural quality tilt. Elena explains why running value across the universe rather than within sectors produces the fund's characteristic tilts toward financials and away from healthcare, how the sidestep screens are designed to remove fallen knives from a deep value portfolio, and why BSVO's 79% correlation to the S&P 500 delivers meaningfully better factor diversification than the Russell 2000 Value.

She also makes the case for where small cap value sits right now — with the median book-to-market ratio versus the S&P at 2.8 versus a historical norm of 1.6, and a Q1 2026 that already showed the kind of rapid reversal small cap value tends to produce. Her framing: the tighter the spring, the more powerful the release.