American Century Investments has announced the launch of the American Century Global Small Cap Fund in Australia via a unit trust structure.
The global investment manager, which manages nearly $3 billion on behalf of institutional and intermediary investors in Australia, said the fund uses a fundamental, bottom-up investment process that aims to provide superior risk-adjusted returns over the long-term.
It will provide local wholesale investors with additional investment opportunities they may not otherwise be able to access according to senior portfolio manager Trevor Gurwich.
“We utilise a distinct approach to growth investing which we believe takes advantage of persistent market inefficiencies and opens up a broader set of opportunities than a traditional growth approach,” he said.
“It is an opportune time to be launching the fund in the Australian market, particularly given the positive outlook for small cap earnings growth and attractive small cap valuations relative to large caps.”
The actively managed portfolio is predominantly composed of listed global small cap equities and uses the MSCI ACWI Small Cap Net ($AUD) Index as its benchmark with a minimum suggested investment time frame of at least five years.
American Century, which recently hired a new head of ESG, said that material ESG issues and corporate governance practices are taken into account by the fund.
It seeks to avoid companies that fail to meet fundamental responsibilities in areas such as human rights, labour, environment and anti-corruption and those with exposure to controversial weapons, cluster munitions and tobacco.
Mr Gurwich said the small cap sector continued to provide attractive stock selection opportunities as the stay-at-home theme became less prevalent.
“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,” he said.
“We also see continued demand for robust IT spending, with companies realising that IT investment is critical to their success in a hybrid world.”
Jon Bragg
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
