American Century Investments has launched its American Century Global Small Cap Fund in Australia via a unit trust structure, making it available to local wholesale investors.
The fund is an actively managed portfolio predominantly comprised of listed global small cap equities. The strategy uses a fundamental, bottom-up investment process aimed at providing risk-adjusted returns over the long-term.
Senior portfolio manager of the small cap strategy, Trevor Gurwich, said the fund provides Australian investors with additional investment opportunities that they may not be able to access on their own.
“We believe our differentiated growth approach is well suited to global small cap investing. We also benefit from a well-resourced, experienced team,” he said.
“We utilize a distinct approach to growth investing which we believe takes advantage of persistent market inefficiencies and opens up a broader set of opportunities than a traditional growth approach.
“It is an opportune time to be launching the Fund in the Australian market, particularly given the positive outlook for small cap earnings growth and attractive small cap valuations relative to large caps.”
The investment objective of the fund is to achieve long-term capital growth through investment in an actively managed portfolio of equity securities issued by small capitalisation companies in both developed and emerging countries.
Its benchmark is the MSCI ACWI Small Cap Net ($AUD) Index, and the minimum suggested time frame for investment is at least five years.
The fund considers material environmental, social and governance issues and corporate governance practices and seeks to avoid companies that do not meet fundamental responsibilities, including in areas such as human rights, labour, environment, and anti-corruption as well as avoiding companies with exposure to controversial weapons, cluster munitions, and tobacco.
Gurwich said that as the global economy continued to recover from the impacts of COVID, there were some thematics which played into the hands of global small caps and investment portfolios.
“The stay-at-home thematic within small cap stocks is becoming less prevalent as people seek a return to normality and in-person experiences,” Gurwich said.
“Global small caps poised to benefit from the return to normality include travel and leisure companies, albeit the emergence of the Omicron variant has created hesitancy.
“We also see continued demand for robust IT spending, with companies realizing that IT investment is critical to their success in a hybrid world. Our bottom-up process is identifying well-run, small cap technology companies that are direct beneficiaries of that increased spending.”
