New global small-cap fund launches in Australia



Global small-cap equity specialist, Royce Investment Partners, which is part of Franklin Templeton, has announced the launch of a global small-cap fund for the Australian retail investment market.
Its new Global Small-Cap Premier Fund, which would hold a limited number of companies, typically between 60 and 85, would seek to invest in businesses which demonstrated the following three differentiators:
- Exceptional franchises – companies with durable competitive advantages operating in favourable industry ecosystems;
- Strong capital allocators – company management teams with histories of disciplined capital allocation; and
- Businesses with attractive reinvestment prospects – companies with opportunities to reinvest at high returns.
Royce said it was targeting returns that would exceed the MSCI All Country World Small Cap Index in Australian dollars over three to five years, with no more than 10% of the Fund’s NAV (net asset value) to be invested in any one company.
At the same time, the fund would not invest in securities listed on the Australian Securities Exchange (ASX).
“Small cap stocks have historically outperformed large caps over the long term and have often done particularly well when economies are expanding,” Royce Investment Partners founder, Chuck Royce, said.
“In the last year or so, the short but deep recession was followed by massive fiscal spending and extraordinary monetary accommodation. Based on our experience as small-cap specialists, we think it made sense that these developments led to the sort of strong move in small caps we’ve seen since the US market trough in March 2020.
“Now we have considerable pent-up demand—which was already growing prior to the pandemic. Along with healthy global financial conditions, the sounder underlying state of the economy is a very strong sign for positive small-cap performance.”
Royce said he was not overly concerned about the “inflation threat”, as small-cap businesses were generally nimbler than their larger peers and could adjust more easily to inflation.
Recommended for you
The merger with L1 Capital will “inject new life” into Platinum, Morningstar believes, but is unlikely to boost Platinum’s declining funds under management.
More than half of the top 20 most popular shares bought by advised investors during the first half of 2025 were ETFs, according to AUSIEX data.
At least two-thirds of ETF flows are understood to be driven by intermediaries, according to Global X, as net flows into Australian ETFs spike 97 per cent in the first half of 2025.
Inflows for the first half of 2025 for GQG Partners stand at US$8 billion, but the firm has flagged fund underperformance could be a headwind for future flows.