Investors Mutual Limited (IML) has partnered with Vaughan Nelson to launch a new small and mid-cap global equity strategy in the Australian market.
Vaughan Nelson’s SMID Cap strategy is high conviction and invests in about 70 stocks out of a total of approximately 7,700 stocks available in the SMID cap range globally.
The strategy will be made available to local investors as an active ETF listed on the ASX – the Vaughan Nelson Global Equity SMID Fund (quoted managed fund) under the ticker code VNGS – as well as via an unlisted actively managed fund.
“This is the only active global SMID cap ETF on the ASX, and one of only a handful of global SMID cap managed funds available in Australia,” commented IML CEO Damon Hambly.
“This is despite global SMIDs achieving excellent returns relative to other indexes, as well as being a great way for Australian investors to diversify their portfolios in terms of geographies, industry sectors and economic cycles.”
Both IML and Vaughan Nelson are affiliates of Natixis Investment Managers. Mr Hambly said that the firm’s partnership with Natixis gave it access to some of the best global investment strategies from around the world.
“Through our partnership with Natixis, we have access to some of the best global investment strategies around the world. We chose to bring Vaughan Nelson’s Global SMID Cap strategy to Australian retail investors for two main reasons: the first is that they have a first-rate investment team that has a long history of strong performance in global equities,” Mr Hambly explained.
“The ASX is only 2 per cent of the world’s market cap and is around 50 per cent materials and financials, so investors that are only investing locally are missing out on a lot of opportunity,” he added.
Vaughan Nelson has approximately US$15 billion under management and 25 years of experience managing small and mid-cap funds, including over five years managing funds for institutional investors in Australia.
“Vaughan Nelson is uniquely designed to add value in a global strategy because the process goes beyond simply providing market exposure,” the firm’s CEO and CIO Chris Wallis explained.
“The team trades time for value by seeking investments that it believes will deliver a high targeted return in a three-year window. The process has three different avenues by which to earn returns, allowing it to generate alpha in a myriad of market environments.”
Mr Wallis also echoed the opportunities that global SMIDs present to Australian investors.
“After more than a decade of over-reliance on monetary policy that benefitted long duration assets and misallocated capital, global authorities are shifting to fiscal policy to promote healthier economic growth, close the wealth divide, and speed the transition to renewable energy,” he noted.
“Passive indices will struggle relative to the returns they have generated over the last decade, while high active share globally focused small/mid cap strategies can take advantage of the shifting economic growth dynamics.”
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.
