American Century Investments (ACI) and Nomura Asset Management have announced the launch of the Nomura Funds Ireland – American Century Global Small Cap Equity Fund, which aims to deliver long-term capital growth by investing primarily in small-cap companies in both developed and emerging economies.
The new Ucits fund is a response to growing client demand for small cap exposure as part of more broadly diversified portfolios, the groups said.
The American Century Global Small Cap Equity Fund will be added as a sub-fund to the Nomura Funds Ireland platform, which currently has €6.7bn in assets under management.
The fund will be managed by American Century Investments’ senior portfolio manager Trevor Gurwich and portfolio manager Federico Laffan.
The fund employs a bottom-up growth philosophy focused on identifying investments in small cap companies around the world exhibiting sustainable and accelerating earnings growth.
The team believes that the direction of earnings growth is a more powerful predictor of stock price performance than the absolute level of growth.
The American Century Global Small Cap Equity Fund is managed under the UN Global Compact guidelines and will not invest in companies that are on the exclusion list recommended by the Council on Ethics of the Norwegian Government Pensions Fund Global.
Gurwich said: “The small cap markets provide a dynamic and large universe. In general, global small caps are expected to grow earnings faster than their large cap peers, and global small cap valuations remain attractive.
“Our portfolio will be positioned in companies that we believe have strong fundamentals and will continue to deliver better earnings revisions than the overall market. We also believe combining global small caps with either global large caps or regional mandates may improve diversification and enhance long-term returns.”
